{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,10,12]],"date-time":"2025-10-12T02:50:34Z","timestamp":1760237434779,"version":"build-2065373602"},"reference-count":68,"publisher":"MDPI AG","issue":"2","license":[{"start":{"date-parts":[[2020,5,22]],"date-time":"2020-05-22T00:00:00Z","timestamp":1590105600000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Risks"],"abstract":"<jats:p>A longstanding objective of managers is to reduce risk to their businesses. The conventional strategy for risk reduction is diversification; however, evidence for the effectiveness of diversification remains inconclusive. According to Organizational Portfolio Analysis, firms are viewed as portfolios of business units, and the key to risk reduction is both diversification and synchronization compensation. This study introduces \u201cdesynchronicity\u201d, a process that operationalizes synchronization compensation by assessing the degree of correlation between income streams of business units. Two samples of 737 and 332 firms (from COMPUSTAT) were used to empirically test the relationships between diversification and risk, and desynchronicity and risk. The results show that diversification alone will not always lead to a lower corporate risk. To reduce risk, firms also need to consider the desynchronicity of their business portfolios. Other practical implications include improved decisions on portfolio composition.<\/jats:p>","DOI":"10.3390\/risks8020051","type":"journal-article","created":{"date-parts":[[2020,5,22]],"date-time":"2020-05-22T10:18:18Z","timestamp":1590142698000},"page":"51","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":19,"title":["Diversification and Desynchronicity: An Organizational Portfolio Perspective on Corporate Risk Reduction"],"prefix":"10.3390","volume":"8","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-4267-9600","authenticated-orcid":false,"given":"Xue-Feng","family":"Shao","sequence":"first","affiliation":[{"name":"Discipline of International Business, The University of Sydney, Sydney, NSW 2006, Australia"}]},{"given":"Kostas","family":"Gouliamos","sequence":"additional","affiliation":[{"name":"Department of Management and Marketing, School of Business Administration, European University Cyprus, 1516 Nicosia, Cyprus"}]},{"given":"Ben Nan-Feng","family":"Luo","sequence":"additional","affiliation":[{"name":"School of Labor and Human Resources, Renmin University of China, Beijing 100872, China"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-1498-0188","authenticated-orcid":false,"given":"Shigeyuki","family":"Hamori","sequence":"additional","affiliation":[{"name":"Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-Ku, Kobe 657-8501, Japan"}]},{"given":"Stephen","family":"Satchell","sequence":"additional","affiliation":[{"name":"Discipline of Finance, The University of Sydney, Sydney, NSW 2006, Australia"},{"name":"Trinity College, University of Cambridge, Cambridge CB2 1TQ, UK"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-3004-6961","authenticated-orcid":false,"given":"Xiao-Guang","family":"Yue","sequence":"additional","affiliation":[{"name":"Department of Management and Marketing, School of Business Administration, European University Cyprus, 1516 Nicosia, Cyprus"},{"name":"Center for Research and Innovation in Business Sciences and Information Systems, Polytechnic Institute of Porto, 4610-156 Felgueiras, Portugal"},{"name":"Rattanakosin International College of Creative Entrepreneurship, Rajamangala University of Technology Rattanakosin, Nakhon Pathom 73170, Thailand"}]},{"given":"Jane","family":"Qiu","sequence":"additional","affiliation":[{"name":"Australian Graduate School of Management, University of New South Wales, Sydney, NSW 2031, Australia"}]}],"member":"1968","published-online":{"date-parts":[[2020,5,22]]},"reference":[{"key":"ref_1","doi-asserted-by":"crossref","first-page":"605","DOI":"10.2307\/3003575","article-title":"Risk reduction as a managerial motive for conglomerate mergers","volume":"12","author":"Amihud","year":"1981","journal-title":"The Bell Journal of Economics"},{"key":"ref_2","doi-asserted-by":"crossref","first-page":"407","DOI":"10.1002\/smj.596","article-title":"Strategic responsiveness and Bowman\u2019s risk-return 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