Systems thinking in corporate development strategy: The case of Armco Latin American Division

In this paper we examine the role of top management in relation to the diversified operations of a company and the meaning of “strategic planning” for these entities. We briefly examine two general approaches to generation of growth: conglomeration (portfolio management) and synergistic growth. We argue that the second is preferable. We then challenge the universally popluar notion that growth is the appropriate objective for a business entity. We propose the concept of “development” as a better alternative. We offer the case of Armco's Latin American Division (known as ALAD) as an illustration of the kind of thinking that emerges when development is taken as the corporate objective. We present a five-phase strategy that combines the notions of synergistic growth and corporate development in a systemic framework.