In William Gaddis's 1975 novel "J R," a sixth grader from Long Island named J R Vansant quickly parlays one share of stock in a cable company and a deal to sell Navy-surplus wooden picnic forks into a vast empire he calls "the J R Family of Companies." J R owns, among other things, a textile mill, a matchbook producer, and a chain of nursing homes and funeral parlors, and is acclaimed by the press as "a man who sees where the parade is heading long before the paraders themselves do."

J R was modelled on the conglomerate kings of the nineteen-sixties, men like Jimmy Ling, of L.T.V., and Harold Geneen, of I.T.T. But he might well have served as the inspiration for L. Dennis Kozlowski, the recently deposed C.E.O. of Tyco International. During the nineteen-nineties, Kozlowski made Tyco an acquisition machine, spending tens of billions of dollars to buy hundreds of companies, in such lines as commercial lending, undersea cable, industrial valves, and disposable diapers. Working out of a small headquarters in New Hampshire, Kozlowski earned a reputation as a remorseless cost-cutter with an uncanny ability to discern value in overlooked companies. Analysts spoke glowingly of Tyco as a new-model G.E., and in April of last year Business Week named it the best-performing company in America.

Not this year, though. Under the weight of rumors about dubious accounting and financial chicanery, Tyco's stock has collapsed, shrinking the company's market cap by more than eighty billion dollars in six months. Each week brings accusations of misdeeds in the executive suite. (The other day, the company sued its own former chief corporate counsel, charging a "broad pattern of misconduct for personal gain.") This month, Kozlowski resigned and, a day later, was indicted on charges of evading more than a million dollars in sales tax on purchases of art. Instead of joining Jack Welch and Alfred P. Sloan in the pantheon of great C.E.O.s, Kozlowski has joined Kenneth Lay, Sam Waksal, and, apparently, all of Arthur Andersen in the ever-expanding gallery of corporate rogues.

Though Kozlowski may be a chiseller, that doesn't necessarily make Tyco a fraud. Nonetheless, he molded Tyco in his own image: it played fast and loose—incorporating itself in Bermuda, failing to disclose acquisitions, larding its financial statements with confusing footnotes—and placed more emphasis on clever asset-shuffling than on solid business practices. And the much heralded success of its business model was a bull-market fiction. Kozlowski claimed that he was building the next great American corporation, but, in resurrecting the discredited idea of the conglomerate, he ended up running a great American con game instead.

In everyday speech, people use "conglomerate" to mean any giant company. In fact, a conglomerate is a company made up of many different businesses that have very little to do with one another.A few decades ago, conglomerates ruled. During the sixties,I.T.T., under Geneen, bought two hundred and fifty companies, while W. R. Grace expanded into snack food, electromagnetic shielding, and recreational vehicles. By the end of the seventies, almost eighty per cent of the companies in the Fortune 500 were conglomerates. Not coincidentally, perhaps, American corporations performed horribly in the seventies, and eventually the conglomerates were torn limb from limb, as companies "de-diversified." With rare exceptions, today's powerhouses are focussed on one kind of business.

Why did the conglomerates die? One argument is that the market just wised up. In the sixties, the stock market was small, insular, and relatively ill informed, and that made it easier for a disciplined management team to find hidden gems. But over time the capital markets got better at finding the hidden gems. A conglomerate can succeed only if the people running it are brilliant investors and exceptional managers. There are many who are one or the other, but almost no one who is both.

Kozlowski presented himself as a man who could do it all—who had a knack for buying companies on the cheap and whipping them into shape. But what he really had a knack for was buying everything in sight, using Tyco's inflated stock as currency. He put a host of profitable companies under one roof but spent an appalling amount of money to do so (Tyco has twenty-seven billion dollars in debt), and there's little evidence that those companies performed better after Kozlowski came along.

Kozlowski insisted, to the end, that Tyco was not a conglomerate but "a multi-industrial company." In fact, conglomerateurs almost always reject the term. In the sixties, Rupert Thompson, of Textron, liked "non-related diversification." In the seventies, would-be J R Vansants preferred "freeform company." And when Jeffrey Immelt, the C.E.O. of G.E., was asked recently what he thought when people called G.E. a conglomerate, he said, "Hate it. . . . We run a multibusiness company with common cultures."

Call them what you like—conglomerates don't work. What investors want now, post-Enron, is transparency, clarity, and security, and conglomerates offer the opposite. It's no coincidence that companies with opaque and complex financials have been hammered in the last six months. (According to a recent Morgan Stanley study, the longer a company's annual report, the worse its stock-market returns.) Even G.E. is suffering. When it came to conglomerates, G.E., needlessly obfuscatory but phenomenally profitable, was always the exception that proved the rule. But then that's what people said about Tyco, too. After Enron, after Arthur Andersen, after Tyco, investors have had enough of exceptions. Now they'll take the rule.