With the rapid development of business, various fashionable names for associations of commercial organizations appeared: corporations, trusts, concerns, etc. Among them there is a holding, and in modern marketing it is widely used to define the activities of various companies, give them significance and create the impression among people of the seriousness of a particular enterprise.
In fact, holdings are, in fact, the head offices of most of the subsidiaries that are part of them. The main activity of such organizations is management and control over their own structural divisions.
If we look at the translation English word"holding", it becomes clear that the holding company is the "holding". In simple words- it is a system of commercial enterprises, which includes a management structure - the head office, which owns a controlling stake. In addition, the parent organization may perform production functions. Often control over work component companies is carried out in such a way that the head office manages the largest companies, to which other subsidiaries are subordinated.
Holding corporations are legal entities that use their own capital to acquire shares of various independent enterprises. In the classical sense, holdings exercise control by appointing members of the board of directors to manage subsidiaries. In addition, contractual agreements are concluded with them, according to which the head office has big amount votes at meetings of current shareholders.
Control over subsidiaries can also be exercised under a special agreement. It sets out agreements between both parties, according to which the parent company gives instructions that are binding on all participants in the holding. The head office has the right to regulate the activities of all enterprises in relation to investment, financing, as well as production and economic activities.
How and why are holdings formed? Enterprises voluntarily or during the acquisition of shares various organizations unite to strengthen their position in a certain market area. In addition, increasing the number of constituent firms of the parent enterprise promotes growth and economic stability. Also, holdings are created for the purpose of:
At enterprises that are part of a certain holding, new interconnected production chains and distribution channels are created in order to uninterrupted operation all subsidiaries and reducing the degree of dependence on supplier companies. During the economic development of the holding, the head office often makes it the prerogative of its companies to release new products or provide new services. It is thanks to diversification that it is possible to increase production efficiency and competently run enterprises as a whole.
The holdings also create a service network consisting of specialized structural divisions (logistics, repair and construction services, sales departments, etc.). They, as a rule, undergo reorganization, after which they are registered as separate legal entities. This is done to significantly save the holding’s costs and improve the quality of work of structural divisions. The holding's service enterprises centrally serve all the companies that are part of it.
To significantly improve financial and operational performance, holdings often use a tool that allows them to compare the work of their own company with the results of market leaders in a certain segment and learn from them best methods building a business. For example, introduction latest technologies into production can significantly reduce enterprise costs, improve product quality and increase profits.
The structure of holding companies largely depends on the methods for solving production problems and the specifics of the activities of subsidiaries. Depending on how control over the constituent enterprises is exercised, parent companies are of the property or contract type. In the first case, the head office controls subsidiaries based on the presence of a majority of the capital while owning a controlling stake. Contract-type holdings manage their enterprises on the basis of an agreement concluded between the parties.
Holding companies can be pure or mixed. This depends on the activities and functions of the head office. Pure holdings are organizations that own a controlling stake in their own subsidiaries. In this case, the head office is not involved in production activities, but only controls all processes and manages the business. Mixed holdings are enterprises in which the parent organization is engaged in production activities, provides various services along with subsidiaries, and also conducts business and economic activities, which is no different from the work of the companies included in its composition, but it has control and management responsibility. functional. There are also (depending on the relationship between internal and production processes) the following types holdings:
A cross holding is a business structure where each firm owns shares in another subsidiary. In economics, this type of activity is known as sufficient effective tool interactions between various companies, allowing for the merging of industrial and financial capital and increasing profits. For example, a bank is the owner of a block of shares in a certain production. In turn, this enterprise also owns similar bank assets. This allows the manufacturing company to use the bank’s financial resources, and the financial organization to fully manage its work by providing credit funds.
Integrated holdings are companies in which all subsidiaries have a certain production relationship. If we take the organization OJSC Tatneft as an example, then some of its enterprises are engaged in exploration and search for gas and oil. Some of them produce equipment for mining, others manage the processing and sale of the finished product, and others manage maintenance. In total, the company includes over 100 independent structures - legal entities that are part of the holding.
As for conglomerate organizations, they unite firms of various types that do not have production interconnections. For example, in one holding there may be companies that are engaged in service, manufacturing of various products, advertising and other activities.
