Research On The Performance Of Refocusing Strategy Transformation Of Diversified Enterprise

The enterprise strategic choice concerns the future development and living status of enterprise.Many enterprises begin to develop diversification, and a large number of diversified business groups show up with the reform and opening-up policy as well as rapid growth of China’s economy in the era of shortage economy. Among which many companies expand their strength and scale through diversified development, and come to the world stage. However, excessive pursuit of economies of scale results in many problems, such as dispersion of resources, less prominent major works and weak competitiveness, which influence the sustainable development of enterprises, some even face the fact of bankruptcy recombination. Diversification failure draws academe and business community attention to refocusing business strategy. With the global financial crisis not calming down and under the background of enterprise competition internationalization, it is necessary to guide enterprise making strategic choice scientifically, and to reduce the blind diversification and enhance corporate performance, inquiry the relations between refocusing strategy and firm performance.This paper starts from generalization and summarization of theory and literature, first, define the basic conception of study, then combine the physical truth of domestic enterprise to review and summarize the literature of existing diversified and refocusing strategy, analyze the mechanism of action of resource-based view, core competitive theory, value chain theory and enterprise strategy theory; second, pay close attention to the effect of regulation of stock ownership incentive,compensation dispersion, authority structure and equity restriction on the relations between refocusing strategy and firm performance; last, select 118 a-share companies in Shanghai and Shenzhen which implement refocusing from 2007 to 2014, total 944 sample data, use the panel data model to verify the research hypothesis.Empirical results show that:(1) diversification strategy has negative correlations with firm performance.(2) refocusing strategy has positive correlations with firm performance;(3) In terms of regulating effect, compensation dispersion, authority structure and equity restriction have regulating effect on firm performance, while stock ownership incentive has less effect.According to the study result, when facing the strategic choice, enterprise should identify external environment dynamically, position the direction of the future development of enterprise accurately, pay much attention to enterprises core business, carefully treat the diversification strategies, keep proper compensation gap between core senior executive and top management team,empower the managers during strategic transformation process. Government should use system control measures reasonably to avoid the damage brought by “ sole majority shareholder”.