The Role of Diversification


Corporate diversification is everywhere. Virtually all of the Fortune 1,000 (the largest 1,000 corporations in the US) are diversified, many of them to a great extent. Some corporations consist of dozen—even hundreds—of different businesses. Besides such corporate giants, many smaller firms, some with only a handful of employees, also diversify.

What is the strategic role of diversification? Popular answers to this question have changed dramatically over the last several decades. During the 1960s, diversification fueled tremendous corporate growth as corporations bought up dozens of businesses, regardless of the good or service sold. Managers based this diversification on unrelated businesses on the assumption that good managers could manage any business, allowing the formation of huge conglomerates of completely unrelated businesses. In the 1970s, managers began to emphasize diversification based on balancing cash flow between businesses. Corporate managers attempted to diversify so that the resulting portfolio would offer a balance between businesses that produced excess cash flows and those that needed additional cash flows beyond what they could produce themselves. The 1980s brought a broad-based effort to restructure corporations, as managers stripped out unrelated businesses and focused on a narrower range of operations. Restructuring usually also involved downsizing, and the largest corporations shrank in relation to the rest of the economy. In the 1990s, corporations have once again taken an interest in using diversification to grow. But unlike the unrelated diversification that took place in the 1960s, the trend in the 1990s is to diversify into related businesses, or at least into businesses in which the strengths of a popular managerial team fit the needs of the new business being added to the corporation.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Downsizing, Rightsizing


Indeed, organizations have been rapidly reducing the number of employees needed to operate effectively—a process known as downsizing. Typically this involves more than just laying off people in a move to save money. It is directed at adjusting the number of employees needed to work in newly designed organizations and is, therefore, also known as rightsizing. Whatever you call it, the bottom line is clear. Many organizations need fewer people to operate today than in the past—sometimes far fewer. The statistics tell a sobering tale. Downsizings are not a unique manifestation of current economic trends. In the recent past, some degree of downsizing has occurred in about half of all companies—especially in the middle management and supervisory ranks. Experts agree that rapid changes in technology have been largely responsible for much of this.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Hiring Happy Employees


With all the apptitudes, skills, and traits for which managers can test applicants, there is still one thing that’s usually not tested for but that perhaps should be—at least if some recent research findings are valid. Particularly in companies being rocked by downsizings and competitive pressures, there’s something to be said about hiring people who are inclined to remain happy even in the face of unhappy events.

Basically, happiness seems to be largely determined by the person’s genetic makeup—that, in other words, some people are simply born to somewhat happier than others. The theory, in nutshell, says that people have a sort of “set point” for happiness, a genetically determined happiness level to which the person quickly tends to gravitate, no matter what failures or successes he or she experiences. So confront a high-happiness-set-point person with the prospect of a demotion or an unattractive leteral transfer, and he or she will soon return to being relatively happy once the short blip of disappointment has dissipated. On the other hand, send an inherently low-set-point, unhappy person off on a two-week vacation or give him or her a sizable raise or a new computer, and chances are he or she will soon be as unhappy as before the reward.

Like testing employees for any traits, coming up with a set of tests or interview questions to identify happier, high-set-point people requires careful consideration and probably the help of a qualified psychologist. However, the following might provide some insight into the tendency to be relatively happy:

Indicate how strongly (high, medium, low) you agree with the following statements:

  • “When good things happen to me, it strongly affects me.”
  • “I will often do things for no other reason than they might be fun.”
  • “When I get something I want, I feel excited and energized.”
  • “When I am doing well at something, I love to keep at it.”

Agreeing with more statements and agreeing with them more strongly may correlate with a higher happiness-set-point.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Mismatched Aspiration


Intention is not in doubt. Acceptance of the need for transformation is almost universal. During the last decade downsizing, restructuring to fucus on core activities and reengineering became commonplace. Corporate organizations are now seeking to make the transition to more flexible, responsive and resilient networks embracing customers, suppliers and business partners that can create new opportunities and survive shocks. Gowever, companies are finding the translation of intention into reality intractible and elusive. Expectations have not been fulfilled, and intentions have been “blown off course” by the swirling winds of economic adversity.
My Consultancy–Asif J. Mir – Management Consultant–transformserorganizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact Asif J. Mir

Getting the Organization right


Getting the organization right is a concern held by many in this era of global restructuring. This is a very difficult time to work in, or to manage a corporation. Downsizings and restructurings have become widespread, but their purpose has usually been short-term chipping away at old structures and practices. Too few have been guided by a clear vision of what kind of new corporation needs to emerge from this turmoil and chaos.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact Asif J. Mir.