Quantitative evaluation of unrelated diversification of enterprise activities

Abstract Diversification of activities is one of the main strategies of an enterprise. This is a complicated and controversial process. Some consider it to be a perspective approach, while others think that it is too risky and, therefore, unreliable. To solve this problem, diversification of enterprise activities should be measured. A survey of the methods of diversification measurement shows that they are not accurate and do not reflect the real situation. With the increase of diversification of enterprise activities, two parameters, the number of divisions and the relationship between their activities, vary. The indicator of diversification should assess and integrate both parameters. In this process, the effect of each of the above parameters on the organisational structure, determining the outcome of diversification, should be examined. In this environment, the variation in the number of enterprise activities (or their directions) is more important because the establishment of new divisions depends on...