Leibold, M.; Van Tonde , C. J.
A icle
Mul iple-concep managemen : The challenge o e ail
conglome a es
Sou h A ican Jou nal o Business Managemen
P o ided in Coope a ion wi h:
Uni e si y o S ellenbosch Business School (USB), Bell ille, Sou h A ica
Sugges ed Ci a ion: Leibold, M.; Van Tonde , C. J. (1985) : Mul iple-concep managemen : The
challenge o e ail conglome a es, Sou h A ican Jou nal o Business Managemen , ISSN 2078-5976,
A ican Online Scien i ic In o ma ion Sys ems (AOSIS), Cape Town, Vol. 16, Iss. 1, pp. 12-17,
h ps://doi.o g/10.4102/sajbm. 16i1.1065
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/217882
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Mul iple-0>ncep
managemen - he
challenge
o
e ail
conglome a es
M.
Leibold
Uni e si y o S ellenbosch, S ellenbosch
C.J.
an
Tonde
Pep
S o es L d,
Head
O ice, Kuils Ri e
The inc easing end owa ds o ma ion
o
conglome a es
(mul iple-concep o ganiza ions)
in
Sou h A ican e ailing
has b ough abou majo manage ial challenges. These
challenges lie in he ealm
o
co po a e and business
s a egy, o ganiza ion,
and
managemen expe ise. This
a icle b ie ly analyses he na u e
o
e ail conglome a es
in
Sou h A ica, illus a es he eme ging p oblems which
con on hem, and hen o e s sugges ions o new
app oaches o assis managemen . The need o new
concep ual
and
echnical skills is emphasized, especially
in
he ealms
o
co po a e s a egy o ien a ion, implemen a ion
o
po olio
amewo ks,
o ganiza ional
lexibili y, a
nego ia i e co po a e cul u e, di e en ia ed managemen
s yles,
and
esea ch.
S.
A .
J.
Bus. Mgm .
1985,
16:
12-17
Die oenemende neiging na o ming
an
konglome a e
( eel-
uldigekonsep-o ganisasies)
in
die Suid-A ikaanse
kleinhandel
he
belang ike
bes uu sui dagings
neegeb ing.
Hie die
ui dagings
is
gelee
op
die
gebiede
an
ko po a iewe-
en
besigheids a egie, o ganisasie
en
bes uu s aa dighede. Hie die a ikel on leed ko liks die
aa d
an
kleinhandel-konglome a e in Suid-A ika, illus ee die
on luikende p obleme wa hulle kon on ee
en
bied dan
oo s elle
aan
i nuwe benade inge e onde s euning
an
bes uu .
Die
behoe e
aan
nuwe konsep uele
en
egniese
aa dighede wo d beklem oon, e al op die gebiede
an
ko po a iewes a egie-o i4!n asie, implemen e ing
an
po olio aamwe ke, o ganisa o iese buigbaa heid, 'n
ko po a iewe onde handelingskul uu , gedi e ensiee de
bes uu s yle
en
na o sing.
S.-A .
Tydsk . Bed y sl. 1985,
16:
12-17
M.
Leibold*
Depa men
o
Business Economics, Uni e si y
o
S ellenbosch,
S ellenbosch,
7600
Republic
o
Sou h A ica
C.J.
an Tonde
Pep S o es L d, Head O ice, P.O. Box 76, Kuils Ri e , 7530
Republic
o
Sou h A ica
*To whom co espondence should be add essed
Accep ed Oc obe
1984
In oduc ion
One
o
he majo ends in e ailing in Sou h A ica du ing
he pas i e yea s has been he conside able inc ease in
o ma ion
o
e ail conglome a es h ough me ge s, join
en u es, acquisi ions,
o
in e nal de elopmen
o
new e ail
concep s. This end is a esul
o
inc easing compe i ion in
mos e ailing sec o s as i ms s i e o p o i able g ow h
oppo uni ies in e ailing ields o he
han
hei adi ional,
o en ma u e ones (Leibold,
1981
). This, in
um,
is
due
o
inc easingly igh e ading condi ions om abou he middle
1970's, wi h expansion s a egies
o
many e aile s leading o
a si ua ion
o
sa u a ion and e en o e s o ing in many ading
a eas.
I seems ha he end owa ds e ail conglome a es
is
likely
o
con inue, i no in ensi y, du ing he nex i e yea s, as
he es
o
he 1980's would p obably wi ness only mode a e
economic g ow h (Leibold, 1983a:161-165). Fu he mo e,
exis ing e ail o ganiza ions a e likely
o
launch new e ail
concep s aimed a he g owing Black-consume ma ke , as
well as o he consume segmen s, in
an
inc easingly
ag-
men ed ma ke en i onmen .
