
Downscoping
How to Tame the Diversified Firm
Oxford University Press Inc
Published on 16. March 1995
Book
Hardback
224 pages
978-0-19-507843-5 (ISBN)
Description
Large, diversified firms face unique challenges as they compete worldwide, and corporate restructuring is one way multinationals strive for competitive advantage. Weighing the pros and cons of a variety of approaches to restructuring, Downscoping offers executives a clear, strategic path through the maze.
The authors show that when a multinational conglomerate fails to compete effectively, too much diversification may be the culprit. Whether the result of weak corporate governance or poor corporate strategy, over-diversification can make managers, unfamiliar with some of the markets in which they compete, opt for safety over innovation. This risk-aversion and lack of long-range commitment to innovation lead inevitably to stagnation over the longer term.
The answer is not downsizing--closing offices and laying off personnel--but downscoping: a strategic approach to restructuring. The options include incentive and compensation adjustments for executives, leveraged buy-outs and capital structure changes, focusing on core skills, diversifying internationally while focusing on businesses in which a firm has strong competencies, and buying and selling mature businesses where product development is not a great concern. Regardless of the approach, executives must exercise strategic leadership during and after restructuring, including providing strategic direction, exploiting core competencies, deeloping human capital and sustaining the corporate culture.
Based on systematic research rather than casual observation, Downscoping provides a strong description of restructuring alternatives and their resulting tradeoffs. Its specific guidelines for maintaining competitiveness will be essential reading for managers involved in corporate restructuring.
The authors show that when a multinational conglomerate fails to compete effectively, too much diversification may be the culprit. Whether the result of weak corporate governance or poor corporate strategy, over-diversification can make managers, unfamiliar with some of the markets in which they compete, opt for safety over innovation. This risk-aversion and lack of long-range commitment to innovation lead inevitably to stagnation over the longer term.
The answer is not downsizing--closing offices and laying off personnel--but downscoping: a strategic approach to restructuring. The options include incentive and compensation adjustments for executives, leveraged buy-outs and capital structure changes, focusing on core skills, diversifying internationally while focusing on businesses in which a firm has strong competencies, and buying and selling mature businesses where product development is not a great concern. Regardless of the approach, executives must exercise strategic leadership during and after restructuring, including providing strategic direction, exploiting core competencies, deeloping human capital and sustaining the corporate culture.
Based on systematic research rather than casual observation, Downscoping provides a strong description of restructuring alternatives and their resulting tradeoffs. Its specific guidelines for maintaining competitiveness will be essential reading for managers involved in corporate restructuring.
Reviews / Votes
A solid contribution...this book can provide both valuable reading and reference materials for a broad audience of researchers and practitioners concerned with the more effective management of diversified firms. * Academy of Management Review *More details
Language
English
Place of publication
New York
United States
Target group
Professional and scholarly
Illustrations
line figures
Dimensions
Height: 235 mm
Width: 157 mm
Thickness: 18 mm
Weight
521 gr
ISBN-13
978-0-19-507843-5 (9780195078435)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Other editions
Additional editions

E-Book
09/1994
1st Edition
OUP eBook
€44.49
Available for download
Persons
Robert E. Hoskisson is Associate Professor of Management at Texas A&M University. Michael A. Hitt holds the Paul M. and Rosalie Robertson Chair in Business Administration at Texas A&M University.
Author
Associate Professor of ManagementAssociate Professor of Management, Texas A & M University
Barlow Professor of BusinessBarlow Professor of Business, Texas A & M University
Content
I. Problems of Competitiveness
1: Diversification, Multidivisional Structure, and Restructuring
2: Strategic Control and M-form Implementation
3: Corporate Governance and Diversification
4: Acquisition Strategies and Innovation
5: Corporate Refocusing and Global Strategic Competitiveness
II. Restructuring Solutions
6: Restructuring Managerial Incentives
7: Leveraged Buyouts and Debt as a Restructuring Alternative
8: Downscoping
9: Restructuring and the Unrelated Strategy
10: International Diversification
11: Implementing Restructuring and Exercising Strategic Leadership
12: Learning from the Past and Looking to the Future
Indexes
1: Diversification, Multidivisional Structure, and Restructuring
2: Strategic Control and M-form Implementation
3: Corporate Governance and Diversification
4: Acquisition Strategies and Innovation
5: Corporate Refocusing and Global Strategic Competitiveness
II. Restructuring Solutions
6: Restructuring Managerial Incentives
7: Leveraged Buyouts and Debt as a Restructuring Alternative
8: Downscoping
9: Restructuring and the Unrelated Strategy
10: International Diversification
11: Implementing Restructuring and Exercising Strategic Leadership
12: Learning from the Past and Looking to the Future
Indexes