Article Abstract:
An attempt is made to define secondary production and to analyze its impact on an extended vertical market structure model. The variables of this model are industry profit, industry primary product output as a percentage of all industries' overall product output, and industry primary product output as a percentage of all products' overall industry output. The findings suggest that industry profit is considerably influenced by secondary production in both instances when the extended vertical market structure-profit model is fitted to all industries and to individual industry categories. It is also suggested that the influence between industry profit and secondary production is reciprocal, although its functional form is nonlinear. Furthermore, evidence indicates that the effect of secondary production on industry profit may also vary across industries in terms of strength and functional form.
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Article Abstract:
A test is described of the Galbraith and Nathanson 1978 model of development stages. Nathanson and Galbraith posited that performance criteria are more objective in highly diverse firms, that bonus is a bigger part of total compensation in such companies, and that bonus allocation decisions are tied more to an objective performance formula than to the discretion of CEOs or firm presidents. A comparison of the three variables across high, medium, and low diversification groups is conducted, based on written surveys of Fortune 500 corporate managers in 1,000 manufacturing companies. Some weak support is found for the Galbraith and Nathanson model.
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Article Abstract:
Performance differences are examined among established companies diversifying into young industries. Also considered are 11 'corporate level' hypotheses about organizational and strategic variables. Results suggest that performance is tied to company size, time of entry, financial strength, and the maturity of the company's markets. The significance of several of the variables appears to be altered as an industry develops.
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