Dial Corpa onetime bus company that now sells everything from soap to nuts, said it will separate into consumer products and services concerns, splitting a company with about $3 billion in current stock market value.

The Phoenix-based company's consumer businesses, with revenue last year ofabout $1.3 billion, will continue to operate under the Dial name. Its diverse airline-catering, convention, travel and money-order businesses, among others, will operate as a separate, as-yet-unnamed unit that last year had revenue of about $2.2 billion.

Dial joins a host of U.S. companies that have decided that the sum of the parts is worth more than the whole. Companies that have announced or completed spinoffs include AT&T Corp., ITT Corp., Minnesota Mining & Manufacturing Co., Dun & Bradstreet Corp., and Melville Corp. The stocks of companies that announce spinoffs outperform the overall stock market, according to a J.P. Morgan & Co. study.

a. The conglomerate form of business is perhaps the most difficult to manage in terms of directing new capital investments. Spin-offs can be likened to “undoing” a prior capital investment in a business. What ethical obligation do managers of conglomerates have to stockholders in the event that a higher stock price could be obtained if a business was spun-off rather than held?

b. What obligation do managers have to employees who are affected by spin-offs?