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  • In the aftermath of the collapse of the conglomerates a critique developed.

  • Not just of the conglomerate but all of the post-war corporations.

  • They were seen as too big, too bloated, too focused on nothing, in fact.

  • The lack of focus was their problem.

  • They needed to be retrenched back to their core competencies.

  • Now we think of this, most especially, with the rise

  • of something called the BCG or Boston Consulting Group growth matrix.

  • That gave us the term cash cow.

  • That is an old venerable part of a business

  • that produced cash but didn't grow that much.

  • What the BCG matrix told us was now, instead of putting that cash back

  • into the old business, we should find something new.

  • We should find something new in which to invest.

  • Something that would grow and produce more cash in the future.

  • And those parts of the company that produce no cash and no growth

  • should be cut off.

  • And so in this we see the carving up of these old companies,

  • whether it's LTV, which was just financial chicanery,

  • or companies like General Electric, one of the most important companies

  • in America and one of the largest employers in both the post-war

  • and through the 1990s.

  • General Electric had gone in whole hog with the conglomerate

  • craze of the 1960s.

  • And in the 1980s it began to think how can it become smaller.

  • Jack Welch, one of the most celebrated CEOs of the 1980s famously

  • said, "If we're not going to be one or two, we should be out."

  • And General Electric began to downsize all of its operations,

  • becoming a company that focused on just a few core areas.

  • Those few core areas, medical imaging technology,

  • very high expensive jet engines, and of course consumer finance.

  • And it's in this movement of the conglomerate

  • into this new, more narrowly defined corporation, the lean corporation,

  • the corporation that focused on just one little part of the supply chain, that

  • minimized inventories, that was flexible,

  • but did not try to bring everything into itself,

  • we see a new kind of corporation.

  • That's more market oriented, that does not

  • try to minimize risk or minimize exposure to the world.

  • In fact this lean corporation depends on suppliers.

  • Suppliers that can provide goods as needed through all those container

  • ships.

  • And it's in this lean corporation that we

  • see the origins of a new kind of labor regime,

  • of downsizing and flexible work, as well as a new kind of capital regime

  • that focused less on retained earnings and more about dispensing

  • all the profits back to shareholders.

  • This shareholder value then is part of how

  • we understand this new relationship of labor and capital after the 1970s.

In the aftermath of the collapse of the conglomerates a critique developed.

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The Lean Corporation

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    VoiceTube posted on 2016/07/07
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