Conglomerate Integration

• What is meant by conglomerate integration?

  Refers to the process of merging or acquiring companies that operate in different industries or markets.

  This can involve integrating the operations, management, and culture of the newly acquired companies with those of the parent company.
• What does parent company mean?

  A company that has a controlling interest in another company, giving it control of its operations.
• What are the benefits of conglomerate integration?

  • Diversification - risk of loss lessons. If one business sector performs poorly, other, better performing business units can compensate for the losses.
  • An expanded customer base
  • Increased efficiency
• What are the drawbacks of conglomerate integration?

  • Different corporate cultures and operating practices in merging firms.
  • Lack of expertise in new industries
  • Risk of losing key employees and talent
  • Possible mergers with under-performing companies and missteps.
  • Need to improve or combine corporate governance practices and operations.
• What does misstep mean?


  A clumsy or badly judged step.