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> This is very different from how most wealthy countries operate. American firms, for example, tend to prioritize focus above all else It hasn't always been li
by stymaar 5mo ago
> This is very different from how most wealthy countries operate. American firms, for example, tend to prioritize focus above all else
It hasn't always been like that. Western companies, including US companies, used to have lots of diversification as well (maybe not as much as the Japanese, but much more than today's companies still: not that long ago a company like IBM used to make mouses and keyboards, in addition to their photocopier, mainframe, software, and personal computer business. They even made a hydrogen peroxide analyzer in 1982![1]). They did so because it makes the company more resilient, and because in that time their shareholders wanted the companies they invested in to be resilient, to have a reasonable yield/risk profile.
Things changed in the 80s, when deregulation generate a boom in financial products. Then, individual company resilience was seen as obsolete, you'd cover your risk through portfolio diversification and all you'd want from a company was the pure yield, and companies were streamlined to make as much profit as possible, everything reducing the ratio being sold or terminated.
Fast forward 40 years, people believe it has always been like that and it must be so kind of deep cultural difference between Asia and the West.
[1]: https://web.archive.org/web/20050119055353/http://www-03.ibm.com/ibm/history/exhibits/specialprod2/specialprod2_4.html https://web.archive.org/web/20050119055353/http://www-03.ibm...
- Cthulhu_ 5mo agoFunny you mention IBM given that it still has its fingers in many porridges (to butcher an expression), maybe not computer peripherals but it's still a very broad company.
- stymaar 5mo agoI mentioned IBM because my in-laws used to work there, and they both ended up out of the company because of two waves of "let's focus on our core business" restructuring.
- danmaz74 5mo agoCorrect, and specifically, it was the total focus on "shareholder value" which caused this, as most often splitting the company and selling its parts brought more immediate value to shareholders. If that also brings more long-term value could be more difficult to assess.
- 205guy 5mo agoAnother example is the Honeywell corporation: from thermostats to computers, then parts of defense/aerospace. Looking at its wikipedia, it also seems like one factor of diversification was the WWII war economy where the government paid lots of different corporations to build new stuff: https://en.wikipedia.org/wiki/Honeywell https://en.wikipedia.org/wiki/Honeywell
- thelastgallon 5mo agoApple and Microsoft make keyboards and mouses. Both trillion dollar companies.
- krupan 5mo agoTrue. I started my career at HP when it was being changed from a company where you spent your entire career and worked on lots of different things to a more "modern" and "focused" company. It was a sad transition to watch. This article brought back a lot of memories