Benefits of Conglomerates For the management team
Post# of 86930
(Total Views: 306)
Posted On: 05/25/2019 4:43:38 PM
Benefits of Conglomerates
For the management team of a conglomerate, having a wide array of companies in different industries can be a real boon for their bottom line. Poorly performing companies or industries can be offset by other sectors. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources, and by diversifying business interests, the risks inherent in operating in a single market are mitigated.
In addition, companies owned by conglomerates have access to internal capital markets, enabling more ability to grow as a company. A conglomerate can allocate capital for one of their companies if external capital markets aren’t offering as kind terms the company wants.
For the management team of a conglomerate, having a wide array of companies in different industries can be a real boon for their bottom line. Poorly performing companies or industries can be offset by other sectors. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources, and by diversifying business interests, the risks inherent in operating in a single market are mitigated.
In addition, companies owned by conglomerates have access to internal capital markets, enabling more ability to grow as a company. A conglomerate can allocate capital for one of their companies if external capital markets aren’t offering as kind terms the company wants.
(1)
(0)