Corporate Diversification Humor

9 September 2009 at 10:50 am Peter G. Klein 2 comments

| Peter Klein |

As someone who works in the corporate diversification area I enjoyed this Onion piece on Yamaha:

Despite concerns over the recent global recession, Yamaha Corporation president Mitsuru Umemura announced last week that he was content with the current level of production of Jet Skis, alto saxophones, snowmobiles, power generators, scooters, and golf carts. “Initially we thought that the declining global market would result in overproduction of synthesizers, PA systems, DVD players, tone generators, and motocross bikes, but in fact our production quotas were almost perfectly attuned to the market in power amplifiers, heart-rate monitors, signal processors, analog mixers, engine oil, microphones, HiFi systems, and grand pianos,” said Umemura, who stressed that his company prides itself on attention to detail. “At the Yamaha Corporation we’re focused on one thing and one thing alone — quality sound chips, ceiling brackets, editing software, race-kart engines, sport boats, flugelhorns, ATVs, sequencers, outboard motors, conference systems, golf clubs, projectors, MIDI controllers, lamp cartridges, portable recorders, subwoofers, component systems, and motorcycles.”

I remember while doing my dissertation research coming across a mid-1960s cartoon from Fortune or Business Week showing Santa’s elves whispering nervously as Santa meets with a slick-looking conglomerator in the background. One elf to another: “I think we’re becoming a division of Gulf & Western!” Robert Sobel also tells a story (I think in The Rise and Fall of the Conglomerate Kings) about the conglomerate CEO who specializes in acquisition by stock-swap. One day his son announces that he’s sold the family dog for $1,000. “You got cash for that old pooch?” “No, I traded him for two $500 cats.”

And there’s the great line from Fortune about Peter Grace, whose famous acquisition sprees transformed W. R. Grace from a mundane shipping company into “a purveyor of everything from bull semen to grilled cheese sandwiches.”

Entry filed under: - Klein -, Management Theory, Strategic Management.

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2 Comments Add your own

1. Lasse | 10 September 2009 at 4:14 am

LOL. I’ve also seen highly focused firms described as conglomerates. I.e. “the hotel industry conglomerate”, “the shoe conglomerate” etc. I guess it makes the firm sound bigger.
2. Andre Sammartino | 10 September 2009 at 7:03 pm

Perfectly timed. I’m teaching this stuff this week. Of course, we don’t need such mythical examples when there were firms in Australia like Pacific Dunlop, which once simultanoesuly operated in such “related” markets as tyres, frozen foods, medical devices, sporting goods, stationery, condoms and flooring!