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I was really impressed with your discussion and the valuable information you present here, particularly that concerning the complex implications of these trends for CEO's of major corporations.

Craig Maginness

A very insightful post with more than a little food for CEO thought. I'm particularly interested in the international aspects of the M&A trend -- where another paradox exists. I think that at least some of the international activity is driven by the apparent need to diversify internationally to smooth out business cycles and obviously gain exposure to faster growing markets, and sometimes acquiring an existing position can seem to be a bridge across the difficult waters of establishing a new position in an unfamiliar foreign market.

Unfortunately another reason that mergers often fail to realize their potential is the utter inability to reconcile conflicting cultures between the two merging entities. This problem, of course, can become greatly magnified when the divide is not merely between corporate cultures, but international cultures as well -- which is in part why, I suspect, so many international "mergers of equals" end in a management purge of one entity or the other.

Thanks again for the perspective.

Craig Maginness
ExIn Global Strategies

John T. Maloney

Hi --

Let's not forget M&A can be extremely lucrative for the CEO!

Nothing like taking the reins then looking for a method to achieve a monster personal cash windfall. The real Carleton Fiorina and mythical Gordon Gekko come to mind...

Also, the 'economies-of-scale' is a red herring. This foolish 'race-to-the-bottom' always fails with confidence, just like most M&As.

There is a new enterprise logic driving these dramatic developments. It has FAR more to do with *intangibles* like brand, than with scale.

Value network analysis (VNA) is the lens that elaborates the dynamic economic topology of the enterprise. VNA is the visualization of the all-important networks of intangibles. It's how to enjoy the 'law of increasing returns.'



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