Page 189 - (DK) The Business Book

Working With a viSion 187

See also: The Greiner curve 58–61 ■ Organizing teams and talent 80–85 ■
Organizational culture 104–09 ■ Protect the core business 170–71

Company A
Company A Company B
makes widgets agrees to buy makes widgets
and sells them in Company B. The and sells them in
legal processes
the north. the south.
are completed.

Harold Geneen

Company A has Company B has Harold Geneen was born in
New company
a formal, “AB” is formed an informal, Dorset, UK, in 1910, but his
hierarchical from two democratic parents emigrated soon after
culture with culture where his birth and he was raised
highly defined companies with staff forms teams in the US. He studied
mismatching
roles and levels of cultures. to match skills accounting at NYU (New York
management. to projects. University) and went on to
become a highly successful
businessman in the US. He
is best known as the father
of the conglomerate concept,
the new company does not deliver synergy. where a large corporation is
takeovers disappoint. created from seemingly
unrelated businesses. In 1959
he became president and CEO
of International Telephone and
problems might be discovered after motor markets. The new company, Telegraph Corporation (ITT),
the deal is done because of the DaimlerChrysler, was dubbed a and grew the company from
limitations on sharing commercially “merger of equals.” But the reality a medium-sized business to a
multinational conglomerate.
sensitive information prior to was a classic culture clash. Daimler His 18-year tenure included
common ownership. The focus at was a formal, hierarchical 350 acquisitions and mergers
the time of the deal is often on the organization, while Chrysler favored in more than 80 different
event of joining together rather than a more team-oriented approach. countries, including Sheraton
planning what will happen next. Chrysler operated in a market Hotels in the US, and
effective integration requires quick, where low price and catchy design telecommunications
courageous decision making so that were important; high-end Daimler companies in Europe and
time and momentum are not lost. was focused on quality and luxury. Brazil. Despite his success and
However, the most common Chrysler executives felt wealth, he was known for his
reason for failure is that the two undermined in the new alliance no-nonsense values and plain
organizations have different because Daimler tried to dictate talking. He died in 1997.
approaches and lack synergy. the terms on which the new
In 1998, German car producer business should work and to place Key works
Daimler-Benz bought us its people in key positions. The 1997 The Synergy Myth
automotive business Chrysler for result was a costly corporate (with Brent Bowers)
$38 billion. The logic seemed divorce with Daimler-Benz selling 1999 Synergy and Other Lies
obvious: create a trans-Atlantic Chrysler to a private-equity firm for (with Brent Bowers)
powerhouse that would dominate a mere $7 billion in 2007. ■