If you can slice out all the P&L for one division neatly you can simply spin the business off The ones that get conglomerated into a large firm are those businesses that can't be neatly disentangled - there's a rational reason for some of this in the private sector
Practically speaking there's huge amounts of bad management because no one thinks clearly about good management and they're protected from upstarts who might because we have a zombie economy In theory though you'd actually expect that you can't neatly divide P&L responsibility