-

The Study of the Dynamics of Corporates Diversification

from Resource-based ViewA Case of Ruentex Group

4,July 2002


Department of Business Administration Chaoyang
University of Technology

Thesis for the Degree of Master

-
The Study of the Dynamics of Corporates Diversification
from Resource-based ViewA Case of Ruentex Group

(Han-Sheng Lei)
(Chin-Lun Hsu)

4,July 2002
ii

iii

Abstract
Construction industry is the vital part of a nation infrastructure and can be
treated as an indicator of national economic development. Due to the industry
linkage effect during construction process, constructing industry associated with
prosperity can be the trigger power of national economic development.
Construction industry has the characteristics of internal demand because of
its immobility nature and inability of exportation. The transition period of
Taiwans economy can be traced back to agriculture society in early stage, then
the industry society follows. The governments policy coincides with Taiwans
economy development stages, it achieves large scale of enterprise after industry
strategy adjustment and prospers other related industry.
Nevertheless,
construction industry had faced a long-term deflation ever since the collapse of
Taiwans stock market in 1989. The market of real estate keeps lowering down
and this make many construction company going bankruptcy.
Under such circumstance, there still are many difference between
construction company. Especially, the change of global environment is so radical,
and evidences show that only the well-prepared company which kept up with the
global trend can survive. Its of importance to identify how the management in
construction business can do, we are not only focusing on current competitive
advantage but also taking advantage of resources allocation in order to reap
profit and keep growth.
Therefore, construction industry can take advantage of self-understanding ,
proper resource allocation and transfer in order to keep growing, In this case
study, Ruentex Group is being selected and explored the strategy being
adopted during process of diversification.
This study conclude several findings, as follows:
1.Current resources can affect business selections of corporates diversification.
2.The selections of business to entrant can result in demand of new resources.
3. The selection of business strategy can be affected by current resource of
enterprise.
4.Corporatese can accumulate new resources resulted from new business.
Keyword: Construction business, group of businesses, Diversification,
Resource-based theory, Dynamics process
iv

IQ EQ

2002/07/04

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59
.. 75

..................................................................... 80
............................................................................. 95
95
..100

................................................................................................103
............................................................................................... 103
............................................................................................... 104

vi

1-1
2-1
2-2
2-3
2-4
2-5
2-6
2-7
3-1
3-2
4-1
4-2

...1
- 10
.10
() .13
.19
.24
.25
. 32
.45
.46
.55
. 56

vii

1-1
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
2-9
3-1
4-1
5-1
5-2
5-3

..4
15
16
22
. ...28
30
31
34
35
35
44
.. ..53
.. . .95
.. ..96
.. ..96

viii

(1994)

(1995)

WTO

1.

2.

1.

2.

3.

4.

5.

1-1

(diversification)

1.
(1) Ansoff (1957,1965)

(2) Gort1962

(3) Kamien&Schweartz (1975)

(4) Jauch & Glueck (1988)

2.
(1) Berry (1975)
(2) Pitts & Hopkins (1982) (business)

(3) Allen & Hamiltom (1985)

(4) Ramanujam & Varadaraja (1989)

(5) Chandler (1962)

1.
(1) Higgin & Schall (1975)

(2) Amihud & Lev (1981)

(3) Teece (1982)

(4) Aaker (1984)

n
l

n
l
l (ROI)
l
l
l
l
l
l
l
l
(5) Chapin & Jermine (1985)
n
n
(6) Reed & Luffman (1986)

n
n
n
n
(7) Amit & Livant (1988)

(Synergisic)
l (Economic of Scale) (Economic of
scope)
l

l (Related)

l (Predatory Pricing)

n (Financial)
l

(8) Montogomory (1988)

(9) Ramanujam & Varadarajan (1989)

n

(1)

(2)

(3)

2.
(1)
n
n
n
n
n
n
n
n
n
n
(2)
n
n
n
n
n
n
n
n
n
n
n
9

n
n
n
n
n

()
1. Anoff (1957)
-
2-1 -
\

Igor H.Ansoff,"Strategies for Diversification", Havard Business Review,

Sep-Dec,1975,p114

2-2

Igor H.Ansoff ,"Corporate Strategy" N.Y.,McGraw-Hill Book

Co.,1965,p132

10

2. Wrigley (1970)
(Specialization ratio SR
)

(1) (Single Product)SR 0.95 1

(2) (Dominant product firm)SR 0.7 .0.95

(3) (Related product firm)SR 0.7

(4) (Unrelated product firm)

()
3. Rumelt (1974)

(1) (Single product firm) 95%

(2)(Dominant product firm) 70% 95%

n
11

(3) (Related product firm)70%

(4) (Unrelated product firm)70%

n
n
4. Kotler (1975)

(1) (Concentric Diversification)

(2) (Horizontal Diversification)

(3) (Conglomerate Diversification)

Kolter
5. Glueck (1976)
( )

12

 2-3 ()

()

William F. Glueck , business Policy : Strategy formation & Management

Action,2nd.Ed,McGraw Hill Book Company,1976.

