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When I was at IBM at the turn of the century the new CEO fought splitting the company up. He figured they were better off having everything together. It worke
by acomjean 4y ago
When I was at IBM at the turn of the century the new CEO fought splitting the company up. He figured they were better off having everything together. It worked a little while he was there.
https://en.wikipedia.org/wiki/Lou_Gerstner#IBM https://en.wikipedia.org/wiki/Lou_Gerstner#IBM
"In his memoir, Who Says Elephants Can't Dance?, he describes his arrival at the company in April 1993, when an active plan was in place to dis-aggregate the company. The prevailing wisdom of the time held that IBM's core mainframe business was headed for obsolescence. The company's own management was in the process of allowing its various divisions to rebrand and manage themselves — the so-called "Baby Blues." Then-CEO John Akers decided that the logical and rational solution was to split IBM into autonomous business units (such as processors, storage, software, services, printers,) that could compete more effectively with competitors that were more focused and agile and had lower cost structures.[12] Gerstner reversed this plan, realizing from his previous experiences at RJR and American Express that there remained a vital need for a broad-based information technology integrator.[11] He discovered that the biggest problem that all major companies faced in 1993 was integrating all the separate computing technologies that were emerging at the time, and saw that IBM's unique competitive advantage was its ability to provide integrated solutions for customers"
Apple is the everything under one roof company. Johnson & Johnson mentioned in the acticle has always been a "family" of companies.
- zasdffaa 4y ago> with competitors that were more focused and agile and had lower cost structures so do economies of scale apply as a principle, or not?
- AdrianB1 4y agoThey do, it is the only reason very large companies survive: they live on economy of scale and die of corporate ice age (get large, bureaucratic, slow until freezing). Scale and inertia.
- guhidalg 4y agoFor manufacturing, yes. For corporate governance, nah.
- coredog64 4y agoThere’s also such a thing as diseconomies of scale. My inexpert opinion is that you have to work at enabling economies of scale and that it’s very easy to fall into patterns that turn into diseconomies.