STRATEGIC DIVERSIFICATION AND ORGANISATIONAL PERFORMANCE OF CONGLOMERATE ORGANISATIONS IN RIVERS STATE

Abstract

This study examined the relationship between strategic diversification and organisational performance of conglomerate organisations in Rivers State. The motivation for the study arose from persistent performance challenges among conglomerates, including declining market share, reduced profitability, and operational inefficiencies, despite the adoption of diversification strategies. A cross-sectional survey research design was adopted, with a population of twelve conglomerate organisations and one hundred and forty-four top-level management staff selected through a census approach. Data were collected using a structured questionnaire and analysed using the Statistical Package for Social Sciences, while Pearson product moment correlation coefficient was employed to test the hypotheses at a 0.05 level of significance. The findings revealed that concentric diversification has a strong positive and significant relationship with market share (r = 0.681, p = 0.000), conglomerate diversification is positively and significantly related to profitability (r = 0.703, p = 0.000), and horizontal diversification shows a significant positive relationship with organisational efficiency (r = 0.692, p = 0.000). These results indicate that strategic diversification plays a critical role in enhancing overall organisational performance when properly implemented. The study concluded that different dimensions of diversification contribute uniquely to performance outcomes and that effective coordination of diversified business units is essential for achieving optimal results. Based on the findings, it was recommended that conglomerate organisations should adopt related diversification strategies to strengthen market position, pursue carefully managed conglomerate diversification to enhance profitability, and implement horizontal diversification to improve operational efficiency and resource utilisation.