Vivendi: Revitalizing a French Conglomerate(A) Essay

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Executive Summary CGE experienced glaringly different leadership styles as Jean-Marie Messier succeeded Guy Dejouany. While Dejouany focused on vertically integrating CGE and transforming the company into a conglomerate, Messier focused on profitability and restructuring within the company. As Dejouany’s leadership ended with a cash crisis and corruption scandal, Messier’s leadership led CGE’s stock to an appreciation of 71.8% within two years after succeeding Dejouany. The leadership change occurred at the right time. Dejouany looked at the big picture and maneuvered CGE into a vast and profitable conglomerate at its prime, while Messier painted the picture and refined CGE into Vivendi, focusing on…show more content…
The company started an incentive system in 1997, under which the pay of the managers of the 8 major business units was linked to their respective return on investment targets. By the end of 1997, due to Messier being at the head of the company, the stock price had an appreciation of about 71.8% which lead to a high shareholder value. III. Alternative strategies Upon studying the key issues and the corresponding supporting arguments, we have come up with a few recommendations as to how Vivendi should proceed. Page 2 of 8 One option is to strengthen its corporate office by means of centralizing through the merger with Havas. Vivendi can centralize the various different departments from the merger with its own departments already in place, thereby reducing staff redundancy and increasing the sharing of firm knowledge. Once staff redundancy is reduced, cash flows will be freed up to be injected into more profitable areas. Vivendi would need to forgo letting Havas operate autonomously when following this strategy. If Havas operated autonomously, it could continue in much the same way that brought its success in the communications segment thus far. Instead of integrating Havas, it could be given autonomy and be separate from the central organization. This would allow the resources from Havas to have a sense of boundaries, thereby retaining the

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