International diversification is considered the basic pillar that plays a significant role in multinational corporation growth strategies. Due to this reason, it has vitally important in academia to analyze the antecedents and international diversification performance implications on the multinational corporation strategies.
Previously, international diversification strategies performance has a wide collection of research but in this article rational view is adopted to compare the diversification profile of firms in the context of inter-organization. This research provides arguments about the relative characteristics of firms and their partners. It also determines that the diversification profile is an indicator of parties and resources that explains when and if inter-organizational ties will give the optimum performance outcome.
For this purpose, relative characteristics and proposed conceptual refinement is examined by differentiating between the degree and the content dimension of international diversification. For this, data of 202 manufacturing firms were analyzed and concluded that a firm will have the optimum perforce when there its stakeholders or partners lie between moderately higher degrees of international diversification and moderately have confection with the foreign market.
One of the major limitations of this research is that the transfer of resources and capabilities between firms is not measured directly. These inter-relations can provide an opportunity for firms to exchange resources with each other. It might be possible that these opportunities are not recognized by several firm-level, individual-level, and tie-level factors that are not included in the study.