13

6. Aaker (1984)

(1) (Related Diversification)

(2) (Unrelated Diversification)

n
n
n
n
n
n
n
7. Hill & Hoskisson (1987)

(1) (Vertical Integration)

(2) (Horizontal Integration)

(3) (Conglomerate Diversification)

14

8. Hax. & Majluf (1991)

2-1
Hax. " The Strategy Concept and process " ,1991, p116

15

9. Devlin (1991)

(1)
(2)
(3)

Devlin

2-2
Devlin, G., (1991), Diversification: A redundant strategic
option European Management Journal, 9, 1, pp. 76-81.

16

Barnard(1938) Selznick(1957) Chandler(1962 1977)

Ansoff(1965)Andrews(1971) Rumelt(1974)
Penrose(1959)

80
Wernerfelt(1984)
Barney(1986)
(Barney1991Grant1991)
(Peteraf1993)

(Grant1991)

(the Resource-based viewRBV)

Edith T. Penrose 1959
The Theory of the Growth of the firmRBV

17


Wernerfelt(1984)

Barney(1986)
1.
(heterogeneous)
2.

Barney(1991)

(1994)

(1995)
()

18

 2-4

(resources)
Barney(19861991)
(invisible or intangible assets)Itami & Roehl(1987)Hall(19921993)
Grant(1991)Stalk(1992)
(capability)
Ladoetal(1992)
Selznick(1957)Andrews(1971)
Snoqw & Hrebiniak(1980)Hitt &
(distinctive competence)
Ireland(1985)Stoner(1987)
(1994)
Prahalad & Hamel(1991)
Leonard-Barton(1992)
(core competence)
Schoemaker(1992)Bakker et

al.(1994)Markides
&Williamson(1994)Tampoe(1994)
(1995)
Reimann(1982)Hayes et al.(1988)
(organizational
Ulrich & Wiersema(1989)Ulrich &
competence or resources)
lake(19901991)Chandler(1992)
Lado & Wilson(1994)
Winter(1987)Amit &
(strategic assets)
Schoemaker(1993)Black &

Boay(1994)
(critical resources)
Tilles(1963)Wernerfelt(1989)
Pavitt(1991)
(firm-specific
competence)
Hofer & Schendel(1978)
(resource deployment)

19

Coyne(1986)(having)
(doing)
1.

()

2.

Wernerfelt(1989)
1. (fixed assets)

2. (blueprints)

3. (cultures)

20

Barney(1991)

1. (physical capital resource)

2. (human capital resource)

3. (organizational capital resource)

Verdin & Williamson(1992)

1.

2.
3.
4.

5. (
)

21

Hall(1992) Coyne(1986)

2-3
Hall, R. (1992), The Strategic Analysis of Intangible
resources, Stratgic Management Journal, Vol.13,
pp.135-144.

22

HittIreland & Hoskisson(1995)

1. (tangible resources)
(financial resources)
(physical resources)(human resources)
(organizational resources)
2. (tangible resources)

Grant(1995) (tangible
resources)(intangible resources)(human resouces)
1. (tangible resources)

2. (intangible resources)

(technology)(reputation)(culture)
3. (human resources)
(specialized
skills & knowledge)(communicative & interactive
ability)(motivation)

(1996)
1.

23

(1)

(2)

2.

(1)

(2)
()

2-5

/ (
) /

1996P102

24


2-6

Coyne

1986 1. 2.

Wernerfelt

1989 1. 2. 3.

Barndy

1991 1. 2. 3.

Verdin &
Williamson
Hall

1992

1. 2. 3.
4. 5.

1992 1. 2. 3. 4.

