Transition Period China Diversified Motivation And Strategic Choice

Engaging in diversification or insisting on single business operation, which is an important strategic decisions which the enterprises must be faced with in the process of their development .Since it was put forward in the 50 years by Ansoff, the concept of diversification has been accepted and put into practice by the enterprises, moreover, it has raised an upsurge in the global area .In China , with the transition from plan system to market institution , the enterprises must consider how to grow and develop in the market where the competition is increasingly keen. The strategic benefits coming from diversification and the pressure from the exterior environment make the diversification has been an important strategy selection which many enterprises developed into a certain phase. But many experienced analyses about the diversification of Chinese enterprises indicated that many of them began to engage in long-span unrelated diversification in early period and developed into completely diversified enterprise groups at a very fast speed. It seemed not proper that we explain the reasons of Chinese enterprises diversification only with the theory of seeking benefits.In fact, the problem of the strategic selection between specialization and diversification is always one of the focal problems disputed by Chinese economists and entrepreneurs. As a fact that cannot be avoided, we need to anatomy and probe into the diversification. Actually the decision of engaging in diversification is drove by many factors. Can we describe and appraise the behavior of diversification only when we put the enterprises into a special historical background and social regime. This article expects to review and explore some special reasons why the current Chinese enterprises engage in diversification from the aspects of the special development progress, enterprise system and social culture which Chinese enterprises .must be faced with during the transition period. In addition, the article puts forward the synthesis thoughts about the strategic decisions of Chinese enterprises diversification via comparing the economic benefits and managerial costsbetween the different diversification strategies.This article consists five parts:Chapter one is introduction. This part mostly explains the motive of choosing topic and puts forward the problems which this article should solve.Chapter two introduces the concept and the sorts of diversification . this paper puts forward the concept of the diversification on the basis of synthesizing many related definitions and analyzes the different meanings of diversification at vary levels. In addition, this article points out that diversification and specialization are not two opposite poles, the relations between them are multiple.Chapter three compares the international development of the diversification strategy. Via comparing the developed countries, eg, America, Japan, the European countries and some developing countries in Asian, we can find that diversification acts different functions in the course of enterprise development. In the vary market backgrounds, the effect and the degree of the enterprise diversification have great differences.Chapter four analyzes the special seedtime, enterprise system and social culture which Chinese enterprises must be faced with during the transition periods. It also tries to find out some special reasons why Chinese enterprises would engage in diversification.Chapter five mostly puts forward some thoughts about the strategic decisions of Chinese enterprises diversification and expects to offer some help when the enterprises decide to engage in diversification.