The Research On The Relationship Of Strategic Change Under Resource Allocation And Return And Strategic Risk

Stock price stems from the enterprise value which comes from the strategic position of its businesses, and concrete manifestation of one corporate strategy is just the configuration of resources it owned or can be derived. Also, corporate performance is reflected in the operating progress of strategy resource allocation, is the authentication of strategic positioning and implementation. Nowadays, theorists and practitioners have both realized the very importance of how strategies (resource allocation) which enterprises respond to market changes and competitions under the development of environment influence on the formation of enterprise value. This perspective, not only produces a new strategy definition, but also affects the identification of strategic change, then lead to our reconsideration of the relationship between strategic change under resource allocation and return, risk.In this research, we take resource allocation as the form of strategic change to test its effect on return and strategic risk. Based on public data, through analyzing2000-2010manufacturing industry listed companies’panel data and corporate return and risk, we find that the level of strategic change (especially change on corporate finance and debt) has key influence on return, and has an inverted U-shaped relationship with firm performance. Such results suggest that enterprises have to be very cautious when facing such kind of strategic change, it is necessary for them trying to restrain it at a reasonable level and scope for the purpose of creating and maintaining competitive advantage. We also come to the conclusion that there is a significant relationship between strategic change and strategic risk. More specifically, the change of enterprise daily activities investment may be beneficial because of directional adjustion, but the change in enterprise finance and debt and asset management conditions may directly cause strategic risk because it involves enterprise core operation lifeline adjustment. In addition, we find that there is a significant positive relationship between return and strategic risk, which is different with the past, but which happens to coincide with the authority latest literature in strategy management research field. Finally, we test the moderating effect of strategic risk between strategic change under resource allocation and return. We find that strategic risk negatively moderates the relationship between strategic changes in asset management conditions and return. To sum up, because of the diversity of strategic change content, enterprise should treat different resources configuration change differently.