Conglomeration advantages and disadvantages

Conglomeration has change the industry in the fields of movies and television in such that now both industries can combine into one big company that can do multiple things. For instance if a particular movie and television industry were to combine they can put out a television show then sometime down the road the movie side of the corporation can make a movie of the television show. But along with conglomeration come many advantages and disadvantages. Some of the advantages are that there is diversification, which can result in the reduction of investment risk. Also a conglomerate can create internal capital market if one of the external companies are not developed fully. A conglomerate can also show the growth of earnings, this is by acquiring companies who have shares that are more discounted then their own. Some of the disadvantages are that Culture clashes can destroy the value of the company; the extra layers of management can increase costs. This is big in the movie and television industry in that they are already paying boatloads of money to produce shows and movies that they don’t want to have to pay more money when they don’t need to. But in the long run by conglomeration both industries will profit off of it because they will be able to widen the spectrum of their companies which means that they will be able to produce more shows and movies at once.