Establisher or manager? when a firm is diversification
Diversification means entry into new industrial areas. Based on the theories of the two strategic mainstream schools: the Industrial Organization and the Resource-based view, this paper introduces two kinds of diversification strategies, saying the opportunity-oriented strategy and the resource-oriented strategy, which are usually adopted by a firm's establisher and manager respectively. From the first perspective, an entry of new industrial area follows the process of "opportunity-strategy-resource" which is usually taken by the risk-favored establishers. From the second perspective, an entry follows the opposite process of "resource-opportunity-strategy" which is usually taken by the risk-averse managers. By combining with the establishing phase and developing phase of the whole life of firms, a matrix of "phase/strategy" is introduced. The matrix shows that different strategies are needed in different phases when a firm is diversifying. And it also indicates that whether or not a firm's decision maker is still the establisher, who cannot change his opportunity-oriented strategic intent to the resource-oriented strategic thought, determines the success opportunity of diversification. In the final part, through a case study from China, the view of this paper is verified.