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Better Off or Far Off?

Serlachius, Matilde LU ; Holmberg, Elsa LU and Paulsson, Axel LU (2022) IBUH19 20221
Department of Business Administration
Abstract
This thesis investigates how corporate diversification strategies are justified and hones in on the theoretical disagreement between two prominent diversification justification models: Porter’s Essential Tests and The Parenting Advantage Framework. The models aim to provide the same utility, namely to ascertain whether a corporate diversification effort will create or destroy shareholder value, however the conceptual discrepancy between the two leads to a fragmented picture of how to justify diversification strategies. This discrepancy is qualitatively studied through an embedded case study of ICA Gruppen and three of its diversification efforts, which are all individually subjected to the judgement of Porter’s Essential Tests as well as... (More)
This thesis investigates how corporate diversification strategies are justified and hones in on the theoretical disagreement between two prominent diversification justification models: Porter’s Essential Tests and The Parenting Advantage Framework. The models aim to provide the same utility, namely to ascertain whether a corporate diversification effort will create or destroy shareholder value, however the conceptual discrepancy between the two leads to a fragmented picture of how to justify diversification strategies. This discrepancy is qualitatively studied through an embedded case study of ICA Gruppen and three of its diversification efforts, which are all individually subjected to the judgement of Porter’s Essential Tests as well as The Parenting Advantage Framework. The empirical findings suggest that the criteria stipulated by The Parenting Advantage Framework are harder to fulfil compared to Porter’s Essential Tests, however they are also insufficiently flexible to be applied to a multitude of different diversification strategies. Nevertheless, the findings also suggest that Porter’s Essential Tests are deficient of a critical assessment of the ownership role of the firm in diversification ventures, which instead is a strength of The Parenting Advantage Framework. The empirical findings and the advantages of the two justification models found in this thesis are merged in an attempt to create a united justification model, hence this study aims to contribute to the existing body of literature by alleviating the conceptual disagreement between Porter’s Essential Tests and The Parenting Advantage Framework. (Less)
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author
Serlachius, Matilde LU ; Holmberg, Elsa LU and Paulsson, Axel LU
supervisor
organization
course
IBUH19 20221
year
type
M2 - Bachelor Degree
subject
keywords
Corporate Diversification, Diversification Strategy Justification, Porter’s Essential Tests, Parenting Advantage, ICA Gruppen, Synergies
language
English
id
9089418
date added to LUP
2022-08-01 13:00:29
date last changed
2022-08-01 13:00:29
@misc{9089418,
  abstract     = {{This thesis investigates how corporate diversification strategies are justified and hones in on the theoretical disagreement between two prominent diversification justification models: Porter’s Essential Tests and The Parenting Advantage Framework. The models aim to provide the same utility, namely to ascertain whether a corporate diversification effort will create or destroy shareholder value, however the conceptual discrepancy between the two leads to a fragmented picture of how to justify diversification strategies. This discrepancy is qualitatively studied through an embedded case study of ICA Gruppen and three of its diversification efforts, which are all individually subjected to the judgement of Porter’s Essential Tests as well as The Parenting Advantage Framework. The empirical findings suggest that the criteria stipulated by The Parenting Advantage Framework are harder to fulfil compared to Porter’s Essential Tests, however they are also insufficiently flexible to be applied to a multitude of different diversification strategies. Nevertheless, the findings also suggest that Porter’s Essential Tests are deficient of a critical assessment of the ownership role of the firm in diversification ventures, which instead is a strength of The Parenting Advantage Framework. The empirical findings and the advantages of the two justification models found in this thesis are merged in an attempt to create a united justification model, hence this study aims to contribute to the existing body of literature by alleviating the conceptual disagreement between Porter’s Essential Tests and The Parenting Advantage Framework.}},
  author       = {{Serlachius, Matilde and Holmberg, Elsa and Paulsson, Axel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Better Off or Far Off?}},
  year         = {{2022}},
}