Re ail conglome a es a e, howe e , con on ed wi h majo
manage ial challenges which could o m he key
o
success
o
demise
o
he en i e i m. This conce ns o ganiza ional
di icul ies, in e nal managemen con lic s, dea h
o
manage ial expe ise in handling a di e si y
o
e ail concep s,
and
he endency owa ds o e lapping
o
e ail s a egies in
he g oup.
The
challenge o e ail conglome a es
is
o de elop
and
implemen new concep ual, o ganiza ional, and echnical
skills
o
manage app op ia ely i s di e se ac i i ies.
The e ail conglome a e in Sou h A ica
The e ail conglome a e
is
some imes e e ed o as a mul iple-
concep o ganiza ion
o
conglome chan (Tillman, 1971:44
and
Schinkel, 1976:30). I can be de ined as a mul iline-
me chandising empi e unde cen al owne ship, usually
combining se e al e ail ins i u ions, concep s,
o
s yles wi h
a ce ain deg ee
o
in eg a ion
o
managemen
and
dis ibu ion
unc ions. Thus, one can iew such o ganiza ions as co -
po a ions which ope a e a a ie y
o
di e en e ailing
o mulas, bu whose di e se ope a ions o en sha e .such
co po a e se ices as managemen in o ma ion sys ems, com-
pu e ized in en o y con ol, c edi p ocessing, cen al buying
s a
assis ance,
and
physical
dis ibu ion
sys ems.
Examples
o
e ail
conglome a es
in
Sou h
A ica
a e
lis ed
in Table
1.
Va ious
heo ies
can
be
o wa ded
in
an
a emp
o
explain
he
e olu ion
and
g ow h
o
e ail
conglome a es,
such
as
cycle
S.
A .
J.
Bus. Mgm .
1985,
16(1)
13
Table
1 Some e ail conglome a es in Sou h A ica
Edga s Pep Foschini Sco Woolwo hs
S o es L d S o es L d L d S o es L d T uwo hs L d
Acke mans Pep Ame ican
Swiss
D ess own Woolwo hs
Edga s Hal P ice Foschini Jills T uwo hs
Je Hype e e Ma khams Sco s Topics
Sales House Shop i e
heo ies, acuum heo ies, he c isis-change heo y, and he
heo y
o
na u al selec ion (Leibold,
1981).
F om hese
i
seems
ha acuum heo ies o m an accep able pa ial body
o
explana ion; his inco po a es he 'co e- inge' concep
o iginally pos ula ed by Alde son, which explains he p ocess
o
oid- illing in e ms
o
h us s made by bo h es ablished
and non-es ablished i ms (Alde son, 1957:56).
The 'co e- inge' concep s a es ha once a i m has gained
a ma ke niche o i sel , he niche p o ides a ha en o he
i m du ing pe iods
o
inno a i e expe imen a ion, isks,
o
dange .
Thus, i a i m ails in an a emp
o
di e si y i s ac i i ies,
i can all back on i s co e o suppo while
i
eg oups and
de elops new s a egies, i.e. i s niche assumes a so
o
p o ec i e unc ion agains di e si ying o ays. The expe ience
o
some e ail conglome a es
in
Sou h A ica seems o sub-
s an ia e he 'co e- inge' concep -as hey mo e in o a eas
un amilia o hem, i.e. beyond hei ma ke niches, some
expe ience di icul ies. Examples seem o be he Pep S o es
G oup (wi h
i s
Papillon and Ho line expe iences),
Sco s
(wi h
Uniewinkels), Edga s (wi h Shelleys, Je , and Uni e sal
S o es), and
CNA
(wi h CNA Elec onics and TV).
The commi men s on he pa
o
es ablished
i ms
o speci y
niches and ways
o
doing business pe mi oids o de elop
in he ma ke and hus c ea e oppo uni ies o new i ms o
ill
hese oids. Many
o
he es ablished i ms ealize ha hei
adi ional ac i i ies a e mo ing in o a ma u e o
e en
declining
phase
o
he li e cycle, and anxiously in es iga e possible new
's a s' o be acqui ed o de eloped o p o ide needed
p o i abili y g ow h o he u u e. This ac
is
u he
unde sco ed by he diminishing
o
Sou h A ican ins i u ional
li e cycles, i.e. he ime be ween in oduc ion
o
a new e ail
concep and he poin a which
i
eaches ma u i y
is
g owing
p og essi ely sho e . This end
is
e lec ed
in
Table 2, which
illus a es he es ima ed pe iod om incep ion o ma u i y
o
a numbe
o
exis ing and an icipa ed Sou h A ican e ailing
ins i u ions (Leibold,
1981
).
