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In a sense, virtually all large U.S. companies are conglomerates; U.S. Steel, for example, not only turns out metals but also builds bridges and sells cement. However, in Wall Street parlance, conglomerates are generally those companies that have adopted a diversification-by-merger philosophy as a way of corporate life—and most of them share Harold Geneen's distaste for the term. After all, says Ralph Ablon, who has built his Ogden Corp. into a far-reaching (shipbuilding, metals, processed foods) conglomerate, the word connotes a company with "no unity, no purpose and no design."* To most image-conscious companies, the real conglomerates are thus the operations of men like Victor Muscat, a Manhattan-based entrepreneur whose corporate acquisitions generally follow no visible pattern, come after bitter takeover fights, and result in little in the way of new management initiatives.
Visible & Viable. The amount of control conglomerates wield over their crazy-quilt acquisitions varies widely. Many of the leading ones keep their headquarters remarkably lean. Litton is proud of the fact that it runs its far-flung empire with a central staff—secretaries and all—of fewer than 250 people. Chairman Rupert C. Thompson Jr. of Textron Inc., a $1.1 billion-a-year complex that makes everything from Sheaffer fountain pens to Bell helicopters, houses his entire headquarters in 1½ floors of a small office building in downtown Providence. So decentralized is Dallas' fast-growing Ling-Temco-Vought that it sets up its subsidiaries in seven publicly owned (but L-T-V-controlled) companies. In that way, explains L-T-V President James J. Ling, each company is "visible to the public and must be viable and capable of standing on its own."
Critics say that the conglomerates are little more than glorified holding companies. But companies like Litton Industries take the position that they are helping their holdings to grow syn-ergistically—by monitoring them for signs of trouble, providing them with computer and research services and risking money on projects they might not undertake on their own. Diversification has obvious benefits for the conglomerates, buffering them against bad weather within a single industry. To Andrew Carnegie's dictum to "put all your eggs in one basket and watch them," Gulf & Western's Bluhdorn replies: "If you have all your eggs in one basket, then you're stuck with those eggs."
For all the stir the Bluhdorns and Thorntons have caused in financial circles, the public at large, says Yale Historian John Morton Blum, is "conscious of a soup company, but not of a conglomerate." To remedy that, Textron, once a confederation of textile companies, is running ads making the point that the company now makes almost everything but textiles. "Think you've got Textron down pat?" the ads read. "What about electronic systems, golf carts, helicopters, chain saws?" Another company troubled by anonymity is Harold Geneen's ITT. "You can stop 15 people in the street and not one will know what ITT is," Geneen has lamented. "That bothers me."