One of the most important trends in corporate governance and business strategy in the last decade has been the feverish drive toward conglomeration. Banking, telecom, heavy industry, energy, pharmaceuticals, and funeral homes have been on the path of combining into ever large corporate entities. This has a broad reaching impact for everybody – workers, other companies, governments, and the investors who provide public capital.
There’s a fascinating piece from CNBC, which features some insight from Reformed Broker’s Josh Brown. It seems that for years, the business media has accepted that giantness is always a great strategic move. Here, there is some real discussion (!) about whether it makes sense to have a single corporate culture attempting to compete intelligently in a broad variety of businesses.
Brown’s point is cogent – sometimes conglomeration a good idea (Berkshire Hathaway) and sometimes…it’s just a whole lot of people with the same letterhead.