3 ms·
There's an alternative explanation for corporate splitting, which also covers merging, and, as a bonus, corporate name changes, reorganizations, and logo update
by Cupertino95014 4y ago
There's an alternative explanation for corporate splitting, which also covers merging, and, as a bonus, corporate name changes, reorganizations, and logo updates:
It gives the Board and CEO something to do.
Think of it: Company MediumGuy buys OtherMediumGuy, creating BigGuy and issues press releases proclaiming "this will create great synergies and economies of scale!"
Then 10 years later, BigGuy splits into MediumGuy and OtherMediumGuy, and issues another release, "This will enable management to focus on the unique opportunities and diverse customer bases that MediumGuy and OtherMediumGuy now face!"
Ideally, the CEO doing the split is not the same as the one who did the merge, so he doesn't have to face awkward questions about his reasoning 10 years ago.
- groestl 4y agoSame thing with outsourcing and inhousing projects.
- ralph84 4y agoYes, but business schools wouldn't get as many donations from their alumni if they started publishing research saying that most of what executive management does is at best pointless.
- ilyt 4y agoNah, it is about making investor numbers go up. HP split off its test equipment business because it was steady supply of profit. It wasn't growing so it had to fuck off to separate company (then that test company split into making EE test equipment and "other" test/lab equipment). All to perpetuate the myth of eternal growth
- AlbertCory 4y ago> the myth of eternal growth Exactly. Trees die. Animals die. People die. Why shouldn't an old company, too? Or split off something that's eventually bigger than the parent. I explore that in the "What PARC Actually Did Later" section of this: https://www.albertcory.io/lets-do-have-hindsight https://www.albertcory.io/lets-do-have-hindsight
- yehCuz 4y ago