O he explana ions
o
he e ail conglome a e mo emen
include he need o elimina e o educe in ense compe i ion
in an indus y, o acqui e su icien
size
no o be domina ed
by powe ul manu ac u e s, and me ely o he sake
o
powe
i sel .
Eme ging
p oblems
o
e ail
conglome a es
Fo mal esea ch (Leibold,
1981)
in o and in o mal discussions
wi h e ail conglome a e managemen indica e majo p oblems
which a e a ising in s a egy, o ganiza ion, and ope a ional
expe ise
o
he conglome a e and i s business uni s.
Rega ding s a egy,
i
seems ha many i ms a e lacking
a clea idea
o
hei co po a e mission (wha hey a e and wha
hey wan o be) and he missions
o
hei business uni s o
e ail concep s. This o en esul s
in
di e si ica ion in o
un ela ed e ail ields, o ac i i ies whe e he necessa y
p oduc /ma ke expe ise
is
de icien . This lack
o
clea ly
s a ed oles and posi ions
o
he company and i s uni s leads
Pages Top Cen e
Table
2 Diminishing o Sou h A ican e ail ins i u-
ional li e cycles
Es ima ed
Es ima ed numbe
o
pe iod o yea s o
Type
o
ins i u ion ma u i y ma u i y
Depa men s o es
1880-
1960
80
Va ie y s o es
1920-
1965
45
Supe ma ke s
1935-
1970
35
Discoun depa men s o es 1955-1975
20
Home imp o emen cen es 1965-1975
10
Hype ma ke s 1975-1985
10
Home u nishing wa ehouses
1975-
1985
10
Fas ood se ice ou le s 1970-1980
10
Ca alogue show ooms 1980-1985 5
o con lic ing in e es s
o
managemen g oups and indi iduals,
and si ua ions whe e concep s expand in o each o he 's
ma ke , ca y he same
o
subs an ially o e lapping me chan-
dise,
look alike, imi a e each o he , compe e di ec ly on p ices,
and ad e ise
a
he same ime in he same media a he same
a ge ma ke .
A ela ed p oblem o s a egy
is
he dis up i e impac which
mul iple concep s seem
o
ha e on he in e nal o ganiza ion
o
he co po a ion. Re ail conglome a es a e o en bese by
bi e in e nal compe i ion among i s uni s o common
suppo se ices
o
he g oup, such as esea ch, eal es a e,
wa ehousing, logis ics, and da a p ocessing. This
is
a esul
o
con lic ing ambi ions and in e es s
o
execu i es, which in
u n
is
mainly bo n ou
o
lack
o
clea ly de eloped indi idual
and common oles
o
e ail concep s. This si ua ion
is
o en
agg a a ed by g oup se ice depa men s, o example whe e
he da a-p ocessing depa men a emp s
o
impose i s
adminis a i e p ocedu eS on all concep s,
o
he eal-es a e
depa men p esc ibes s o e loca ion o all ypes
o
uni s,
wi hou p ope conside a ion
o
he unique needs
o
each
concep .
I
is
un o una e ha in mos ins ances he mo e inno a i e,
en ep eneu ially managed business uni , which could be he
new g ow h 's a '
o
he g oup,
is
s i led.
Ano he in e ela ed p oblem
is
ha
o
managemen
expe ise, especially on he ope a ional
le el.
A newly acqui ed
o concei ed business uni
is
o en s a ed by g oup pe sonnel,
who we e ained and o ien a ed in he adi ional line
o
business and a emp o apply he same managemen s uc u e
and p ocedu al no ms wi h which hey a e amilia .
The necessa y me chandising and o he expe ience o he
new concep
is
simply lacking, and he o iginal g ow h
p ospec s ( he main eason o di e si ying)
ail
o ma e ialize.
Illumina ing in his espec a e he ue ul wo ds
o
he
managing di ec o
o
he
CNA
g oup
o
companies a e he
ailu e
o
CNA Elec onics in he 1970's: 'Qui e hones ly,
we
wen in o
i
p ema u ely wi hou asking wha he
hell
we
we e
14
doing,
o
whe he
we
had he expe ise
o
e en he space
o
gi e adequa e exposu e
o
he p oduc '(CNA, 1975).
