Chapter 4 Danger Signal : A Market Outside Of Their Area Of Expertise

1692 Words Apr 8th, 2016 7 Pages
I.) Chapter 4 Danger Signal: A company enters a market outside of their area of expertise. The company purchases other companies and merges with them with hopes that it will be successful.
II.) The leadership principle violated is spending billions of dollars on mergers and expecting the purchase to create a skilled knowledge of the new company.
III.) The people responsible for purchasing the company (CEO, COO, CFO, board of directors) are responsible for creating and executing a plan of action.
IV.) The plan will be to evaluate the pros and cons of the business acquisition prior to accepting or declining the merger. Using the Hedgehog Concept, the owner will see he is acting as a “fox” and pursuing multiple ends at the same time, while seeing the larger picture in creating a conglomerate (GTG, pp. 91). The goal is for all executives to evaluate the major decision based on the Hedgehog Concept. Rather than blindly dabbling into a new industry, the company will eventually realize that focusing on one area and becoming great at it will be the smart decision long-term. We will essentially condense all areas of this complex situation and summarize it into one vision. In order to avoid a future collapse and failure of the new company, they will realize the risk is too high. Also, if the company decides the merger is suitable, then the most qualified individuals will be placed in command of the company’s daily operations.
V.) The people responsible for evaluating and…

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