Nelson and Winter(1984)

1. (complexity)

2. (specificity)

25

Reed and Defillppi(1990)

(factor
mobility)
1. (tacitness)

2. (complexity)

/
3. (specificity)

Grant(1990)
1. (barriers to resources imitability)

(preemption)
2. (causal ambiguity leading to uncertain
imitability)
()

3. (imperfect transferability)

4. (barriers to resource replication)

26

Barney(1991)
1. (valuable)

2. (rare)

3. (imperfectly replicable and imitable)

(1)(unique historical conditions)-

(2)(causal ambiguity)-

27

(3)(social complexity)-

(4)(insubstitutability)

n
n

l
l
l
l

2-4
Barney, J. (1991), Firm Resources and Sustained
Competitive Advantage, Journal of Management, Vol.17,
pp. 99-120.

28

Collis(1991)
1.

2.

3. (
)()

Leonard-Barton(1992)

1. (employeeknowledge and skill)

2. (technical system)

3. (managerial system)

4. (value and norm)

29

Amit and Schoemaker (1993)

()

2-5
Amit and SchoemakerStrategic Management Journal1993P38.

Peteraf(1993)

30

()
()

()

()

2-6
Peteraf, M. A. (1993), The Cornerstone of Competitive
Advantage: A Resource-Based View , Strategic Management
Journal, Vol.14, pp. 179-191.

Grant(1995)(rent)

1.(substainability)

(1)(durability)

()

(2)(transparancy)

31

(3)(tranferability)

(3)(replicability)

2.(appropriability)

2-7 ()

Nelson and Winter

1984

1. 2.

Reed and Defillppi

1990

1. 2. 3. 4.

Grant

1990

1. 2.
3. 4.

Barney

1991

1. 2. 3.
4.

Chemanat

1991

Porter

1991

Collis

1991

1. 2. 3.

32

 2-7
Leonard and Barton

1992

1. 2. 3.
4.

Amit and Schoemaker

1993

1. 2. 3.
4. 5.
6. 7. 8.

Peteraf

1993

1. 2. 3.
4.

Tempose

1993

Grant

1995

1. 2. 3. 4.

()Grant
1980
Grant(1991)

1. (resource)

2. (capabilities)

3.
(1)
(2)

33

4.

5.

4.

3.

(1)

2.
(1)
(2)

1.
(1)
(2)

5.

(1)

2-7
Grant , California Management Review , 1991, p115

34

() 1994

1.

2.

3.

4.

2-8
2000P137

35

Grant

Grant

()

Boag & Dastmalchian1998

1.2.3.4.
Mayo & Jarvis19921.2.
Peters1993

Ramanujam & Varadarajan1989

()

1. Wrigley(1970)

(1)(single product firm)

(2)(dominant product firm)

36

(3)(related product firm)

(4)(unrelated product)
2. Rumelt(1974)

(1)(single business)
(2)(dominant business)
n -(dominant-vertical)
n -(dominant-constrained)
n -(dominant-linked)
n -(dominant-unrelated)
(3)(related business)
n -(related-constrained)
n -(related-linked)
(4)(unrelated)
n -(acquisition-conglomerate)
n -(unrelated-passive)
Rumelt(1974)

3.Aaker(1984)

(1)

37

n
n A.B.
C. D. E.

(2)

n
n
n
n
n
n
n
n
n
n

(Varadarajan1986)Amit & Livnat

1988Ramanujam & Varadarajan1989)

4.Hennart & Park(1993)

(1)

38

(2)

n
n

(3) Penrose(1959)

(4)

()
1.Teece(1982)

2.Montgomery(1982)

(
),

39

Montgomery(1982)

3.Ingham&Thompson(1994):
(1)
(2)

(3)

4.Chatterjee(1986)
,

5.Mahoney&Pandian(1992)
:
(1)

.
;

(2)

40

(3)

(4)

(1)(1985)

(2)

()

(3)

(4)

41

(5),
?

(6)Chatterjee&Wernerfelt(1991)

42

3-1

43

()

()

()

3-1

1.
(1995)
Barnard(1938) Selznick(1957)
(institutionalization)
(characters)

(means)

44

2.