Sugges ed
new
app oaches
o
assis
managemen
New app oaches o assis managemen
in
adequa ely di ec ing
a di e si ied mul iple concep o ganiza ion seem o be equi ed
in especially
six
(in e ela ed) a eas, i.e. co po a e s a egy,
po olio echnology, o ganiz.a ion, managemen s yles,
esea ch, and co po a e cul u e.
Co po a e s a egy
Recen esea ch indica es ha e ail managemen 's app oach
and
o ien a ion owa ds e ailing s a egy decision-making
is
conside ably de icien , and should be adap ed o include a
b oade co po a e s a egy o ien a ion (Leibold, 1983a:25).
Wi h he con inuous end owa ds di e si ica ion
and
o ming
o
conglome a es,
i
has become clea ha he concep
o
en e p ise s a egy consis s
o
h ee dis inc ypes
o
s a egy
le els, namely co po a e, business,
and
unc ional (Ho e &
Schendel, 1978:25).
The
le el
o
co po a e s a egy add esses he ques ion 'wha
se
o
businesses should
we
compe e in?', while he le el
o
business s a egy add esses he ques ion
'how
should we
compe e in he
XYZ
business?'.
In co po a e s a egy decision-making he p ima y com-
ponen s a e scope
o
ac i i ies and esou ce deploymen s.
An
en e p ise can easily become a collec ion
o
di e se
and
con using business in e es s, wi h li le common pu pose
and
o e all h us , i co po a e s a egy decision-making
is
no
conduc ed in a o malized, a ional way. Thus, e ail conglo-
me a es should con inually e iew hei scope
o
ac i i ies,
which de ines i s basic mission
and
cha ac e . In conjunc ion
wi h scope, esou ce deploymen s in ol e he le els
and
pa e ns
o
he en e p ise's pas
and
p esen esou ce
and
skill
deploymen s among he di e en business en i ies in i s
co po a e g oup.
An
example
o
de icien e ail co po a e s a egy decision-
making in Sou h A ica
is
ha
o
G ea e mans S o es, be o e
i s ake-o e by he Ki sh G oup in 1981/82 (F iedland,
1982:
35
-43). The
1981
annual epo desc ibes he G ea e mans
G oup as comp ising h ee main componen s -depa men
s o es, he Acke mans chain,
and
Checke s; he la e
consis ed
o
1 (i() supe ma ke s
and
supe s o es, ou hype -
ma ke s and i e Milly's. Acco ding
o
M
Go don
U ian,
..
· I .
hJ,,1.
lkd ,
hi.
1985,
16(1)
new managing di ec o , he inhe en s eng hs
o
Checke s
we e ne e p ope ly exploi ed,
and
managemen pe sis ed
in
i e ing away i s 'cash cow' o inance o he ope a ions
which
had li le jus i ica ion. Appa en ly he e was li le hough
gi en
o
consolida ion, p ope scope
o
he g oup,
and
app op ia e deploymen
o
esou ces.
Al hough co po a e s a egy
is,
admi edly, among he
mos
di icul decision-making a eas in any en e p ise,
i
should
be
app oached wi h he ollowing key issues s ongly in
mind:
• En i onmen conside a ions ega ding main oppo uni ies
and
h ea s.
• The en e p ise's esou ces
and
dis inc i e compe ences,
as
well as i s limi a ions.
• The salien cha ac e is ics
o
he en e p ise's his o y,
e.g.
i s objec i es, policies, accomplishmen s,
and
ailu es.
•
The
p e e ences
o
managemen
and
owne s, and
he
co po a e cul u e (see
'Co po a e
cul u e').
• A s a emen
o
mission which
is
speci ic as
o
he business
domain(s) in which he en e p ise
will
ope a e.
These issues p o ide a amewo k o co po a e s a egy
based upon conside a ion
o
ma ke
and
en e p ise e olu ion,
and
s a egic i .
Po olio echnology
Po olio echnology can be desc ibed as he skills necessa y
o
guide, co-o dina e,
and
e alua e a mul iplici y
o
e ail
concep s wi hin one co po a e body. This in ol es echniques
which enable managemen o gain a holis ic pe spec i e
o
he po olio
o
di e en business concep s which supplemen
and
suppo each o he owa ds achie ing he objec i es o
he co po a ion.
These echniques should acili a e a ealiza ion ha each
business uni has a dis inc mission, ole,
and
posi ion
in
he
ma ke place; ha each uni could
be
a a di e en s age o
he ins i u ional li e cycle;
and
ha one concep could be
used
o
shield o he concep s om hea y ou side compe i ion.
