Recommended by: WiseSuit Staff

"Investors discount conglomerates 30 percent because they believe there is some kind of poison in the system.  And the medicine to cure it is to break the things up."

This book offers a spirited approach to the business phenomenon of the break-up of conglomerates.  It successfully argues that the need for large entities is not fiscally prudent, and that the break-up is the most valuable business tool to make them profitable again.

Corporate break-up is attracting business press more and more while making executives around the world fear for their positions. This phenomenon is studied, and explores its far-reaching effects for shareholders, managers, employees, investors and customers.

Over the decades, several of the most recognizable companies in the United States have all elected to be broken up: ITT, Grace, Marrion, AT&T, 3M, Baxter, Tenneco, Anheuser Busch, Ralston Purina, General Motors, Corning, Dial, and Dun & Bradstreet.

There is a push to release the almost one trillion dollars worth of value which is currently locked up in unwieldy, unfocused and poorly managed corporations. The authors of this hard-hitting book explain with certainty this occurrence and its effect on the global financial markets.

The result of this is the spin-off company. By carefully spinning off companies and divisions, these corporations can morph themselves into lean, focused, and incredibly more profitable organizations. The smaller divisions, changed into stand-alone businesses, also benefit. They are freed from corporate headquarters which have no expertise in their core businesses, so they begin to grow and profit on their own.

This book uses extensive research and interviews with executives in order to analyze the spin-off occurrence while instructing business people on what they need to know to get in on the up-side of the change. Whether managing their careers, planning strategy for their companies, or looking for investment opportunities, the advice found here will apply to a diverse group of readers.  All the angles are covered: details on what market forces drive breakups, how they create intrinsic value, who should break up, how to profit from a breakup, and how to end up with a better job should your company break up.

Finally, a special feature included is an analysis of the Fortune 100, revealing which companies stand to gain the most from a breakup, and a list of tips, drawn from interviews, for leading your company through a successful breakup.

Reviews:

 "At last! A wonderfully written book that clearly describes the value that can be created for shareholders by fixing the mistakes of the past. I highly recommend it to anyone involved with corporate-level strategy." Mark L. Sirower Strategic Management Professor, Stern School of Business, New York University, and the author of The Synergy Trap.

About the Author:

Andrew Campbell is the Director of the Ashridge Strategic Management Center in London.

Categories:  Leadership ,  Corporate Finance,  Personal Finance