3-1
3-1

/ (
) /

2000P128

3.
(1995)
( 3-2)
(tacitness)

(Reed and Defillippi1990Barney1991Grant1991Amit

and Schoemaker1993) polaniy(1967)

Wagner and Sternberg (1958)

Myers and
Davids(1992)

45

(nontradability)

(Williamson,1975;Grant,1990;Amit and Schoemaker,1993)

3-2

1995P41

()
Allen & Hamiltom (1985)

Hax. & Majluf (1991)

46

1.
Porter(2000)
2.
Aaker (1984)
Rumelt (1974)
(Single product
firm)(Dominant product firm) (Related product
firm) (Unrelated product firm)Hill & Hoskisson (1987)
(Vertical Integration) (Horizontal
Integration) (Conglomerate Diversification)

2.
Daniel(1961)
Daniel

(Key Success FactorKSF)

Crag and Grant

47

(1)(1988)

(2)Crag and Grant1993(Strategic Management)

(
)

()
1.(Strategy Business Units)
Hall(1978)

2.(Business Strategies)

48

1.

2.

49

axMajluf(1991)

Hill&Hoskisson(1987)

Asker(1984)
1. 2. 3.
4. 5. 6. 7.
Barney(1991)

50


(2001)

Porter(2000)

(1995)

(Grant,1991)
(Appropriability)

(Grant,1991)

(1994a)

(
1994b1995b) H M(1997)

51

1953

1976
6
1975

1995
2000
140

4-1

52

4-1 ()

53

2001
1999
1998
1998
()1998
1997
1996
1998
()1998
1997
1996
1976
1953

1999
1996
1995
1995
1993
1992
1992
1992
() 1991
1991
9991
1991
1991
1990
1989
1988
1984
1977

2001
2000
1994
1991
1989
1974
2001
1993
1993

 1998
1998
1998
1997
1997
1997
SINOPAC BAN CORP. 1997
1996
(B.V.I) 1994
1994
1993
1989
1988
1988
1987
() 1985

2001
2001
FENB SECURITIES INC. 2000
2000
2000
2000
SINOPAC CAPITAL(B.V.I.) 1999
1999
SINOPAC ASSET MANAGEMENT 1999
1999
() 1999
1998
GRAND CAPITAL INTERNATIONAL 1998
ASIAN GLORY INTERNATIONAL 1998
1998
1997
1997
1997
1997
1997
1996
1996
1996
1996
1995
1993
1993
1993
1992

1990
1988
FAR EAST CAPITAL
CORPORATION 1988
1987
1985
FAR EAST
NATIONAL BANK 1974

4-1

54

 2001
2000 729
36 4,218 13 868
23 13,567 19

4-1

()
()
()
3,535
7,550
2,788
1988

3,503 68
13,960 30
5,901 30
1989

11,262 33
17,466 26
7,086 31
1990

12,696 36
30,481 24
10,805 31
1991

13,813 40
36,361 23
13,278 28
1992

19,546 108,368
32,612
1993

26,047 149,305
37,135
1994

31,571 207,926
30,840
1995

40,324 21 260,847 6
37,211 22
9,399 17
1996
53,707 22 272,797 7
40,166 24
4,506 1997
84,239 15 363,163 7
72,019 20
19,145 8
1998
102,466 20 417,982 9
61,225 29
22,554 10
1999
72,937 36 421,821 13
86,896 23
13,567 19
2000
11,438
19,326
8,986
1,802
2000

39,682
87,689
32,912
4,730

55

 4-2 ()
2001

()

1966 12

()

91,580

FAR EAST NATIONAL

1974 12 3,224,719
BANK

1974 12 100,000

()

1976 1 7,880,511

()

1977 6 7,830,435

()

1984 3

130,000

()

1985 3

199,000

()

1987 5

100,000

()

1988 1

900,000

()

1988 1

167,000

()

1988 3

400,194

()

1988 3

FAR EAST CAPITAL

CORPORATION

1988 9

20,000
141,278

1988

()

1989 1 1,530,650

()

1989 11

90,000

()

1990 8

1,000

1991

()

1991 11

20,000

()

1991 12

15,000

()

1992 1 1,584,060

()

1992

168

56

 4-2 ()
()

()
()

()

1992 3

58,798

1992 9

10,000

1992 9

198,000

1993 2

32,064

()

1993 5

624,400

()

1993 6 1,200,000

()

1993 6

50,000

()

1993 8

28,807

1993 12 1,000,000

1994 11

()

1994 2

70,000

()

1994 10

20,000

()

1995 7 2,000,000

()
()

1995 8
1996 1

1996 9 1,000,000

()

1996 12 2,000,000

()

1997 4

624,000

()

1997 4

30,000

()

1997 6

300,000

SINOPAC BAN CORP.

