Conglomerates may not be as nimble and agile as single-focus companies, but they are uniquely more resilient to economic shock events, and branches being "unprofitable" for a time can be supported by others.
Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.
Conglomerates aren't a strictly optimal form of organization. They are more resilient, but they are also massively bureaucratic and can lose their focus. They may also be able to exert a disproportionate amount of leverage on vendors and suppliers.
I'm not saying infinitely asset-light companies are strictly superior either.
I'm saying there's no silver bullet or free lunch here.
If you look at it from one layer above, capital markets that enable the continuous recycling of corporate structures into smaller or larger as needed are more resilient than those in which company structures are ossified.
Of course not every deal is for the better. But no M&A isn't good either. Speaking as a former Wall St M&A banker.
Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.