disadvantages of conglomerate diversification
Disadvantages of conglomerate diversification a. The dilution of shareholders earnings if diversification is into growth industries with high P/E ratios. b. Lack of a common identity and purpose in a conglomerate organization.onglomerate diversification occurs when a firm diversifies into areas that are unrelated to its current line of business. Synergy may result through the application of management expertise or financial resources, but the primary purpose of conglomerate diversification is improved profitability of the acquiring firm.