What big tech and buy-out barons have in common with GE
Unaccountable bosses, declining returns on capital and fed-up investors
Conglomerates could hardly be less fashionable. The diversified industrial empires of old are taught as case-studies in underperformance, misaligned management incentives and poor capital allocation. Bosses fear that a “conglomerate discount”—the difference between the market value of a firm and the hypothetical value of its constituent parts—will invite activist investors to agitate for divestments. Focus is now the idée fixe of industrial organisation.
This article appeared in the Business section of the print edition under the headline “The new conglomerates”
Business November 5th 2022
- What big tech and buy-out barons have in common with GE
- What went wrong with Snap, Netflix and Uber?
- Twitter wants to charge users based on purchasing-power parity
- Will people pay $8 a month for Twitter?
- Fosun’s big asset sale marks the end of an era in Chinese business
- How to think about gamification
- Olaf Scholz leads a blue-chip business delegation to China
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