I
is
he e o e essen ial
o
o mula e explici ly he unique
objec i es, equi emen s,
and
demands
o
all concep s a
a ious s ages
o
hei de elopmen .
One
such echnique which enables a holis ic pe spec i e
o
he co po a ion
is
illus a ed in Table 3 (Schinkel,
1976:30).
In addi ion o his ype
o
w i en po ayal
o
he po olio,
i
is
use ul
o
de elop g aphic po ayals.
One
such example
is
he Gene al Elec ic business sc een, as illus a ed
in
Table
3 Concep po olio ma ix o e ail conglome a es
Aspec conside ed
S age
o
li e cycle
Role
in
co po a ion
Na u e
o
compe i ion
Managemen
needs
Consume
segmen (s)
se ed
Majo
objec i e(s)
Re ail concep
T adi ional
depa men s o e
(A)
Ma u i y/ decline
Supe ma ke
(8)
Ma u i y
Flagship o co po a ion; Majo sou ce
o
e enue;
main ain ma ke sha e backbone
o
business
Low o medium In ense
S ingen con ols and Decen alized managemen ;
eedback o managemen ; igh cos con ols·
cen alized managemen au oma ion '
Middle o highe s a us Lowe o middle s a us
'B eak-e en'
XOJo
con ibu ion o
p o i abili y
Medium-sized
con enience ood s o e
(C)
Incep ion
Ven u e o lea ning
and expe imen a ion
Non-exis en o low
En ep eneu ial demands,
low in es men , simpli i-
ca ion
o
ope a ions
All s a us; con enience
and ime-conscious
'Double sales in wo
yea s'
Hype ma ke
(D)
Rapid g ow h
Second majo sou ce o
e enue; Shield o (8)
and (C)
Medium
Decen alized managemen ,
igh con ol, simpli i-
ca ion
o
ope a ions
Middle o highe s a us;
mo o ized
YOJo
con ibu ion o
p o i abili y
S.
A .
J.
Bus. Mgm .
1985,
16(1)
Indus y A ac i eness
Ma ke size
Ma ke g ow h a e
P o i ma gin
Compe i i e in ensi y
Cyclicali y
Seasonali y
Scale economies
High
Medium
Low
Rela i e ma ke sha e
P ice compe i i eness
P oduc quali y
Knowledge o cus ome /ma ke
Sales e ec i eness
Geog aphy
Business s eng h
S ong A e age Weak
Figu e
I The Gene al Elec ic business sc een.
Figu e 1
(Ho e
& Schendel, 1978).
In he abo e igu e he a ea
o
he ci cles
is
p opo ional
o
he size
o
he indus ies in which he a ious businesses
compe e.
The
pie slices wi hin he ci cles e lec each business
uni 's ma ke sha e; consequen ly, hei a eas a e also
p opo ional
o
he sizes
o
he businesses which hey
ep esen .
The
e ical axis ep esen s he indus y's a ac i eness,
which
is
based
on
a ing such ac o s as ma ke g ow h a e,
ma ke size, p o i ma gins, compe i i e in ensi y, cyclicali y,
seasonali y,
and
scale economies.
The
ho izon al axis
ep esen s he uni 's business s eng h
o
abili y
o
compe e
in ha indus y. Business s eng h
is
a weigh ed a ing
o
such
ac o s as he uni 's ela i e ma ke sha e, p ice compe i i e-
ness, me chandising acumen, knowledge
o
cus ome s/
ma ke s, sales e ec i eness,
and
geog aphy.
As a s a ing poin in po olio analysis he Gene al Elec ic
business sc een has de ini e ad an ages. Howe e , i does no
depic as e ec i ely as i migh he posi ions
o
new business
concep s
ha
a e beginning
o
g ow in o new indus ies.
Fo
his pu pose a
p oduc /ma ke
e olu ion ma ix
is
use ul, as
illus a ed in Figu e 2 (Ho e & Schendel, 1978).
