Performance Impact of Business Group Affiliation

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Introduction, purpose, and significance of the study

Singh, Nejadmalayeri & Mathur (2006) conducted a study titled Performance impact of business group affiliation: An analysis of the diversification-performance link in a developing economy. The main purpose of the research is to explore the performance of large and diversified Indian firms as revealed by asset and equity returns (Singh, Nejadmalayeri & Mathur, 2006). The research article commences with a clear background that provides an insight into the subject of study.

The researchers achieved to give well-researched literature that serves as the basis for understanding and linking past studies with their research topic. In their study, Singh, Nejadmalayeri & Mathur (2006) conducted extensive research on the topic stretching from the early 1970s to the period under review. However, it is notable that although the literature sources were adequate, the majority of reviews is between the 1970s and late 1990s.

These studies may not provide a concrete basis for analysis of the phenomenon within the study period given the dynamics of a rapidly changing business world. The research by Singh, Nejadmalayeri & Mathur (2006) should have utilized newer studies to give coverage of the present environment. According to Bajpai (2009), research must be able to provide additional insight into the study area and fill the previously observed study gaps. It is evident that the study immensely contributes to the literature in the field, and offers the basis for future researches.

Hypotheses of the study

The study aims at developing and test three hypotheses. The researchers formulated the hypotheses based on the background literature explored by the study. The study has carefully designed its hypotheses to explain the fundamental variables used to underpin the study analysis. The researchers have surrounded each of the hypotheses with a well-thought theory consistent with the study literature. Through this, the readers and future researchers reviewing it would relate the theory and assumptions of the study.

From the article, the hypotheses, especially the third hypothesis, are formulated as extensive. The study could benefit more from the restatement of hypotheses by making them precise and simple. It is worth noting that the study has extensively researched each of the hypotheses and analyzed them using relevant study methods and variables.

Method of Study

Study design, sample, and study setting

Although the study has utilized a study design, it does not articulate the study design employed to examine the topic. The study sample used by Singh, Nejadmalayeri & Mathur (2006) of 889 firms is adequate to inform the study about the general overview of the industry and especially the target firms (Bajpai (2009). The study by Singh, Nejadmalayeri & Mathur (2006) explores large corporations in India.

The sample consists of 889 firms of which 675 are diversified firms obtained from the WorldScoep database. Since the study aims at examining the most diversified firms, the selected sample is sufficient to offer viable conclusions. However, the article does not mention the sampling methods used to select the sample under investigation. Thus, the study lacks the basis for validity since no evidence is present to depict the sampling technique to escape criticism of the invalidity of data used.

The study findings cannot generalize that largely diversified firms perform poorly since the sample of the study consists of Indian firms. This is because other countries have different business dynamics. Nevertheless, the researchers noted that the results could only apply to Indian firms that have diversified.

Data type and data collection methods

The study by Singh, Nejadmalayeri & Mathur (2006) mainly employs quantitative data analysis techniques in the analysis of the collected data. The researchers used data from databases only. The study should have utilized other primary data collection methods such as interviews and questionnaires to understand the phenomenon in its natural setting ( Sekaran & Bougie, 2009).

Measures

The study used descriptive statistics and comparison tests. The study has employed a set of measurable variables to classify firms as large, diversified, and focused ones. To achieve their objective, Singh, Nejadmalayeri & Mathur (2006) employed non-parametric tests on net sales, assets, and income, it benefited the study in explaining the difference between diversified firms and focused ones in terms of their size. The choice of independent and dependent variables of the study is consistent with the demands of a relational study seeking to examine correlation and causation.

Data Analysis and Results

Data analysis techniques applied are in line with the nature of the data used in the study. The researchers have used tables in the presentation of their analysis. Additionally, they have used narrations being provided in the analysis to give clarity and understanding of the results (Zikmund, 2003).

Discussion of Findings

The researchers have discussed the results about variable factors responsible for the poor performance of the diversified firms in India as revealed by financial reports. The discussion employs a theoretical framework that logically develops from the background of the study. The study literature is, however, limited in the sense that it revolves around positive studies without allowing varied study views that contrast the study. This scenario denies the study of other literature that may be useful in informing the current and future researches. Therefore, the researchers could enhance the study by reviewing contrasting literature to provide for an investigative study.

Conclusion and recommendation for future studies

The article offers a well concluded based on the study findings obtained from the analysis. The study findings are consistent with the evidence from the recent studies of reduced profitability. However, the study does not offer recommendations or implications that the findings may have on diversified firms in respect to their future performance. From this discovery, it seems that the findings are conclusive, which cannot be the case. The findings should provide a means to achieving succinct study because of gaining understanding from the previous literature. Additionally, the article does not state its significance to the field under which the study falls. Limitations are inevitable of any particular study. The study is conservative in noting some of the inherent weaknesses or limitations that may influence the results of the study.

The conclusion of the study is short and clear, hence giving a reader a grasp of the studys topic, findings, and analysis. The research has captured the thesis statement by restating the aim of the study and the study area. The general arrangement of the article flows logically from the introduction section up to the conclusion. This logical and smooth transition of sections and discussions offers the basis for a better understanding of the materials by an average reader and fact-finding person.

References

  1. Bajpai, N. (2009). Business Statistics. New Delhi: Pearson Education India.
  2. Reed, A. (2002). Corporate governance reforms in India. Journal of Business Ethics, 37:24968.
  3. Sekaran, U., & Bougie, R. (2009). Research Methods for Business: A Skill Building Approach. New York, NY: John Wiley and Sons.
  4. Singh, M., Nejadmalayeri, A., & Mathur, I. (2006). Performance impact of business group affiliation: An analysis of the diversification-performance link in a developing economy. Journal of Business Research.60: 339347.
  5. Zikmund, W. (2003). Business research methods (7th ed.). Thousand Oaks, CA: Thomson/South-Western.

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