what is a conglomerate 
a conglomerate is a corporation of several different sometimes unrelated businesses in a conglomerate one company owns a controlling stake in several smaller companies conducting business separately and independently conglomerates often diversify business risk by participating in many different markets although some conglomerates such as those in mining elect to participate in a single sector industry economists however warn that large and far flung conglomerates can become inefficient and costly to maintain eroding value for shareholders understanding conglomeratesconglomerates are large parent companies made up of smaller independent entities that may operate across multiple industries each of a conglomerate s subsidiary businesses runs independently of the other business divisions but the subsidiaries managers report to the senior management of the parent company many conglomerates are thus multinational and multi industry corporations taking part in many different businesses can help a conglomerate company diversify the risks posed by being in a single market doing so may also help the parent lower total operating costs and require fewer resources however there are also times when such a company grows too large and loses efficiency to deal with this the conglomerate may divest this is known as the conglomerate curse of bigness there are many different types of more specialized conglomerates today ranging from manufacturing to media to food a media conglomerate may start out owning several newspapers then purchase television and radio stations and book publishing companies a food conglomerate may start by selling potato chips the company may decide to diversify buy a soda company and then expand by purchasing other companies that make different food products conglomeration is the term that describes the process by which a conglomerate is created when a parent company begins to acquire subsidiaries 