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rapidly and profitably but the management were perceived to be skilful as well, which facilitated the diversity in acquisitions and operations of the companies (see Judelson, 1969). For instance, Geneen (1984) documented that during this wave ITT built itself into a highly diversified conglomerate by acquiring various businesses such as insurance, food and car rentals. Moreover, he found that executives of the company used the advanced financial tools like detailed budgeting and tight financial controls to make these acquisitions successful and well-functioning. Following figure presents the overview of the activities during the period:

Scholars like Goold and Luchs (1993) argued that general management skills were one of the vital factors in successful acquisitions and mergers during this era, which also helped corporations to diversify in different businesses. Moreover, engaging in unrelated business by many companies was based on the assumptions that different businesses would not require dissimilar managerial skills (see Goold and Luchs, 1993).

However, in late 1960s companies start facing performance problems and the share price of these conglomerates such as Textron fell almost 50% comparative to 9% drop in Dow Jones Industrial average (see Bonge and Coleman, 1972). Furthermore, in early 1970's companies began to experience profitless growth like General Electric sales increased by 40% from 1965 to 1970 but its profit actually dropped (see Goold and Quinn, 1990).

According to Gaughan (1999), the era has been ended when ITT spin off in three different companies. It is perceived that most of the mergers during the period failed and companies jettisoned their under-performing and unrelated business to face the competitive environment (see Sikora, 1995). In addition, Sadlter et al (1997) observed that the combined value of businesses separated from their parent firms significantly increased to more than $100 billion in 1996 comparative to 1993 figure of $17.5 billion.

Acquisitions in the 1970s:

The merger and acquisition activities decreased significantly in 1970s, which can be seen in the following figure.

As a consequence of problem in merger and acquisitions activities experienced by conglomerates, the senior executives realised that only general management skills are not sufficient for a successful transactions (see Chandler, 1962). Therefore, they focused their attentions toward the long term company's objectives instead of operating of strategic business units (see Christensen, 1965).

Andrews (1971) highlighted that this change introduced the concept of corporate strategy for firms and most CEO's of the organizations started accepting that strategy is their unique and primary task. However, corporate strategy poses some practical problem and did not help executives in deciding about allocation of resources among businesses especially when each investment proposal has a different strategy (see Goold and Luchs, 1993). Moreover, Bower (1970) argued that investment decision should be part of overall business strategy rather than prevaricate on project 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。