Bloomberg Businessweek

CONGLOMERATES DON’T WORK

The idea that a single company can manage many disparate businesses well is under assault. Ask GE

In September 1967 the cover of Time magazine featured a grinning portrait of industrialist Harold Geneen underneath a banner headline declaring, “CONGLOMERATES: The New Business Giants.” It seemed appropriate for the era. During the ’60s, Geneen had used hundreds of acquisitions to build International Telephone & Telegraph Corp. into a dizzying collection of businesses—everything from Wonder Bread to Sheraton Hotels & Resorts to timberland giant Rayonier Inc., one of the largest private landowners in the U.S. ITT’s constituent parts had little in common beyond their parent. But after being heralded as the cutting-edge model of American business, the giant shrank. Over the next few decades, a series of splits and sales whittled away most traces of ITT,

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