The influence of diversification of construction enterprises on the efficiency of their commercial and economic activities

Abstract

Diversification or enlarging of the field of company’s operation is one of the ways to increase its competitiveness. Moreover, it helps to reduce the risk of commercial and economic activities because a more varied production programme allows the company to balance the demand and supply by offering the market new products in proper time. The influence of commercial activities diversification on enterprise performance follows a certain law stating that when the field of company’s operation is narrow, the performance is rather poor. Diversification improves the results but only to a certain extent. Then, they are getting worse again.