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

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.