Which term describes the combination of two or more corporations operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries?

Which term describes the combination of two or more corporations operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries?

• A. Co-operation
• B. Conglomeate
• C. Franchise
• D. Municipal authorities

Answer: (B)

Think of a conglomerate as a single parent company that owns several subsidiary companies, each operating in completely different industries. The parent guides overall strategy and provides capital, while the subsidiaries run their own operations in their respective markets. This broad diversification across unrelated fields is what defines a conglomerate and helps spread risk across the group. The other terms don’t fit this pattern: a cooperative is owned and run by its members for mutual benefit, not a centralized corporate group; a franchise is a licensing arrangement that lets individuals run their own business under a common brand; municipal authorities are government bodies that provide public services.

Think of a conglomerate as a single parent company that owns several subsidiary companies, each operating in completely different industries. The parent guides overall strategy and provides capital, while the subsidiaries run their own operations in their respective markets. This broad diversification across unrelated fields is what defines a conglomerate and helps spread risk across the group.

The other terms don’t fit this pattern: a cooperative is owned and run by its members for mutual benefit, not a centralized corporate group; a franchise is a licensing arrangement that lets individuals run their own business under a common brand; municipal authorities are government bodies that provide public services.