1997 6 3,211,894

()

1997 6 3,561,268

()

1997 7

()

1997 8 2,000,000

()

1997 8 1,500,000

()

1997 9 1,000,000

416,667
198,000

7,000

57

 4-2

1,570

21,977

ASIAN GLORY
INTERNATIONAL
LIMITED

1998 1

GRAND CAPITAL
INTERNATIONAL LTD.

1998 1

()

1998 2

500,000

()

1998 11

200,000

()

1998 12

10,000

1999

1,208

()

()()

1999 1

121,185

()

1999 6

2,000

()

1999 6

40,000

SINOPAC
CAPITAL(B.V.I.)LTD.

1999 10

NA

()

1999 12

50,000

2000

()

2000 3

NA

2000 7

NA

2000 7

NA

()

2001 6

()

2001 10

2001 8

()

()

2001

2001

58

1943 1953

(1968)

1976

1977
( 66.05.27
)

(
67.04.21 ) 1981
(
91.06.28)

1996

59

 1994
Nautica

l
1977

1986 6 11

1990

58
1993 8

1994 3

( B.V.I )
2002 3 2000
78.3 114 46.92
235.05

60

1984

61

1988
1991

1992 1992
1998
1999
2000
2000
2001 1 921

2001
4 89
2001 7 ISO 9002 2000

62

1. 2. 3. 4.

()
1988

1988

1991 12

63


1991 11

:
1998 5

1995

1995 Eastern Pretech

( 86.1.7.15 )
Eastern Pretech
Eastern Pretech

64

1992 9

l
1985

( 193 P.24)

1985 11

()

1996 ; 1997 12

65

 503

147
7
17 :

( 193 P.25)1988

1853
1987
1997 197

1996 12 ISO 9002

;
66

( 193 )

100 1992 1

1997 5
(Far East National Bank)
67

2000
MMA (Money Management Account )
MMA

B to B
(Pay-Web) ( e-Factoring)

1993 32
1997 9 450
2001 9
(SinoPac Holdings)

(
89.8.23)
1988 3

68

1992

1992
1993 2 A.T.S(
)

()()
()()
9,635

1997 9,585

69

1996 5
:
:

1996 3

1997 3
20

1998

70

1999
1999

2000
(ING)

71

 Nautica

1996 9

;
;
1997

2000

72


1997 4
1998 7
1999

( 90.6.19) 2001
(AUCHAN SA)
2001

(
90.2.8)
2001

WTO 2001 8 C STORE

( 2001.6.9)

( 90.6.19)

1996-2001
2000

73

 1974 1989
1991
1991
1995
2000 1000

1993

1991

l997

74


1943
1953
1968
1973
1974
1976

1977

1981
1983
1984
1985
1986

1987
1988

1989

75

1990

1991

1992

1993

85%

5A

Nautica

76

1994

1995

A.T.S.

Nautica

Shal Bovis

Nautica

77

1996

A
C1~C4
C5~C7

Partek

Nautica
Energy

78

1997

1998

ISO 9002

79

IBISWorld

1977

1953
1996

1981

2002 IBISWorld

80

 1990

1977

()

IBISWorld

1985

1985
11

81


1996
IBISWorld

1977 ..

82

1990

1994 3

1993 8

1991 11

. 1995 Eastern Pretech

83

1990

1997 5 (Far East National

Bank)

1985 11
()

84

(AUCHAN SA)
2001

85

86

MMA
2002

2000 MMA (Money Management Account )

B to B (Pay-Web)
( e-Factoring)

1985 11

87

()
1997 5 (Far East
National Bank)

1997 3

1997 9 450

2002 5 28

88

89

POS

150

1996 8 8 3
3 1 15 1997 3
1998 7 1998 1
9 12 1999 1
4 1999 6
12 2000 3 1997 7

90

91

 2002 3 2000 78.3

114 46.92 235.05

91 9

1985 11
()

92

 1996 ; 1997 12
503

7
17 :

1987 1997
197

1997 5
(Far East National Bank)

2000 MMA
(Money Management Account )

B to B (Pay-Web)
( e-Factoring)

1997 9 450

2002 5 28

93

1996
150

(AUCHAN SA)
2001

2000

94

WTO 2001 8 C STORE

5-1

++

95

5-2

96

1985

()

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1990
1993

1990

MMA

98

()

99


MMA
2002

POS

100

2002 3 2000
78.3 114 46.92 235.05

1997 1999

(AUCHAN SA)

101

C
STORE

(1)

(2)

(3)

102

(4)

(5)

(6)

(1)
(2)
(3)

103



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