Sumantra Ghoshal on Management: A Force for Good

Chapter 9. Diversification and diversifact

<authorgroup>Sumantra Ghoshal and Henry Mintzberg</authorgroup>

This paper provides an unusual metaphor – the spinning top – to examine the key elements that make up a successful diversified firm. Sumantra and renowned management theorist Henry Mintzberg argue that there are four components to a diversified firm – a set of well-performing businesses (the base of the spinning top), the energy and the vision of top management (the knob at the top), a set of planning systems (the middle part, which adds bulk), and a strong culture (a skin, to stop the parts spinning off in all directions). Of course every diversified firm is different in the way it manages each part, so a careful discussion of the key trade-offs ...