Diversification and family business

: the case of Grupo Rocha

Abstract

Prior research has not fully explained why family businesses diversify. Neither can they answer the following question: How does the diversification strategy affects the family ties and firm’s performance? While aiming to contribute to the academic field, we studied a medium-sized Brazilian business group to understand what were the circumstances that prompted the group to diversify. In addition, we seek to know what were the effects of the diversification strategy during the development of the group. Throughout the research, we observed that in specific environment conditions, diversifying might bring opportunities to family firms that non-family companies will struggle to capture. Nevertheless, we also propose that, on the long-run, the diversification strategy could also jeopardize the future of the family business since it intensifies the erosion of relations between its members This issue is critical for further theoretical development in the field given that contemporary academic research has been over focusing on titanic business groups, thus neglecting the developmental stages that led the it to emerge. Furthermore, it also holds high practical relevance, since current family managers have little guidance on what effects the diversification strategy might have on their financial and non-financial goals, even though most of growing family businesses in emerging markets tends to diversify. Despite being a single-case study, we believe our propositions could enhance awareness of the opportunities and risks of diversifying on emerging markets. Additionally, they may also offer new researchers distinctive ideas on how to appraise the advantages and downsides of a business group.

Date of Award	29 Nov 2017
Original language	Portuguese
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ricardo Alexandre Morais (Supervisor)