Designing Organizations: Strategy, Structure, and Process at the Business Unit and Enterprise Levels, 3rd Edition

Chapter 12

Synergy Portfolio Strategies

Companies with diverse portfolios (mixed and conglomerate models) historically managed each business as a stand-alone entity. In chapter 11, we looked at the Illinois Tool Works approach to improving an acquired business by applying the 80/20 process to every business. Some conglomerates today, like United Technologies, operate by managing and improving each business unit on a stand-alone basis. However, there are a couple of portfolio models that explicitly pursue synergies among their diverse businesses. One model is the leveraging of intellectual property model, which works by leveraging intellectual property across all the businesses. Disney is the prime example. The other is the solutions model of ...