earticle

영어

In spite of its relatively short history of business experience, the “Small & Medium-sized Venture Companies” (hereunder referred to as SMVC) takes a significant role for economic growth in Republic of Korea. A large number of SMVC pursue their growth and development to the higher standard, becoming middle standing enterprise, by listing to Korean stock exchange market (KOSPI & KOSDAQ). It is also regarded that supports in governmental policy has become another important driving factor for SMVC to achieve growth after Korean foreign currency crisis rescued by International Monetary Fund in 1998. The trend of Information Technology (hereunder referred to as “IT”) industry, which constitutes a major portion in SMVC, shows ever-changing technology and business environment, leading to endless development by adapting new technology and convergence as well as rapid release of new product. Not every successful product in the past cannot guarantee the “Cash Cow” for the company in the future. It is required for each company to keep on changing for growth and development in order to survive, to maintain success, even more to continue expansion in the fast-moving industry environment. Therefore, this study analyze the difference in management performance between the passive group and active group to business diversification by examining six types of business diversification which is currently considered one of the growth model in business administration. As a result of above-mentioned study, it is reviewed that the management performance of active group is assessed better than that of passive group in especially for below three kinds of diversification – that is diversification by new technology, diversification by new trend, and finally diversification by irrelevant business field expecting volume of profit – showing significant distinction in statistical research. In the end, SMVC should scrutinize every detail of aforementioned types of diversification but also be well-prepared to successfully cope with rapid changes in business environment. While the strategy of "Selection and Concentration" still provides important implication to SMVC in the recent fast moving digitized economic environment, this study can indicate another way of successful and sustainable management performance to SMVC by seeking diversified new business opportunities in order to build an excellent business portfolio. Meanwhile, through the diversified business portfolio toward the long term strategic business diversification, SMVC not only should achieve sustainable management but also fortify the foundation to become global middle standing enterprise. In addition, when pursuing business diversification, it is desirable for SMVC to administer the liquidity of cash-flow carefully for the purpose of sustaining financial stability. In consideration of the current situation of SMVC, constantly facing the restriction of human and material resources available, it might be beyond the capability of SMVC to proceed each of diversified business simultaneously in real business world. However, while operating current business of sound cash flow, SMVC should strenuously pursue diversified new businesses by means of change and innovation in order to make strong grounds for growth potentiality within their capability. This paper is written for those SMVC who try to conduct business diversification when establishing business strategy.