1. Conglomerates Operating vs. Holding Companies BA 469 Prof. Dowling Spring Term, 2007

2. Conglomerates n OPERATING COMPANIES –Understand businesses acquired –‘Fit’ is key to acquisitions –Emphasize behavioral control n HOLDING COMPANIES –Focus on asset utilization/financial health –Opportunity driven; portfolio fit –Outcome measures key to managerial evaluation (Berkshire Hathaway)

3. Conglomerates –Senior management team serves as a key resource to division managers on operating & strategy questions –Consistent operating strategy »Goal = synergy of operations/products –Long term rebuild strategy for acquisitions; turn around fundamentals –Focus on profit contribution, EBIT, debt/equity –Corporate strategy related to portfolio mix –Quick fix »i.e. management changes and downsizing