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Vivendi: Revitalizing a French Conglomerate(A)

 Vivendi: Stimulating a French ConglomerateA Essay

Business Summary

CGE experienced glaringly different leadership styles as Jean-Marie

Messier been successful Guy Dejouany. While Dejouany focused on vertically integrating

CGE and transforming the business into a conglomerate, Messier centered on

profitability and reorganization, rearrangement, reshuffling within the business. As Dejouany's leadership finished with

a funds crisis and corruption scandal, Messier's leadership led CGE's stock to an

admiration of 71. 8% within two years following succeeding Dejouany. The command

modify occurred at the right time. Dejouany looked at the top picture and maneuvered

CGE right into a vast and profitable conglomerate at its perfect, while Messier painted the

photo and enhanced CGE into Vivendi, focusing on shareholder value.

With the combination of Havas, Vivendi can either additional centralize and strengthen

the corporate workplace, or provide Havas autonomy. The better choice is to excercise the

corporate office which will lessen redundancies and free up funds. Vivendi offers different

options in expanding their three target areas of programs, communications, and construction

and property. Since utilities provide steady cash flow, they have to continue repairing

locally and little by little expand internationally. Vivendi must trust their particular projections of

developing operating income in communications and strongly expand, although contracting

construction and property to free up money for the communications growth, as well as

lowering you can actually debt to equity ratio. These steps is going to guide Vivendi to accomplishment

like its precursor CGE inside the 1980s.

I actually & 2. Problem statement/Key issues & Supporting discussion

The case discusses the difference in leadership designs and behavior

between your two Entrepreneurs of Vivendi, previously generally known as Compagnie Generale des Eaux

(CGE). Guy Dejouany, who was the CEO with the company via 1976 to 1995, offered a lot

of importance to personal human relationships, experiences, and was extremely involved in the

company's operations. During his last year at CGE in 1995, he supervised around 70

direct information.

We see a lot of vertical the usage happening in CGE during Guy's realm. The

company varied its businesses from resources, i. at the. water supervision and spend

treatment and strength, to property, transport, health care, telecom, and so forth Guy was

responsible for converting CGE into a conglomerate and decentralizing the business

with multiple subsidiaries. As a result of Guy's procedure of having faith in groups of persons,

their judgment with the market, as well as the inherent macroeconomic factors, CGE was extremely

lucrative in the 1970's. However in the 1980's, this suffered a massive loss of regarding 3. 6th

billion Frf. This was mainly the result of losses inside the real estate market which later led

CGE to divest from property companies.

In 1995, Jean-Marie Messier was brought in while the new CEO after Guy was

placed under investigation over a data corruption scandal. This was a major alter for the

firm as Messier was a new leader and he had a very different functioning style from

regarding Guy. Messier had clear vision for the company and was keen to put into action new

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changes for the company's earnings. Instead of going pertaining to bigger volumes of prints, he desired

to focus on profitability. Having been also accountable for a new name, Vivendi, and a lot of

reorganization, rearrangement, reshuffling within the business in line with the brand new image.

Apart from diversity, expansion of cross-shareholdings was obviously a big issue pertaining to

CGE. Large The french language companies possessed 24. 3% of the voting rights by simply holding just 18. 3%

of the company share in late 1998. This huge percentage of voting privileges in handful of hands

had a big impact on the control in the board of directors' level.

In the nineties the company faced a funds shortage as a result of effects of the top

capital diversification expenditures of the eighties. CGE's personal debt level improved and...

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