The rise of Tata in India, Koç Holding in Turkey, and Grupo Carso in Mexico have some management thinkers contending that the conglomerate is back at the expense of the focused firm. In his article “Why Conglomerates Thrive (Outside the U.S.)” in the December 2013 issue of the Harvard Business Review, J. Ramachandran concludes from a study of the performance of listed Indian business groups that the conglomerate is a winning organizational structure, even if isn’t popular in North America yet. In its January 11th issue, The Economist also argues that conglomerates are spreading their wings again. Often the debate turns ideological, arguing that the (emerging-world) conglomerate is an intrinsically better construct than the (Western) focused firm.
Don’t Write Off the (Western) Focused Firm Yet
Yes, conglomerates work in emerging markets. But they won’t make a comeback in the West.
January 27, 2014
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