Porter maintains that the potential for corporate value creation increases as a group's divisional activities become more integrated. The problem is:
A)Porter has no experience running real companies
B)No company can keep a promise to always increase its divisional synergies
C)The idea of corporate value creation is practically useless, because it cannot be measured
D)There is a big difference between potential and achievement.

Question

Quizplus · Accepted Answer

While Porter's theory suggests that there is potential for corporate value creation through increased integration of divisional activities, it is important to recognize that potential does not necessarily lead to achievement. Companies may not be able to keep their promise to always increase divisional synergies, and even if they do, the actual results may not meet expectations. Therefore, there is a big difference between the potential for corporate value creation and the actual achievement of it.

Porter Maintains That the Potential for Corporate Value Creation Increases