The author Llewellyn D.W. Thomas is an associate professor of the Practice of Management of Information Systems at IESE. He holds a PhD from Imperial College Business School, an MBA (with Distinction) from Cass Business School, and an L.L.B. (Honours) and a B.A. (Honours) from the University of Sydney. Before academia, he founded several companies and was a management consultant specializing in competitive and operational strategy in financial services contexts.
More pressure to split
Looking back, now nearly seven years after the
carbon businesses embedded within large hydro-
split, both HPE and HPQ are doing very well for
carbon producers will become clearer.” As a pos-
their shareholders. The businesses are worth
itive example, he cites Italy’s Eni, which is going
more apart than they were together.
forward with plans first announced in 2020 to split off its renewables business.
Looking ahead, we expect to see more companies face intense pressures to divest some of their
With the increasing complexity and diversity of
businesses. The consumerization of IT, the ease
business models, we see CEOs having a harder
with which new businesses (and hence competi-
time deciding how to allocate corporate resources
tors) can be founded, platformization and cloud
to the different businesses and how best to drive
computing will be partly responsible. Ecosystems
corporate innovation and growth. It is vital that
will evolve, resulting in increasingly differentiated
they clearly understand the trajectory of their
business models for some companies.
business model portfolio and the focus and flexibility benefits of a corporate split. The analytical
The global drive to decarbonize the economy
framework described in this article can help CEOs
may be a considerable force, too. Recently, John
understand their business model portfolios and, if
Browne, the former CEO of BP who is now the
necessary, split from a position of strength.
chairman of General Atlantic’s BeyondNetZero climate investment initiative, called for Big Oil companies to separate their fossil fuel businesses from their low- and zero-carbon activities. He gave his reasoning in the Financial Times: With a corporate split, “investors can allocate their capital more efficiently and the true value of low-
read more: “Why multibusiness corporations split: CEO strategizing as the ecosystem evolves,” by Robert A. Burgelman, Yuliya Snihur and Llewellyn D.W. Thomas, is forthcoming in the Journal of Management. https://doi.org/10.1177/01492063211027623
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