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Course Work 1 Assessed Reading Corporate Diversification and Organisational Structure: A Resource-Based View The article stresses the importance of the relationship between diversification and performance in the related businesses. It is argued that "related diversification enhances performance only when it allows business to obtain preferential access to strategic assets - those that are valuable, rare, imperfectly tradable, and costly to imitate." To be more precise, strategic assets are those that offer important source of long run competitive advantage; which are imperfectly tradable, imperfectly substitutable and imperfectly imitable. Subsequently it goes on to say that eventually the advantage will "decay as a result of asset erosion and imitation by single business rivals." And in the long term it is only "competences" which will facilitate building new strategic assets that will allow corporation to sustain profits above average. "Both short and long-run advantages are conditional, however, on organisational structures that allow the firm's divisions to...

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