A conglomerate is a corporation that’s comprised of several different independent businesses.Usually, a conglomerate includes one company that owns a controlling stake in a number of smaller companies, which may or may not work in different industries. Each business conducts its operations separately, but each one’s management team reports to the parent company’s senior management. Two philosophies guide most conglomerates. One says that participating in a number of unrelated businesses helps the parent corporation use fewer resources and reduce costs. The other says diversifying business interests mitigates the risks that stem from operating in a single market. A manufacturing conglomerate may start out as a business that sells lights and then expand into other electronic products, like radios and household appliances. Then it may cross into a different industry, like opening a financial services firm or an aerospace company. A media conglomerate may start out as a newspaper. Then it may start television and radio stations, then book-publishing houses and film studios. A food conglomerate could start out selling soft drinks, then purchase an energy drink company and then expand further by buying companies manufacturing other types of food. Sometimes conglomerates grow too big to efficiently handle. Many in these situations respond by reducing the businesses they manage through divestiture and spinoffs. Today, examples of conglomerates abound. Some of the largest conglomerates in the United States include General Electric, 3M and Proctor & Gamble.