The undeniable advantage of forming holding organizations is effective fight with competing companies. This is achieved through the coordinated work of all subsidiaries and the head office. TO positive aspects This type of activity should also include:
Holdings, thanks to their solid capital, have the opportunity to invite people to work the best specialists in a certain area. This significantly improves the performance of the organization as a whole. In addition, it becomes possible to combine the production and scientific activities of the company, effectively distribute investments and credit funds.
Despite the obvious advantages of holdings, this form of enterprise has certain disadvantages. These include:
In such companies there is a fairly high degree of bureaucracy in the management apparatus, which leads to certain difficulties in doing business. Also, today there are no regulatory mechanisms that would allow regulating the work of holdings.
Different types of merged organizations use different management tools. For example, cartels require a minimum number of management functions, for which business development planning and marketing are used. They are mandatory and identical for all enterprises that are part of a small holding.
For more large organizations, in addition to the above tools, are also used various ways management financial flows. Units such as syndicates must have logistics departments and a single control center for the entire commercial structure.
Concerns have an even more complex management system, where the chain of its elements is formed from economic, logistics, marketing, accounting and financial departments, as well as business planning divisions. To increase the efficiency of each of them, top managers are provided with. For example, they are included in the number of partners and transferred a certain number of shares. As the enterprise grows, the value of assets increases, which is why the profit of not only the holding as a whole increases, but also that of a particular manager.
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Today, holding companies have become widespread in Russia. They have a significant impact on the development of many market sectors. Among the well-known and most influential organizations are Lukoil, Magnit, Surgutneftegaz, Vimpelcom, Russian Standard, Alliance, Almaz and X5 Retail Group. Media holdings are also particularly popular. They represent large associations who own a large number of media resources. One of the leaders in this industry is the companies STS Media and VGTRK.
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It should be noted that the tasks of the holding’s parent company include managing its subsidiaries, coordinating their actions, and redistributing resources. This form of activity is created with the aim of conquering new market segments, fighting competitors and reducing costs.
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Often in means mass media you can hear the word “holding”. This word is very popular in the financial sector. However, many people don’t even think about what it is. In fact, there are a large number of holdings that operate successfully today. To begin with, it is worth examining this term in detail.
There are several definitions of this concept. Interesting to consider different interpretations to better understand the essence of the term. A holding is a system of commercial organizations that implies the presence of a large management company and smaller subsidiaries. Typically the management company owns a majority stake.
A holding is a corporation that regulates the activities of independent organizations. The corporation regulates through a controlling stake in controlled enterprises that it owns.
Main distinguishing feature holdings - such organizations use their capital to purchase shares of other enterprises.
Holding companies developed with the advent of capitalism. This form of organization originated in the 19th century. Holdings first appeared in the USA. The word “holding” is derived from the English word “to hold”, which means “to hold”. Therefore, such companies were also called holding companies.
At that time, there was the first antitrust law, which prohibited the formation of monopoly organizations and obstruction free trade On the market. In case of violation, the act established serious penalties, such as fines and a prison term of up to 10 years.
To circumvent this law, a holding structure was used, since in this case the formal independence of the subsidiaries from the parent company was maintained. Thus, in late XIX century, most American trusts were reorganized into holding companies. If we return to the present day, we can note that most of the largest corporations in the United States and Europe have a holding structure.
Such associations have many common features that remain unchanged over the years, changing only in minor details.
The first and most basic feature is the concentration of shares of companies in any industry located in different regions. This provides great opportunities for managing the industry itself; the holding structure allows you to take into account all the nuances when making important decisions.
Second characteristic holding is a multi-stage structure, which implies the existence of subsidiaries at several levels. Sometimes a holding can be depicted as an entire pyramid, with one or two main companies at the top, which can even be located in different countries.
Also a feature of such associations is centralized management holding. Companies can develop common policies and coordinate actions in the following areas:
The classic structure of a holding implies the presence of the following components:
The activities of holding companies are regulated by tax and antimonopoly legislation.
As for antitrust laws, they do not directly address the definition of “holding”, but they often use the term “affiliates.” This concept is used in many industries, found in documents related to accounting, securities and shareholder activities. If we look at the very meaning of this word, it means physical or entity which may influence the activities of other individuals or legal entities engaged in entrepreneurial activity.
