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(CEO Geneen undertook an aggressive strategy of diversification, Over time…

- - - - Hotel
      - Training services
      - Insurance
      - Car rentals
      - Telephone
    - - Managing businesses with analyzing the financials
    - - They need more specialized knowledge
      - Conglomerates were not effective in creating value from unrelated businesses.
      - The corporate headquarters staff was getting too bloated
    - - Split into 3 parts – water technology (Xylem), defense
        (Exelis), and engineered parts (“new” ITT)
      - The stock market zoomed up almost 20 percent
        
        Modern financial markets is quite efficient at allocating cash.
        
        Investors felt that the separate companies would be able to do much better by focusing on their respective businesses