Multiple-concept management: The challenge to retail conglomerates

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 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. 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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. 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