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Growth of the Multidivisional Corporation: The Genstar Case
Published online by Cambridge University Press: 11 June 2012
Abstract
Genstar Ltd. of Canada provides a superb case study of the relationship between the strategy a corporation chooses to pursue and the organizational form which it adopts. Genstar had originally operated as a holding company. But its managers came to understand that the advantages that form provided were outweighed by the problems it posed given both the general goals of Genstar's parent, the Société Générale de Belgique, and the particular opportunities and obstacles presented by the Canadian business environment since World War II. The result was the adoption of the multidivisional form.
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- Copyright © The President and Fellows of Harvard College 1982
References
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23 See organizational chart in Appendices 1–3.
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55 Abbey Glen was a large diversified real estate company that owned large tracts of land for development (18,000 acres) and income producing property. The income properties represented slightly more than half of the company's assets and were appraised (in 1976) at a value of $202 million. The land holdings had a book value of $145 million and were located for 53 per cent of the acreage in Alberta, for 19 per cent in Ontario and a third and fourth largest block in New Jersey and in Miani. In July 1976 Genstar purchased 55.9 per cent of the company from Capital and Countries Property Corp. of London, England, for $49.5 million. The rest was acquired later.
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58 I.e. Global Transport Organization, in which Genstar was a one third partner had contracts to supply port lighterage and heavy lift services for oil projects in Saudi Arabia. GTO with Agence Maritime S.A., a SGB subsidiary, formed EAST (Euro-Arab Sea Trailer Line S.A.) between Marseilles and Red Sea Port of Yanbu. Its speciality was tri-level roll-on roll-off barges. Complementarity is found here too; GTO specialized in transport of heavy construction materials.
59 In 1978.
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63 See Appendix 4, for a typology of the corporate investment strategies.