Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Fable: The Failure Of Rationalisation
There was once a massive industrial conglomerate involved in everything from automobiles to aerospace which, one day, woke up to the fact that it owned half a dozen different semiconductor companies.
Wouldn’t it be a great idea, thought some bright spark manager, if we amalgamated all these operations into one big company?
To big company people, the idea of one big company was preferable to the idea of a lot of small companies.
But the amalgamation was, of course, contrary to the dynamics of the semiconductor industry which favours small, entrepreneurial, fast-moving units.
The big company went ahead with the amalgamation and proudly presented to the world a new top ten semiconductor company with over $1 billion of sales.
It all fell apart quite quickly.
Moral: The same rules don’t apply to everyone.Tags: amalgamation, contrary, industrial conglomerate, rationalisation, semiconductor company