Creating Value at a Conglomerate: The Case Of The Godrej Group

This discussion with the chairman of the Godrej Group, a well‐known India‐based conglomerate, begins by exploring the issue of diversification versus a single‐industry focus, particularly in developing countries. Mr. Godrej observes that the capital and managerial talent provided by a corporate parent can be invaluable resources in a developing economy, where such commodities are likely to be in relatively short supply. On the other hand, he notes, a conglomerate must have some underlying strategic rationale in order to create value, and a diversified company will work only “when each of its businesses is run with clear and focused accountability.”