Discuss positive and negative roles of chabols in Korea's economic development

Positive aspects of Chaebols:

1. Easy diversification in reputed businesses and recognition of chaebols' brand name: Since band name is recognized as an intangible asset and therefore it does not deplete as the firm uses it more. Ultimately, this supports the excess resource theory of diversification.

2. Scope economies and scale economies

3. Improvements in decision making with cumulated knowledge and experiences of corporate leaders as well as the improvements in capturing new business opportunities

Negative aspects of Chaebols:

1. Lack of business transparency: In the case of Chaebols, managers with large stakes in diversified Korean chaebols frequently engage in expropriating the minority shareholders which is further fueled by the lack of transparency.
2. Inefficient resource allocation
3. Lack of adaptability and timely decision making framework
4. Core capabilities take some time to develop completely.

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