An Empirical Study On The Features Of Board’s Features, Diversification Strategy And Corporate Performance Within Chinese Listed Companies

Acted as the connection of shareholder and administration authorities, and the representative of legal entity ownership, the board of directors plays the critical role in the corporate governance as it undertakes the responsibilities of strategic decision, management incentive and supervision. Diversification strategy has been extensively adopted during a company’s fast-growing period; therefore, it becomes a hot spot focus for the research of strategic management. Based on the close tie between the board of directors and Diversification strategy as well as its crucial influence on the enterprise performance, the research on the board features and diversification has for a long time been the hot subjective in the strategic management field. But so far, there still needs further exploration before the consensus could be reached upon the relationship of board features, diversification, and enterprise performance.The paper firstly interprets the relationships between board features, diversification, and enterprise performance from the perspective of theory; and secondly, makes an empirical study of listed companies from manufacturing industry on Shenzhen and Shanghai Stock market. The paper puts emphasis on how the board features influence the diversification strategy and enterprise performance.Based on the empirical approach and china’s specific legal environment and culture, the paper constructs the hypothesis and quantitative model. With the companies listed in2007to2009taken as the research sample, the paper uses multivariate statistical methods together with SPSS tool to make data analysis and hypothesis testing on subject of relationship of board features, diversification, and enterprise performance. Furthermore, the empirical study results are explicated interpreted with a combination of the local legal environment and culture.In china’s specific social environment, the paper draws the conclusions as followings:(1) the extent of diversification has high negative correlation with enterprise performance;(2) large-scale board of directors could result in low efficiency and reduced administration standard;(3) the independent directors system does not exert it’s advantage to inhibit the excessive diversification, indicating the system far more to be desired;(4) the consolidation of position of President and General manager has no significant influences on diversification and enterprise performance;(5) the high frequency of board meetings and sufficient communication help result in high-quality, good-feasibility strategy, therefore enhancing the enterprise performance.The paper consists of five chapters:the first chapter introduces the research background, purpose, approach, and process. The second one reviews relative documents and materials from home and abroad to lay a foundation for the construction of model. The third one presents the model, variables, index systems and research hypothesis. The fourth chapter aims to screen out the sample data, identify the variables calculation, uses a number of statistical methods testifying the hypothesis, and concludes the study results. The last chapter interprets the empirical results and proposes some sound suggestions combined with china’s practical situation.The paper discusses the relationship between the board features, diversification and enterprise performance in china’s specific institutional environment and traditional culture. The illumination from the study demonstrates the importance of synergistic effect between the board and diversification, and the regulative role that the board plays to coordinate the correlation between the diversification and enterprise performance; thereby, making a full preparation to enhance the corporate all-round performance and to boost the sustainable development.