Abstract:

The strategy is the main direction of the company. In the development of the economy, an important role is played by corporate diversification strategies. The study of the essence of the concept of diversification of production shows that its methods are rigidly dependent on the scope of business and enterprise management. Diversification requires a degree of flexibility in the approaches to its implementation; therefore, at the beginning of planning activities, none of them should be excluded. This research focuses on the impact of corporate diversification on company performance and risk. To complete this purpose, the research question will be answered: how does corporate diversification affect enterprise indicators? Research is based on the open annual financial statements of PJSC Gazprom. To assess the differences, find the relationship between variables and respond to the hypotheses of the study, various statistical analyses were applied. The result evidence from Russian company showed that unrelated diversification is positively related to firm’s performance. However, related product diversification is negatively related to firm’s performance.  In addition, the relationship between geographical diversification and the efficiency of the company is positive, moreover, the hypothesis of product diversification and reducing the risk of the company is confirmed. However, the hypothesis that geographical diversification contributes to reducing the risk of the firm has not been corroborated.