As wi h he p e ious igu e, he ci cles ep esen he sizes
o
he indus ies in ol ed,
and
he pie wedges he ma ke
sha es
o
he businesses in ol ed. Each business
is
plo ed
COMPETITIVE POSITION
S ong A e age Weak
De elopmen A
C
G ow h
~
STAGE
OF
PRODUCT
Shake·OU
MARKET
EVOLUTION
Ma u i y/
Sa u a ion F
Decline
Figu e
2 The p oduc /ma ke e olu ion ma ix.
15
acco ding
o
i s s age
o
p oduc /ma ke
e olu ion, i.e.
de elopmen , g ow h, shake-ou , ma u i y,
o
decline. Fu u e
posi ions can be plo ed
and
used
o
iden i y
majo
s a egic
op ions
and
issues. Thus,
one
can ask why business B has
no
been able
o
secu e a highe sha e
o
he ma ke , gi en
i s s ong compe i i e posi ion
and
he g ow h
o
i s indus y,
and
app op ia e s a egies
o
achie e his could be planned.
In e es ingly, he e seems
o
be
no
e idence
ha
a
majo
e ail i m in he Uni ed S a es
o
Ame ica has ied
o
implemen hese app oaches, al hough he Sea s, Roebuck
company
is
ci ed as
one
possible excep ion (Buzzel, 1980: 16).
O ganiza ion
I seems ha
up
o
now adi ional o ganiza ion s uc u es
ha e been unable
o
cope wi h he dis u bing impac which
mul iple concep s ha e
on
he in e nal o ganiza ion
o
e ail
conglome a es. The o en uno ches a ed s a egies
o
mul iple
concep s esul in ac imonious in e nal compe i ion o
op
managemen a en ion and suppo se ices such as eal es a e,
wa ehousing, logis ics,
da a
p ocessing,
and
esea ch.
Al hough a ce ain deg ee
o
in e nal compe i ion may
be
seen
as bene icial o p oduc i i y,
i
un o una ely eaches nega i e
p opo ions in a e y sho ime.
I
his o ganiza ional u bulence
is
no sa is ac o ily
esol ed,
i
can lead
o
disc imina o y
and
un ai p ac ices
which esul in ocus
on
ce ain business concep s
o
he
exclusion
o
he whole o ganiza ion. A solu ion
may
be
o
adop
an
o ganiza ional
app oach
which:
•
is
lexible
and
di e en ia es be ween he needs
o
each
business concep .
Fo
example,
one
business concep
may
need double he o ganiza ional suppo
o
ano he ; i
may
need
o
epo di ec ly
o
he chie execu i e ins ead
o
h ough no mal channels; and i may need
o
be gi en mo e
en ep eneu ial scope owing
o
he na u e
o
i s indus y;
• assigns highe s a us o s a (se ice) o ganiza ions
o
make
hem ully awa e
o
he di e en ia ed needs
o
each mul iple
concep . This should be accompanied by s ic e con ols
o
ensu e ha in e nal compe i ion o hei se ices emain
ai
and
hei ac i i ies unbiased;
• leads
o
a high deg ee
o
in eg a ion
o
suppo se ices,
as indi idual business concep s o en equi e a
'package'
o
se ices which
is
uniquely sui ed
o
hei needs;
and
• inco po a es a mul iple-concep commi ee which egula ly
analyses di e ences
and
simila i ies be ween concep
s a egies
and
managemen needs.
Managemen s yles
Fo
e ail execu i es, he diminishing
o
e ail ins i u ional li e
cycles
and
inc easing a e
o
en i onmen al changes
pu
a
p emium
on
adap abili y
and
being able
o
expe imen wi h
new managemen ideas
and
s yles. In la ge conglome a e
o ganiza ions wi h mul iple ypes
o
ou le s e aile s should
conside he use
o
di e en managemen s yles
o
e en di -
e en managemen g oups du ing a ious s ages
o
de elop-
men . Al hough i undoub edly inc eases he complexi y
o
managemen , i also means ha a
company
can ne e
a o d
o
ge 'locked in'
o
one
o
a ew pa icula app oaches
o
philosophies
o
managemen .
A good example
o
di e en ia ed managemen s yles
is
p o ided by Fede a ed Depa men S o es in he Uni ed S a es
o
Ame ica (Da idson, Ba es &
Bass,
1976:95).
Upon
launching
o
i s
Gold
Ci cle discoun di ision
he
company es ablished a managemen ask o ce ha was com-
ple ely au onomous om he exis ing Fede a ed managemen
g oup.
The
ask o ce was ee
o
y new managemen

16
.-Ai .
l,,h~ .
lku ,hl.
