Corporate Portfolio Analysis Tools Revisited: Assessing Causes that May Explain Their Scholarly Disdain
Article first published online: 10 AUG 2012
© 2011 The Authors. International Journal of Management Reviews © 2011 British Academy of Management and Blackwell Publishing Ltd.
International Journal of Management Reviews
Volume 14, Issue 3, pages 263–279, September 2012
How to Cite
Untiedt, R., Nippa, M. and Pidun, U. (2012), Corporate Portfolio Analysis Tools Revisited: Assessing Causes that May Explain Their Scholarly Disdain. International Journal of Management Reviews, 14: 263–279. doi: 10.1111/j.1468-2370.2011.00316.x
- Issue published online: 10 AUG 2012
- Article first published online: 10 AUG 2012
While prominent corporate portfolio analysis tools such as the BCG Growth–Share Matrix took centre stage in the field of strategic management from the 1960s to the mid-1980s, this review of the literature shows that they have since then largely disappeared from the academic agenda, despite their practical relevance and widespread application. There may be two independent reasons for this apparent scholarly disdain: corporate portfolio analysis tools (a) may have been recognized as unsuitable owing to inherent flaws or superior alternative concepts or (b) may have become obsolete because of proof that corporate diversification is inferior to market diversification. Thus, this assessment is based on an extensive review of the most relevant academic literature on corporate portfolio analysis tools and on the constitutive diversification–performance link published in leading management journals over the past five decades. The review reveals that research to date has not produced advanced tools based on an objective criticism of the original matrices, nor has corporate diversification – as a precondition for corporate portfolio analysis – proved to be inferior to market-based co-ordination mechanisms. Thus, this literature review constitutes a call for further academic research in the field of corporate portfolio analysis tools as well as corporate diversification.