A Study On The Motivation, Influencing Factors And Performance Of Diversification Of China SMEs

Corporate diversification is one of the important topics in strategy research. Onthe one hand, the diversification strategy has been thought to be able to bring thecompetitive advantage for the company, growth and help the company to survive inthe fierce competition in the market, on the other hand, because some companiesadopt diversification strategy to make enterprise capital chain rupture, ruin andcontroversial. But since twentieth Century the late70’s, Western companies have notrelated to the divestment business, the company has "Refocusing" trend, under thistrend, our country small and medium-sized enterprise this one does not havediversified strategic resource and ability groups, but act in a diametrically oppositeway, started large-scale implementation of diversification strategy. This paperdiscusses the motivation, diversification strategy, selection of China’s small andmedium enterprises influence factors and its impact on performance, and empiricallyby means of the SME Board of listing Corporation in china.Firstly, based on the definition of "Research on diversification motivation"concept and combing the previous, summed up the small and medium-sized enterprisediversification motivation factors, and unifies our country small and medium-sizedenterprise diversification motivation should be considered, proposed our countrysmall and medium-sized enterprise diversification motives. Secondly, analyzes therelationship between the mechanism of the effect of diversification of our countrysmall and medium-sized enterprise factor and our country small and medium-sizedenterprise diversification and performance, put forward the hypothesis, and in2010December31before the189enterprises listed on the Shenzhen SME board as thestudy sample, selection of appropriate quantitative index by using descriptivestatistics, regression analysis, and other statistical methods, test the proposedhypothesis. Then, select a specific case of Companies in China’s SME board in listingFCorporation is analyzed, further to verify theory is obtained. Finally, according tothe above research conclusion, puts forward suggestions to our country small andmedium-sized enterprise diversification strategy choice.Through the above research work, this paper obtained the following conclusions:First，our country small and medium-sized enterprise diversification motives. Inthis paper, the definition of "diversified motivation": the managers of the enterprisefor a certain purpose, choose the subjective desire of diversification strategy. And thatour country small and medium-sized enterprise diversification motives are dividedinto two categories, to maximize shareholder value as the diversification motive and purpose, namely the pursuit of profit, realize the scale of expansion resources synergyand disperse the risk, and the managers self-interest as the diversification motive andpurpose, namely enterprise owners--managers expropriate minority shareholders.Second, factors affecting our country small and medium-sized enterprisediversification. The influence degree of diversification of small and mediumenterprises in China by the system of environmental factors, the internal governancestructure factors and management factors of personal characteristics.Third, China’s small and medium enterprises to adopt diversification strategy canimprove the profitability of enterprises in the short term, but from the long-termdevelopment to see, is not conducive to the development of enterprises.