Segments Of An Enterprise Operation And Management Performance Of Empirical Research

As a new concept to be put forward, vertical scale enterprise not only break through the traditional theory to define the concept of enterprise scale, but also led to rethinking the relationship between enterprise scale and economies of scale. In accordance with the opinion of some scholars, the enterprise's vertical scale get low economic efficiency, that means, there is the negative relationship between the enterprise's vertical scale and the operating performance, which reflect the economic efficiency. In this paper, I select the sample of pharmaceutical companies of United States to carry out empirical analysis in order to try to verify the Proposition that the enterprise's vertical scale negatively relate to the operating performance. In this study, the number of business divisions and the Herfindahl coefficient as two standards to measure the vertical scale, and the total assets profit margins as the evaluation of business performance, then I set up the correlation analysis model, and make two tested proposition: the number of business divisions have negative correlation to the total assets profit margins; Herfindahl coefficient have Positive total correlation to assets profit margins. Through empirical analysis, the paper reached the following main conclusions: as the measure form of the enterprise's vertical scale in this study, the number of business branches and the total assets profit margins have the negative correlation, but the relationship between the Herfindahl coefficient of enterprises and the total assets profit margins is positive. That means the negative correlation between the enterprise's vertical scale and the operating performance is existence.The research of the Vertical scale and the operating performances, will enable to rethink the enterprise's scale, which will make great significance to help enterprises to select operating and management strategies.