A holding is an association that brings with it a lot of advantages. It is worth understanding in more detail what they are.
The main advantage is that the holding, due to the coherence of its actions, can more actively fight competitors and receive visible results from this.
Holdings also have the following advantages:
Holding is not only about continuous advantages. Like any other form of business organization, it has a number of negative features. The disadvantages of the holding model are as follows:
Holdings can be divided into several groups according to various characteristics. The first classification that is worth considering is based on the method of control of the management company over its subsidiaries. Highlight:
The next method of classification is by type of work and functions of the management company. According to it, all holdings can be divided into:
In our country, such a form of organization as holdings is quite developed. Of course, there are specific features of conducting such activities in Russia. Similar organizations in our country, and in particular Moscow holdings, have a great influence on the state of the market. In the territory Russian Federation There are 2 types of holdings:
Now it’s worth paying attention to the most influential Russian holdings. As of 2015, their list includes the following companies:
Nowadays you can often hear the word “media holding”; sometimes such organizations are also called media conglomerates. The concept of "media holding" means a company that owns a large number of media resources. Among the large Russian media holdings, we can note such companies as VGTRK, STS Media and many others. This direction is currently actively developing.
Holding company (holding) is a system of commercial organizations that includes a “management company” that owns controlling stakes and/or shares of subsidiaries, and subsidiaries. Management Company can perform not only management, but also production functions.
Goals
The creation of a holding solves a whole range of problems dictated by modern conditions doing business in Russia.
Increasing management efficiency, increasing the investment attractiveness of a business, protecting against hostile takeovers, reducing production costs, risk management, increasing capitalization, entering an IPO are the most important business tasks that influence the decision to create a holding company and determine its structure.
Types of holdings
Depending on the method of establishing control of the parent company over its subsidiaries, the following are distinguished:
Depending on the types of work and functions performed by the parent company, there are:
From the point of view of production interrelation of companies, there are:
Depending on the degree of mutual influence of companies, they are distinguished:
Holding management
In accordance with the law, management of a holding, like any other joint stock company, is carried out through meetings of shareholders, boards of directors, and the executive directorate. However, for holding structures, the main shareholders are clearly defined and it is they who exercise (through the management apparatus) management of the entire group. There are features of the implementation and division into parts of a group of control procedures. At the highest level of the holding (as at all levels of complex holdings), the scope of management functions can vary significantly depending on the legal capabilities and preferences of the owners of each level.
Syndicate(from the gr. syndikos - acting together) - a term originally referring to trade unions (trade unions). At a later time, a syndicate is an organizational form of a monopolistic association in which the companies included in it lose commercial sales independence, but retain legal and industrial freedom of action. In other words, in a syndicate, the sales of products and the distribution of orders are carried out centrally.
They were widespread in pre-revolutionary Russia. International syndicates emerged. A classic example is the De Beers diamond syndicate, which has concentrated in its hands the sale of almost all rough diamonds mined in the world. Russia, like many other countries, is forced to cooperate with this syndicate. For now, he has the ability to put pressure on outsiders trying to trade diamonds on their own, up to and including completely ousting them from the market. Many countries around the world have adopted laws against any form of monopolistic associations that have an inhibitory effect on economic development.
Currently in Russian the word syndicate can refer to the following:
Group of financial institutions
trade unions
Lottery Games Syndicate
team participating in the America's Cup
Conglomerate(from Latin conglomerates - accumulated, collected) - a legal entity (holding), which includes companies engaged in business activities in various sectors of the economy. Conglomerates are mainly found in emerging markets (India, China, Russia, Latin America), in the BRIC countries, as well as multi-industry companies.
As a rule, conglomerates are formed by the absorption by a large company of several dozen small and medium-sized firms in various industries and areas of activity that do not have production, sales or other functional connections with each other.
Conglomerates are public companies whose shares are traded on stock exchanges (LSE, NYSE).
Conglomerate shares typically trade at a discount to their net asset value (NAV).
One of the most famous conglomerate companies is General Electric.
