| Summary: | Includes bibliographical references. === This thesis analyses the impact of strategy on the financial performance and risk of industrial firms quoted on the Johannesburg Stock Exchange over the period 1970 - 1976. This is the first study investigating the impact of strategy on economic performance in a developing economy and which utilizes a managerially orientated view of diversification to assess the association between strategy, performance and systematic risk. The strategic categorization scheme employed is based-on a-methodology which is common to exploratory studies carried out in more developed economies. Firms were placed into strategic categories based on the extent, manner and type of diversification that they exhibited. Four major and nine subcategories were identified. The results showed that South African industrial firms are not highly diversified and the composition of the firms suggest that they are at a stage of development that is comparable to that of the developed economies in 1950 when measured on the extent and manner of diversification. The growth and return performance of both major and sub-categories were analysed and a number of hypotheses were tested. The results showed that here are significant differences in performance between the categories and that utilizing the strategy classification system it was possible to distinguish between categories. In addition, the ranking of strat8gies, based on performance was -found to differ significantly from the United States research findings. An important aspect of the study was the evaluation of risk based on strategy.
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