Vivendi (a) Revitalizing a French Conglomerate - 3072 Words

MAPPING THE BUSINESS LANDSCAPE General Environment: For CGE, the 1980s were a period of unprecedented opportunity in France in which it could make the great leap forward. The French economy as a whole was growing rapidly and the hopes of an expanded market with the European Community were attractive opportunities for the firm. In CGE, one form of diversification was cross shareholdings. The origin of this cross-shareholdings can be traced to the period 1986-1988 during a time of cohabitation in French government between a social president, Francois Mitterand, and a more conservative Prime Minister, Jacques Chirac. Afraid of the inability of the French weak capital markets to absorb large quantity of shares domestically and†¦show more content†¦In 1984-85, several highly talented engineers were hired away from France Telecom, the government owned monopoly. CGE s construction subsidiary, purchased for the apparent synergy of a similar customer base, was bought as a poison pill after St. Gobain, the French glass and material company, attempted to take over CGE in 1981. When new CEO, Jean-Marrie Messier took over the charge of the company, he started managing the company in his own way. Central to Messier s new operating principles was that CGE must return to its core activities. Looking forward, his plan was to reduce the importance of Construction and Property while building the role of communications. Complete divestment from real estate had been eliminated as an option in the near term because Messier believed that the market would not allow a quick liquidation of these assets. Messier created alliances with cash rich partners to supplement CGE s resources in fast growth areas with high capital requirements. Structure: Structure of the firm was quite different in the period of two different CEOs. Both Dejouany and Messier had different way of managing the company with different level of experience and understandings. In the tenure of Dejouany, number of employees grew significantly with the growth of the company. By 1995, number directly reporting to him was 70. He diversified the whole business into real estate development, healthcare, transportation, andShow MoreRelatedVivendi: Revitalizing a French Conglomerate Essay617 Words   |  3 PagesDuring the 1980s the French economy expanded assimilating rapidly the scarce existing venture capital from the week capital market. As a company with a healthy cash flow, Compagnie Gà ©nà ©rale des Eaux (CGE) took advantage of economic circumstances and pursued a strong expansion strategy entering different business realms like real estate, healthcare, or telecommunication. Although this strategy worked well with the current economical conditions, the absence of an adequate organizational structureRead MoreVivendi: Revitalizing a French Conglomerate(A) Essay1910 Words   |  8 Pagesand transforming the company into a conglomerate, Messier focused on profitability and restructuring within the company. As Dejouany’s leadership ended with a cash crisis and corruption scandal, Messier’s leadership led CGE’s stock to an appreciation of 71.8% within two years after succeeding Dejouany. The leadership change occurred at the right time. Dejouany looked at the big picture and maneuvered CGE into a vast and profitable conglomerate at its prime, while Messier paintedRead MoreManagement Course: Mba−10 General Management215330 Words   |  862 PagesJones−George: Contemporary Management, Fourth Edition I. Management 2. The Evolution of Management Thought  © The McGraw−Hill Companies, 2005 27 50 Chapter Two German professor of sociology, developed one theory; Henri Fayol, the French manager who developed the model of management introduced in Chapter 1, developed the other. The Theory of Bureaucracy bureaucracy A formal system of organization and administration designed to ensure efï ¬ ciency and effectiveness. Max Weber (1864–1920)