Asd Das Tewrter

The organization is a place to enable that coordination to work. To get

those resources into the businesses, you have a control structure in place to

manage multiple businesses. So those are the critical junctures in corporate

strategy. Just like business strategy is a system, there has to be a vision in the center of the wheel, there has to be internal consistency, and

there has to be external consistency.The corporate strategy because we used to think about it primarily as a financial portfolio. Think about someone who is a

portfolio manager at a place like Fidelity or Merrill Lynch, and they have a bunch of assets in their portfolio. All they can do is buy and sell. And if that was our model for corporate strategy, that’s not very encouraging because what it’s saying is that you can buy businesses, you can sell them. The corporate strategy has to do with businesses better; being a good corporate parent to those businesses. That’s what makes the whole more than the sum of the parts. The only level that the portfolio manager of fidelity has is risk reduction. And the only way they can increase return is by buying and selling—holding, buying, and selling. They can’t impact the actions of those firms. We know that you’ve been doing in the course so far about competitive advantage and business strategy and the analysis. You can’t ever forget those things, because corporate strategy just works with those parts. Those are realities, those are givens that we have to work. The whole reason for a corporate strategy is it makes you more effective, business by business.

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