Holding(from the English holding “possession”) - a combination of the parent company and its controlled subsidiaries. In the Russian Federation, it is more correct to say holding company. In addition to simple holdings, which represent one parent company and one or more subsidiaries controlled by it (which are said to be “sister” companies in relation to each other), there are also more complex holding structures in which the subsidiaries themselves act as as parent companies in relation to other (“grandchild”) companies. In this case, the parent company, which is at the head of the entire holding structure, is called a holding company.
The parent company's control over its subsidiaries is exercised both through dominant participation in their authorized capital, and by determining their economic activities (for example, performing the functions of their sole executive body), and in other ways provided by law.
Characteristic features of the holding
1. Concentration of shares of firms in different industries and sectors of the economy or firms located in different regions.
2. Multi-stage, that is, the presence of subsidiaries, grandchildren and other related companies. Often a holding is a pyramid headed by one or two companies, often of different nationalities.
3. Centralization of management within the group by developing a global policy by the parent company and coordinating joint actions of enterprises in the following areas:
development of unified tactics and strategy on a global scale;
reorganization of companies and determination of the internal structure of the holding;
implementation of intercompany relations;
financing capital investments in the development of new products;
provision of consulting and technical services.
Types of holding
1. Depending on the method of establishing control of the parent company over its subsidiaries, the following are distinguished:
a property holding company in which the parent company owns a controlling stake in the subsidiary;
contractual holding, in which the parent company does not have a controlling stake in the subsidiary, and control is exercised on the basis of an agreement concluded between them.
2. Depending on the types of work and functions performed by the parent company, there are:
pure holding, in which the parent company owns controlling stakes in subsidiaries, but does not itself conduct any production activities, but only performs control and management functions;
a mixed holding in which the parent company conducts business activities, produces products, provides services, but also performs management functions in relation to subsidiaries.
3. From the point of view of the production relationship of companies, there are:
an integrated holding in which enterprises are connected by a technological chain. This type of holdings has become widespread in the oil and gas complex, where enterprises for production, transportation, processing and sales of products are united under the leadership of the parent company;
a conglomerate holding that unites heterogeneous enterprises that are not connected by a technological process. Each of the subsidiaries runs its own business, which is in no way dependent on the other subsidiaries.
4. Depending on the degree of mutual influence of companies, there are:
A classic holding company in which the parent company controls subsidiaries due to its predominant participation in their authorized capital. Subsidiaries, as a rule, do not own shares of the parent company, although this possibility cannot be completely ruled out. In some cases they have small stakes in the parent company;
cross-holding, in which enterprises own controlling stakes in each other. This form of holdings is typical for Japan, where the bank owns a controlling stake in the enterprise, and it has a controlling stake in the bank. Thus, the merging of financial and industrial capital occurs, which, on the one hand, facilitates the enterprise’s access to financial resources available to the bank, and on the other hand, gives banks the opportunity to completely control the activities of subsidiaries by providing them with loans.”
Examples of holdings
Meinl European Land
Germany
MAN AG
Siemens
Voith AG
RosBusinessConsulting
RAO UES of Russia
SIBPLAZ
Agroholding
Gazprom-Media
Consortium- an organizational form of temporary association of independent enterprises and organizations for the purpose of coordinating their business activities.
A consortium may be created to undertake a large capital-intensive project or to jointly issue a loan. In international trade, consortia are created to jointly compete for orders.
Within the consortium, roles are distributed in such a way that each participant works in the field of activity where he has achieved the highest technical level at the lowest production costs.
The actions of the participants are coordinated by the leader, who receives royalties for this. Each participant prepares a proposal for its share of supplies, from which the overall proposal of the consortium is formed. The consortium is jointly and severally liable to the customer.
Monopsony(Greek μόνος - one, ὀψωνία - purchase) - a situation in the market when a single buyer interacts with many sellers, dictating to them the price and volume of sales.
An example of a monopsony is a labor market in which there are many workers, and only one enterprise is the buyer of labor.
Monopsony occurs under the following conditions:
The labor market interacts, on the one hand, with a significant number of skilled workers who are not united in a trade union, and on the other hand, either one large monopsonist company or several companies united in one group and acting as a single employer of labor;
this company (group of companies) hires the bulk of the total number of specialists in a certain profession;
this type of labor does not have high mobility (for example, due to social conditions, geographical isolation, the need to acquire a new specialty, etc.);
the monopsonist company sets its own rate wages, and workers are either forced to accept this rate or look for another job.
