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ConglomeratesOperating vs. Holding Companies BA 469 Professor Dowling Spring Term, 2005
OPERATING COMPANIES Understand businesses acquired ‘Fit’ is key to acquisitions Emphasize behavioral control HOLDING COMPANIES Focus on asset utilization/financial health Opportunity driven; portfolio fit Outcome measures key to managerial evaluation (Berkshire Hathaway) 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 Conglomerates