Cooper Industries’ Corporate Strategy
The vision of Cooper Industries, as stated in the case, was to do an ‘outstanding job at the unglamorous part by making necessary products of exceptional quality.’ The goal was to operate in industries that had become somewhat of a necessity for consumers. Examples of such industries include: power transmission, hand tools, drilling and others. Cooper industries had started in 1833, as an iron foundry, and had existed most of its 150 years as a small sized maker of engines and compressors. However, all this changed in the 1960s, when the management decided to expand the company to lessen its dependence on the capital expenditures of the cyclical natural gas business. Company Mission
Starting from the late 1950’s Cooper began a process of diversification in order to assure continued sustainability as a profitable company. As a multi-business, Cooper Industries’ sole objective must be “to achieve higher financial performance than its units would attain if they were independent.” By extension, the goal was to grow Cooper industries as a corporation through diversification in order to operate in a wider range of product markets. The key to achieving this goal was acquisition of other firms. In addition, to acquisitions Cooper’s basic corporate growth objective was to increase pre-tax earnings per share at a compound rate of 11% and improve the quality of earnings by adding stability. Corporate Strategy and Implementation
Cooper’s corporate policy was centralized, but day-to-day operating decisions were delegated to the operating units. Cooper’s reliance on centrally located and systematic functions provided great benefit for the one time independent firms acquired through Cooper’s diversification actions. This is demonstrated through the “Cooperization” process in which these firms are developed into profitable, competitive businesses. Moreover, Cooper’s corporate policies assisted the...
Please join StudyMode to read the full document