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https://repository.iimb.ac.in/handle/2074/18384
Title: | Strategies of conglomerates to synergize multiple businesses | Authors: | Archana, M C Nidhalkar, Vishal |
Keywords: | Multiple businesses;Conglomerate corporations | Issue Date: | 2011 | Publisher: | Indian Institute of Management Bangalore | Series/Report no.: | PGP_CCS_P11_238 | Abstract: | In many economies and business scenarios across the world, it has been observed that theprogress and evolution of the industry is marked by the three major merger waves. At the turnof the 20th century, the markets saw mergers which were primarily horizontal. During the1920’s vertically integrated oligopolies were seen to be dominating the economy. Such avertical integration has prevailed in the economy for over half a century. What was observedduring the 1960 and late 1980’s is an increase in conglomerate corporations. Theseconglomerate corporations have ever since exhibited possession of not just new sources ofpower but also new and innovative ways to put them to use, to bring them to the forefront ofcompetition and to establish themselves as a strong power in the business world.Many large multi business organizations are seen to be on a rise in the last two decades. Suchconglomerates are seen all over the world and to mention some of them from India, we haveTata Group, the Aditya Birla Group, Adani Group, Bajaj Group, Bharat Heavy Electrical Limited,Bharti Enterprises, The Godrej Group, Kirloskar group, Sahara India Pariwar, Reliance Industries,United Breweries Group, GE and many more.As the definition goes, these business conglomerates have businesses across different sectorswhich are diverse and are mostly not related to one another or can be said to be unique in theirown right. And these diverse business units function simultaneously.While many of the conglomerates have flourished due to factors which include itsorganizational structure, the leadership team and programs incorporated and over allinclination of its business strategy. However, more than the number of conglomerates whohave flourished, a lot many have disintegrated. Such conglomerates have disintegrated owingto various factors like being driven by different dynamics, incompetency of the management inextracting value which is greater than that is obtained from the individual parts. Many of theconglomerates have broken and have led way to restructuring with a view for being suitablemergers and acquisition options in order to create value to shareholders.iHowever it is not always true that a breakup is the only way to create value to shareholders.There are several examples where conglomerates have created more value than each of theindividual businesses and the diversification of their business has created positive synergies. | URI: | https://repository.iimb.ac.in/handle/2074/18384 |
Appears in Collections: | 2011 |
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PGP_CCS_P11_238_E36688_CSP.pdf | 814.13 kB | Adobe PDF | View/Open Request a copy |
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