Businesses carrying out related diversification moves with the objective to gain synergy effects have been a frequently occurring phenomenon since the midst of the past century. Plenty of models have been constructed, mainly using external data, in order to predict the outcome of these moves, but a high degree of contradictory results in empiric testing shows that current models are insufficient. Our objective is to present a model which also takes into account the internal data presented by the line of research called horizontal strategies, with the aim of moving towards a more accurate explanatory model for related diversification. This is a study of literature which resulted in a model which may be used for approximations as a strategic planning device. Our main conclusions are that further empirical testing, mainly regarding the behaviour of costs for implementing interrelationships, is necessary in order to create an accurate, explanatory model for predicting the outcome of related diversification.

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Corporate governance is a subject of academic and professional debate. It has and it will continue to be a topic under scrutiny for subsequent deliberations since there are many different research dimensions and contexts associated with it. However, it has been observed that the linkage between corporate governance and strategy of a corporation remains as an untapped area with considerable avenues of research. This paper tends to explore this linkage, using Enron scandal as backdrop. In the aftermath of the debacle of US energy giant Enron in 2001, the significance of corporate governance has come under heavy scrutiny of different researchers. Whereas different explanations have been attributed to its downfall, it has been widely accepted that this was a case of failed corporate governance. This paper tends to explore Enron downfall from the perspective of failed corporate governance. By defining and exploring corporate governance and its underlying issues, the authors have used Agency theory as a theoretical framework in unison with internationally renowned auditing company - Ernst & Young Model - to understand the role of different actors and forces responsible for Enron collapse. By using qualitative research method, the authors have used secondary literature as well as combination of questionnaires and telephonic interviews to obtain viewpoint of renowned international academic / professional researchers. They have been identified through convenience sampling methodology. A few internationally renowned auditing companies have also been used as part of this survey to explore diversity of perspectives in this context. Efforts have been made; to explore the main causes rather then to write just another case on Enron. After drawing lessons from Enron, the paper concludes with the understanding that there is direct link between corporate governance and strategy of corporations. However there is diversity of perspectives in this context and hence it requires further exploration and debate.

Strategic management has long been viewed as the concept and process that link an organization and its environment together (Leibold, Probst & Gibbert, 2002). It consists of the analysis, decisions and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin & Taylor, 2005). Within the history of strategic management research there has been an unbalance between the internal and the external perspective. During the 1980s Michael Porter, one of the most prominent strategic management researchers, and his Five Forces model focused strictly on the external competitive environment (Mintzberg, Ahlstrand & Lampel, 1998). Further, in the 1990s the focus shifted from external to internal along with Jay Barney’s development of the resource based theory in 1991 (Barney, 1991). The issue of excluding one or the other perspective has now started to be acknowledged and researchers today are striving for developing models integrating both perspectives. However, theoretical models existing today that combine the two perspectives are complex and hard to apply in practice for managers within the business world. In order to address the complexity of the strategic management concept we have chosen to develop a model with the purpose to connect and relate the external and internal perspectives by conducting an in-depth analysis of a chosen company. The model also strives to be easily communicated, applicable and understandable for managers and employees on different levels within the organization. This leads us to the purpose of this thesis: “to develop a simplified model that combines the external and internal perspective of strategic management and apply this to a chosen company”. The research was conducted through a case study based on the authors’ participation in a PBM (Project Based Module) - project. The model was tested on the company in question by analyzing the company’s internal and external environment with the means of analysis tools such as PEST-analysis, strategic group analysis, threshold analysis and the SWOTanalysis. To conclude it is important to balance an organization’s internal efforts with the external market conditions and avoid excluding one or the other from the strategic management process. Combining the two perspectives results in identifying the current capabilities and competences and the direction of how to use these in order to meet market demands and gain competitive advantage.

University of Macau / Faculty of Business Administration / Department of Management and Marketing

University of Macau / Faculty of Business Administration / Department of Management and Marketing

University of Macau / Faculty of Business Administration / Department of Management and Marketing

University of Macau / Faculty of Business Administration / Department of Management and Marketing

University of Macau / Faculty of Business Administration / Department of Management and Marketing

University of Macau / Faculty of Business Administration / Department of Management and Marketing