Conglomerate design, or H-form, is an organizational design with many unrelated businesses. For example, through its subsidiaries, a conglomerate has business in coal mining, oil palm plantations, automotive, banks, insurance, consumer financing, and construction.
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Each business operates separately with little or no integration exists. Top management in each subsidiary is responsible for their own profits or losses. They also function independently of the others.
Complexity is the main weakness of the conglomerate organizational structure. It is difficult for the parent company managers to make strategic decisions. They also face difficulties in comparing, evaluating, and allocating resources for diverse and unrelated businesses.
