Speaker: Yuliya Snihur, TBS Business School
We investigate why CEOs of multi-business corporations decide to engage in a corporate split that spawns multiple independent, smaller, but more adaptive, entities. Through an in-depth examination of the dynamic forces that led CEO Meg Whitman to split HP, we propose that the company’s evolving business ecosystem led to the divergence of the consumer-oriented and enterprise-oriented business models in the corporate portfolio. We document the interplay between the inter-business model complementarity and intra-business model complexity, and how this vicious cycle, in combination with increasing capital market pressure, led to the CEO decision to split and her public justification for this momentous move. Our combined longitudinal interpretative and realist historical approach generates one of the first conceptual frameworks integrating insights from ecosystem and corporate divestiture literatures. Joint work with Robert Burgelman, Stanford, and Llewellyn Thomas, IESE.