We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The Decline of Conglomerates: Case Studies on GE, Johnson and Johnson and Toshiba.
- Authors
Gopalratnam, Mohan
- Abstract
Diversifying into various other businesses and keeping all subsidiaries under one big umbrella has been an accepted corporate organizational structure for companies to grow into conglomerates. In a conglomerate, one company owns a controlling stake in a number of smaller firms, all of whom conduct their business separately and independently. In the second half of 2021 itself, three major conglomerates announced the breakup of their businesses into multiple units. The first to announce a breakup was the much revered and respected General Electric. General Electric announced that it would be breaking up into three separate companies in November 2021. The second to follow suit was the US pharmaceutical giant Johnson and Johnson. Across the Pacific, the Japanese conglomerate Toshiba, announced that it would be breaking up into three separate companies dealing with infrastructure, semiconductors and devices. These announcements created a serious question in the minds of strategic management thinkers who wondered if the conglomerate as an organizational entity would survive and be an acceptable proposition. Do these three examples signal a decline of conglomerates? Through a set of three small case studies, this paper examines the circumstances and forces that led each of these conglomerates to pursue demergers. The case studies were put together with information from secondary sources and from available literature on demergers. This paper also seeks to identify the critical success factors for improving the organizational performance after the breakup and prognosticate on the implications of the decline of conglomerates on other conglomerates that continue to operate in India and overseas.
- Subjects
TOSHIBA KK; CONGLOMERATE corporations; GENERAL Electric Co.; ORGANIZATIONAL structure; JOHNSON &; Johnson (Company); CRITICAL success factor; SEMICONDUCTOR devices; ORGANIZATIONAL performance
- Publication
IUP Journal of Business Strategy, 2022, Vol 19, Issue 1, p36
- ISSN
0972-9259
- Publication type
Article