This study extends research on the business group?s network cohesion, diversification strategy, and group?s family presence in the inner circle by examining the relationship between group cohesion and diversification and the interaction effect of group?s family presence in the inner circle. In doing so, it addresses the different theoretical perspective in observing business group?s diversification strategy from past researches. We use clustering and centralization as variables to test for the construct of network cohesion. As argument made by the scholar, the power of cohesion is both a blessing and a curse. The two variables measurement can be appropriate proxies for interpreting the construct of network cohesion. We tested the research model with data on the 78 business groups, covering 5,267 affiliated firms, representing 16 industries in Taiwan. The empirical results demonstrate that group clustering is positively related to product diversification. The interaction effect of family presence in the inner circle shows significant and negative. Further, we find out the relationship of group centralization to diversification shows no support, we propose the contingency factors existing in the centralized actors. The result leads to the fact that further research in the group centralization is necessary. Keywords: Network Cohesion, Diversification, Business Group, Family Presence, Network perspective.