For the past decays the corporate geographical diversification and its effect on firm’s performance have been studied widely in the business management studies. (Hoskission and Hitt, 1990)Many companies or firm go for diversification to enhance the products and services. While diversification, the previous research showed that it needs a strategic planning according to the location, the culture and the country. Although diversification results in firm’s reputation, growth and brand development but for this it needs tohave managed diversification.
Hitt et al. in 1997 explained that any firm can for simultaneous process with the help of integrating the product and international geographical diversification. Location strategies are also very important because it reflects the local culture in your business environment which leads to the higher profit, employee integrity etc. Location strategies includes product and services based requirements as per the local requirement, language or office communication as per the local environment, involvement in local cultural or social programs etc. For achieving the profit stability it is necessary by the firms to have the combination of related products & services and also the geographical diversification strategy Kim et al. (1989).
Therefore, all the synergy between the geographical diversification and the products or services of the firm all is dependent on the firm’s knowledge in managing the corporate diversification.
The importance of this topic lies in the significantly modern business research analysis in the currentmarket and its influence between the geographical diversification and firm’s performance. Home country environment or location environment is a very important factor which links the relationship of firm with the corporate geographical diversification and the firm’s performance.The location environment can be considered as the big factor as an external moderator which represents or opens the number of business opportunities and the business constraints for the firm.
Over the last few decades, it has been come in to picture that the progress for the geographical diversification is substantial and the firms are removing the cross border restrictions. The companies are now making the foreign direct investments in different overseas countries and making inputs to the world economy. European economic integration process or USA/UK economic process has simulated the foreign direct investment by controlling the overseas business environment by opening the global firms.
Hitt et al。1997解释说，任何公司可以与集成的产品和国际地域多元化的帮助同步过程。定位的策略也很重要，因为它体现在你的商业环境，从而导致更高的利润的地方文化，员工的诚信等位置的策略，包括产品和服务的要求，按当地要求，语言或办公通信按当地的环境，实现利润的稳定性是必要的公司有相关产品和服务的组合，也是地域多元化战略的基姆等人在当地文化或社会计划等的参与。1989。