Conglomerate

Conglomerate

14 January 2025

A conglomerate is a large company made up of multiple businesses with very diverse activities, often in completely unrelated sectors. Organizationally, it fits what Henry Mintzberg describes as the divisional structure: relatively autonomous units under one central holding.

Recently, citizens of Curaçao learned that Aqualectra is now also managing public transport, the ABC Bus Company. This means Aqualectra is no longer responsible only for water, electricity, and internet, but also for public transport. As far as is known, this is the extent of its expansion.

This is not a unique phenomenon. The now-sold TDS also once had a “Christmas tree” of subsidiaries. That experiment ultimately did not succeed. There are undoubtedly more examples.

In a small society, it is understandable that one might be tempted to adopt such structures. Management and governance talent is scarce, and potential economies of scale seem attractive. Yet this is often too pragmatic a reasoning.

In the case of utilities and public transport, we are dealing with two vital public services that each require specialized knowledge and undivided managerial attention. This is especially true if the bus company finally moves toward electric buses, which adds further complexity.

All involved organizations have faced significant challenges in recent years — and for much longer. While there appears to be some stabilization, the growth of tourism and the resulting pressure on infrastructure remain a constant challenge.

What is particularly worrying is that this decision has hardly raised any questions. There has been no visible public debate, and even among the Board of Supervisors, the shareholder (Government of Curaçao), the Parliament, and the media, it remains noticeably silent.

That is not healthy.

Let’s talk about this.

Miguel Goede