1985,
16
(1)
Table
4 Managemen ac i i ies
in
he e ail li e cycle
Ca ego y
Ma ke
cha ac e is ics
App op ia e
e aile
ac ions
A ea o
subjec
o
conce n
Numbe
o
compe i o s
Incep ion
Ve y
ew
Ra e
o
sales
g ow h
Ve y
apid
Le el
o
p o i abili y
Low
o mode a e
Du a ion
o
new
3 - 5
yea s
inno a ions
In es men / g ow h/
isk
decisions
In es men
minimiza ion -
high
isks
accep ed
Cen al managemen Concep e inemen
conce ns h ough adjus men s
and expe imen a ion
Use
o
managemen
con ol
echniques
Mos
success ul
managemen
s yle
Minimal
En ep eneu ial
concep s and ope a ing p ocedu es. Wi h his app oach,
Fede a ed had an inno a i e, ee-wheeling managemen s yle
o i s discoun di ision and a mo e conse a i e, con olled
s yle o i s con en ional depa men s o e ope a ion.
Table 4 e lec s managemen ac i i ies in each s age
o
ins i u ional li e cycle de elopmen ,
and
sugges s he mos
success ul managemen s yle in each s age (Da idson, e al.,
1976).
Resea ch
Gi en he complexi ies
and
isks in ol ed in managing e ail
conglome a es, and in de eloping new e ail concep s, many
e aile s may p e e
o
lea e he di icul ask
o
expe imen ing
wi h new app oaches o smalle , mo e en ep eneu ial
companies.
Then new concep s ha p o e success ul can
be
acqui ed
o
copied, a leas i he inno a ions a e disco e ed soon
enough. O he s may decide o emba k
on
he s imula ing ask
o
expe imen a ion on i s own.
Wha e e he decision, he moni o ing
o
expe imen a ion
and
inno a ion equi es a mo e subs an ial
and
sophis ica ed
commi men o esea ch han mos e ail conglome a es now
employ. The applica ion
o
po olio analysis, e en in
an
elemen a y e sion, and he in e p e a ion
o
i s esul s equi e
a ce ain
le el
o
knowledge which e y o en canno
be
conside ed as gi en. Managemen should, in gene al, know
he c i e ia ele an o s a egic decisions,
and
pa icula ly
how o iden i y
and
in e p e ma ke s uc u es, key ma ke
success ac o s,
and
he oles
and
needs
o
di e en e ail
concep s. Resea ch should
also
be
conduc ed con inuously in o
he e ec s
o
mul iple concep s
on
he o ganiza ion
o
he
company, and he app op ia eness
o
di e en managemen
s yles in di e en ci cums ances.
In sum, mo e emphasis should
be
pu
on
he esea ch
unc ion in e ail conglome a es,
and
i s ac i i ies should
be
expanded om he adi ional ma ke emphasis
o
include a
s a egic and o ganiza ional o ien a ion.
Co po a e cul u e
Fo
mos i ms he in oduc ion
and
implemen a ion
o
S age
o
li e
cycle
de elopmen
Rapid g ow h
Mode a e
Rapid
High
5-6
yea s
High
le els
o
in es men o
sus ain g ow h
Es ablishing a p e-
emp i e ma ke
posi ion
Mode a e
Cen alized
Ma u i y
Many di ec
compe i o s. Mode a e
indi ec compe i ion
Mode a e o
slow
Mode a e
Inde ini e
Tigh ly con olled
g ow h
in
un apped
ma ke s
Excess
ca-
and 'o e -
s o ing'. P olonging
ma u i y and
e ising
he e ail concep
Ex ensi e
'P o essional'
Decline
Mode a e
di ec
compe i ion.
Many
indi ec
compe i o s
Slow
o
nega i e
Ve y
low
Inde ini e
Minimal
capi al
expendi u es
and
only
when
essen ial
Engaging
in
a
' un-
ou '
s a egy
Mode a e
Ca e ake
s a egic managemen based
on
po olio analysis cons i u es
a undamen al o ganiza ional change.
I
does no ,
howe e ,
only imply a change
o
s a egic decision beha iou
and
managemen s yle. Changes in managemen beha iou ,
and
o he induced changes,
will
e y o en equi e changes
in
a i udes
o
manage s
and
hus a change
o
o ganiza ional
cul u e.
An
o ganiza ional cul u e can p obably bes
be
desc ibed, o p ac ical pu poses, as a common subconscious
way
o
hinking
abou
he business ac i i ies and
business
philosophies
o
he company.
In iew
o
he ac ha
no
package bluep in s o mul iple-
concep o ganiza ion cul u e exis , e ail managemen
is
con on ed wi h he need
o
de elop hei own lea ning
cul u e. The aim
is
o
in use managemen wi h mo e
lexible,
adap i e
and
inno a i e a i udes,
and
o see ha indi idual
pa s as
well
as he whole o ganiza ion co-o dina e when
plan-
ning
and
s i ing o hei in e es s.
