Discuss the shift away from the conglomerate form in the advanced industrial countries, and its persistence in most emerging markets performance?
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5 word format
document in English
economics
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published 20/04/2007
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level : Expert
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SummaryWestern business strategies are often held as models for emerging countries. Despite General Electric being the largest worldwide conglomerate, such success stories have become rather rare nowadays in the United States and Europe, although this is not true in Japan for cultural and historical reasons. For this reason, the dismantling of most conglomerates from the developed countries is for many a path to follow in the emerging markets. This belief was reinforced by the financial crisis in Asia and Latin American as multi-lateral financial institutions and consultants pressed for a closer convergence between first and third-world business models, to improve efficiency and productivity. The inefficiency resulting from the family-controlled enterprise model is another arguments used by proponents of this convergence.
Due to the word limit, this paper only aims at presenting the differences between developing and developed countries which could explain why conglomerates have disappeared from the former and are still persistent in the latter. Firstly, the very notion of Conglomerate and its characteristics will be analysed with the support of the literature review. In a second part, the paper will analyse the shift away from the conglomerate form in the industrialised countries, studying the case of the ITT Corporation, a conglomerate that is now only a shell of its past glory. Finally, the paper will evaluate the reasons that maintain into existence in the developing countries, based on an analysis of the Tata group.
Due to the word limit, this paper only aims at presenting the differences between developing and developed countries which could explain why conglomerates have disappeared from the former and are still persistent in the latter. Firstly, the very notion of Conglomerate and its characteristics will be analysed with the support of the literature review. In a second part, the paper will analyse the shift away from the conglomerate form in the industrialised countries, studying the case of the ITT Corporation, a conglomerate that is now only a shell of its past glory. Finally, the paper will evaluate the reasons that maintain into existence in the developing countries, based on an analysis of the Tata group.
Table of Contents
- What is a conglomerate?
- From diversified to focus firms in industrial countries
- Persistence in most emerging markets
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