Koç Group / Venturi Road for Institutionalization

"As seen in Figure, we adapted our “#Venturiroad of institutionalization”

model for Koç Group. On the right of Venturi

road, we sorted the important developments during stages

chronologically since group’s foundation."

For Koç Group, the most effective years of bottleneck on Venturi road are 1990s. In

early 90s, second generation was holding execution and board

chairman positions. The economic crisis in Turkey in April

1994 affected #KoçGroup as well. In 1996, the founder and

honorary president Vehbi Koç passed away. In 1999, like many

other businesses, Koç Group was also affected Turkey’s second

biggest earthquake disaster. Turkey joined the customs union

in 1996 with the treaty signed with European Union. Before

joining custom union all Turkish businesses have assessed the

possible effects of this treaty and taken measurements on their

own. Koç Group, also had in-house discussions about how to

compete with foreign brands entering domestic markets by

custom union, in terms of price and quality. In this stage, selling

the businesses not able to compete was brought to agenda.

By directing and taking the responsibility of cautious and

experienced managers, another solution was found instead

of selling. Before custom union, business’ R&D departments

were established to compete with foreign brands in early 90s.

The investments for R&D activities turned out in 2000s and

ensured group’s export volume to raise.

The end of confusion in Koç Group in terms of institutionalization and passing the bottle neck occurred in early 2000s. The last deficiencies in institutionalization and professionalisation were fixed especially by Mustafa Koç’s efforts.

Before assigned as board chairman, he got approval from

Rahmi Koç for getting support from an American family

business consultant and made studies. With the consultation,

he attended private courses about leadership and financing in

America. After assigned as board chairman, in an interview

about institutionalization in 2010 he said; “We would like as

much as possible professionals being charged, and to assign

best manager for most suitable position. Our aim is to keep

company value at the highest level. In that regard, we reached

the conclusion that when family members are involved, it becomes

difficult to do the best. If they (family members) want,

they can found their own businesses, but there is a consensus

for them not work in company.” The last family member within

the execution, third generation the younger brother Ali Koç

left his position in 2010. At that time Ali Koç quited the last

executive position “Head of Institutional Communication

and Information Group,” and just kept the board of management

membership. Remained institutionalization stages were

completed fester after that date.

As explained in this book, institutionalization, maturation and internationalization processes were completed for Koç Group when the last period of Mustafa Koç’s board chairman.

Namely, in a 90 years period between 1926 and 2016, institutionalization

has completed. Even this seems a long time, Koç

Group is a perfect example by being the biggest, oldest and

most global group which has completed its institutionalization

in Türkiye. Because there was no example business in Turkey

before them which was founded, institutionalized, matured

and internationalized. This example will be model for following

businesses and enable them to proceed this road faster.

After institutionalization and professionalisation was

completed by third generation, group’s #brands and #businesses

started production, sales and services in all continents worldwide.

Thus, Turkey’s oldest, biggest, institutional, mature and

international business, “Koç Holding” was born. In accordance

with the word of founder Vehbi Koç “Our most important

capital is our human resources,” the business successfully

trains talented and successful CEOs in-house. Thanks to successful

management of “Levent Çakıroğlu” assigned as #CEO

in 2015, group’s growth continues without any problem after

#MustafaKoç who passed away while in charge. Now, group

has passed venturi road of institutionalization and proceeds

on international wide highway.

#koçgroup #koçholding #confusedcompany #umurconsulting #şaşkınşirket