Ano he use ul app oach
is
o
s imula e a nego ia i e
cul u e, whe eby new ideas a e no imposed upon people, bu
he decision-making p ocess
is
ins ead mo e o ganic
in
na u e.
Ini ia i es may
be
aken
bu
he onus
is
on
he ini ia o o
con ince o he s
o
he alidi y
o
he idea
and
o
ob ain hei
suppo .
The di e en kinds
o
cul u al changes
do
no only equi e
ini ia ion and speci ic knowledge bu should also
be
sys ema -
ically
and
ca e ully p epa ed
and
guided. In his pe spec i e
he implemen a ion
o
s a egic po olio managemen
in
e ail
conglome a es will in mos cases equi e he in e en ion o
an
ex e nal
o
in e nal change agen , whose unc ion
is
solely
an
educa ional in e en ion and co po a e-cul u e nu se .
The
change agen should c ea e wi hin he
op
managemen eam
a
common
knowledge basis
o
he p ocesses
and
me hods o
s a egic managemen , po olio analysis, o ganiza ional
lexibili y,
and
di e en ia ed e ail concep managemen
s yles
and
needs.
Conclusion
Re ail conglome a es a e aced wi h
majo
manage ial
challenges which could a ec hei u u e g ow h and
pe -
o mance. Manage ial expe ise in guiding
and
con olling a
S.
A .
J.
Bus.
Mgm .
1985,
16(1)
di e si y
o
e ail
concep s will o m he
basis
o
u u e
success
in
an inc easingly compe i i e en i onmen .
In oduc ion
o
s a egic po olio analysis
in
e ail con-
glome a es should be linked wi h a aining p og amme o
hei manage s in s a egic planning and managemen .
This can ideally be in eg a ed wi h an o ganiza ional
inno a ion p og amme, which in conjunc ion can se e as an
ins umen o ini ia ing lea ning, manage ial lexibili y, and
a desi ed co po a e cul u e.
In oduc ion and implemen a ion
o
po olio echnology,
and aining and lea ning p og ammes, should be a pa allel
p ocess owing o i s in e wo en na u e.
The e ail conglome a e
will
always be cha ac e ized
by
a
la ge deg ee
o
di e si y in e ail concep objec i es,
managemen s yles, needs, and demands. The c ux
o
success-
ul o ches a ion
o
hese owa ds a common co po a e
objec i e
will
lie
in op managemen 's abili y o pu sue
s a egic managemen wi h aids such as po olio analysis in
a con inuous way, and de eloping and modi ying app op ia e
o ganiza ion, sys ems, and p ocedu es acco ding o
i s
condi ions and needs.
Re e ences
Alde son, W.
1957.
Ma ke ing Beha iou and Execu i e Ac ion,
17
Richa d
D.
I win, Inc., Homewood, Illinois,
56.
Buzzel, R.D.
1980.
S a egic Managemen Helps Re aile s Plan
o he Fu u e, Ma ke ing News, Ame ican Ma ke ing
Associa ion, Ma ch
7,
16.
CNA awaking om he big
sleep?
Managemen . May
1975,
p.36.
Da idson, W.R., Ba es, A.D. and
Bass,
S.J.
1976.
The Re ail
Li e Cycle, Ha . Bus. Re ., No embe ,
95.
F iedland,
R.
1982.
Wha Wen W ong a G ea e mans S o es?,
Managemen , July,
35
-43.
Ho e , C.W. and Schendel,
D.
1978.
S a egy Fo mula ion:
Analy ical Concep s, S . Paul, Minneso a: Wes Publishing
Company,
25.
Leibold,
M.
1981.
Re ailing S a egy
in
he Changing Sou h
A ican En i onmen , Unpublished D-Comm disse a ion,
S ellenbosch: Uni e si y
o
S ellenbosch; chap e
I.
Leibold,
M.
1983a.
Re ailing S a egy -The
Need
o Re ision
o
he T adi ional O ien a ion,
S.
A .
J.
Bus. Mgm .,
ol.14,
(4),
161
-
165.
Leibold,
M.
1983b.
The Sou h A ican Re ailing En i onmen ,
Re ail Ou look,
25.
Schinkel, T.
1975.
Mul iple Concep s: An Answe o he
S uggle o
New
G ow h, S o es, June,
30.
Tillman,
R.
1971.
Rise
o
he Conglome chan , Ha . Bus.
Re .,
No embe -Decembe , 44.