<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Corporate activity diversification is a promising but at the same time risky condition of a company’s adaptation to the business environment. Effectiveness of diversification processes in enterprises may be achieved by research in the following areas: development of methods of internal and external business environment analysis as a basis for diversification decisions; understanding the dependence of the scope and nature of corporate activity diversification on the market situation; providing science-based advice for the management of diversified companies, especially large ones; improvement in the methods of diversification measuring so that a complex analysis of the diversification process would become implementable. Based on the study of the Lithuanian construction sector, this paper seeks to provide new insights into the following aspects of corporate activity diversification: preconditions and conditions for deciding on corporate activity diversification; the problem of the scale and nature of diversification; organisational management conditions for the success of diversification projects. Furthermore, an in-depth discussion of the problematic of measuring the achieved level of diversification is offered.</p></abstract>

Corporate activity diversification is a promising but at the same time risky condition of a company’s adaptation to the business environment. Effectiveness of diversification processes in enterprises may be achieved by research in the following areas: development of methods of internal and external business environment analysis as a basis for diversification decisions; understanding the dependence of the scope and nature of corporate activity diversification on the market situation; providing science-based advice for the management of diversified companies, especially large ones; improvement in the methods of diversification measuring so that a complex analysis of the diversification process would become implementable. Based on the study of the Lithuanian construction sector, this paper seeks to provide new insights into the following aspects of corporate activity diversification: preconditions and conditions for deciding on corporate activity diversification; the problem of the scale and nature of diversification; organisational management conditions for the success of diversification projects. Furthermore, an in-depth discussion of the problematic of measuring the achieved level of diversification is offered.

Managerial decisions on the nature and scale of corporate activity diversification in the construction sector

Engineering Management in Production and Services

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Corporate activity diversification is a promising but at the same time risky condition of a company’s adaptation to the business environment. Effectiveness of...

Values of diversification indicators	Period, years
Values of diversification indicators	2005–2007	2008–2009	2010–2019
D_B	0.23	-	0.3
D_G	0.27	0.4	0.3

Period, years	Regression equation	Value of correlation coefficientR
2005–2007	E = 0.14 + 10.450D_G + 9.888D_G²	0.22
2008–2009	E = 0.134 + 0.026D_G	0.66
2010–2019	E = 0.195 + 0.025D_G	0.42

Managerial decisions on the nature and scale of corporate activity diversification in the construction sector

Published Online: Oct 15, 2020

Page range: 7 - 17

Received: Feb 25, 2020

Accepted: Sep 10, 2020

DOI: https://doi.org/10.2478/emj-2020-0015

Keywords
corporate activity diversification, construction sector, success factors, diversification measurement

© 2020 Romualdas Ginevičius, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Fig. 1

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Fig. 3

Fig. 4

Fig. 3

Fig. 6

Average values of diversification indicators of the companies operating in the Lithuanian construction sector

Average values of the indicator of related diversification for construction companies under consideration

Dependence of commercial profitability of the companies operating in the Lithuanian construction sector on the degree of diversification

Managerial decisions on the nature and scale of corporate activity diversification in the construction sector

Published Online: Oct 15, 2020

Page range: 7 - 17

Received: Feb 25, 2020

Accepted: Sep 10, 2020

DOI: https://doi.org/10.2478/emj-2020-0015

Keywordscorporate activity diversification, construction sector, success factors, diversification measurement

© 2020 Romualdas Ginevičius, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Fig. 1

Fig. 2

Fig. 3

Fig. 4

Fig. 3

Fig. 6

Average values of diversification indicators of the companies operating in the Lithuanian construction sector

Average values of the indicator of related diversification for construction companies under consideration

Dependence of commercial profitability of the companies operating in the Lithuanian construction sector on the degree of diversification

Keywords
corporate activity diversification, construction sector, success factors, diversification measurement