Covid-19 Is Casting Conglomerates in a New Light
GE, Honeywell and other reinvented giants are finding some safety in corporate diversification.
The house that Jack built is smaller, but it still has a few wings.
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Over the years, “conglomerate” has become something of a dirty word in C-suites, especially in the U.S. industrial sector, where many a former giant has rushed to dismantle itself with breakup after breakup. Yet in times of stress, safety can be found in diversification. This was true in past crises, and it’s true again today as the coronavirus pandemic forces once-booming corners of the economy into a moment of reckoning and generates unexpected growth in others. Thanks to this unprecedented and lopsided disruption, the dogmatic pursuit of corporate simplicity is coming in for a rethink.