A labor market with elements of monopsony is not uncommon. Especially often similar situations take shape in small towns where there is only one large company - the employer of labor.
In a perfectly competitive labor market, entrepreneurs have a wide choice of specialists, labor mobility is absolute, any firm hires labor at a constant price, and the labor supply curve in the industry reflects the marginal cost of hiring a resource - labor. Under monopsony conditions, the monopsonist firm itself personifies the industry, so the labor supply curves for the firm and the industry coincide. But for an individual monopsonist firm, the labor supply curve shows not the marginal, but the average cost of hiring labor; for the monopsonist, the labor supply curve is the average cost curve (ARC), and not the marginal one.
In relation to exchanges, monopsony can also be false, for example, when at a high price the majority of buyers are not included in the trading.
Examples in Russia
Gazprom in the gas delivery market to consumers
Transneft in the pipeline oil export market
Russian Railways in the traction rolling stock market
Cartel - simplest form monopoly association. Unlike other, more stable forms of monopolistic structures (syndicates, trusts, concerns), each enterprise included in the cartel retains financial and production independence. The objects of the agreement may be: pricing, spheres of influence, sales conditions, use of patents, regulation of production volumes, coordination of product sales conditions, hiring of workers. Operates, as a rule, within one industry. Complicates the functioning of market mechanisms. Subject to antitrust laws. In some countries of the world they are prohibited by law, in others, on the contrary, their formation is encouraged in order to restructure industry, standardize materials and components, and limit competition between small firms.
Trust(from the English trust) is one of the forms of monopolistic associations, in which participants lose production, commercial, and sometimes even legal independence.
Real power in a trust is concentrated in the hands of the board or the parent company.
They were most widespread in the 19th century.
In the USSR, trusts appeared in connection with the NEP. They represented associations of enterprises in the same industry with self-financing. By the decree of the All-Russian Central Executive Committee and the Council of People's Commissars of April 10, 1923, the trust was defined as
a state-owned industrial enterprise that is granted independence in the conduct of its operations in accordance with the charter approved for them and which operates on the basis of commercial calculation with the aim of making a profit"
The “Regulations on State Industrial Trusts” dated June 29, 1927 expanded the economic independence of the trusts. In the middle of the 1st Five-Year Plan (1929-1934), trusts became an intermediate administrative link.
Concern(German: der Konzern) is a financial and industrial group of companies, mainly in the German-speaking countries of Europe and the Baltic countries. It is typical to maintain the legal and economic independence of the participants, but taking into account coordination on the part of the dominant financial structures. Typically, group members combine not only economic potential, but also efforts in market strategy. The main advantage of the concern is the concentration of financial and other resources.
The term "concern" was borrowed from German language and is inextricably linked with the history of the development of the German economy and the peculiarities of German legislation. However, it is a mistake to think that it was there that the first concerns appeared. It is believed that the first concern in the world and the prototype of future conglomerates was created in Florence by Cosimo Medici. The group of his companies at the end of the 13th century - early XIV centuries, it had representative offices, including in Iceland and Africa, sent employees and transported goods from Asia along the Great Silk Road, and included banks and trading houses. The very concept of a concern arose only several hundred years later. First, exchanges similar to modern ones arose (although prototypes existed since 1351 in Venice, the first exchange opened in Amsterdam in 1602), then with the development of industrialization, banking activities intensified and private enterprises began to unite into groups, concerns and conglomerates.
There are vertical concerns, horizontal concerns, and mixed concerns (also called conglomerates). Vertical refers to associations of companies that cover the entire cycle from the purchase of materials through production to the sale of one specific type of product, for example, the Musterman concern, which deals with all aspects of publishing and the sale of books and other products. Horizontal concerns usually combine similar companies with different clienteles, for example, the merger of breweries with different varieties beer. The dynamics of the financial markets of the 60s, with typically intermittent recessions and ascents, played a major role in the formation of modern concerns. This allowed conglomerates to buy companies at reduced prices for bank loans, show good returns on investments, obtain even larger loans and use financial leverage, thus creating a chain reaction. This is how the American General Electric, the German Siemens, and the Japanese Mitsubishi arose or received strong development.
In Russian, the word concern is most often used in relation to multinational financial and industrial groups in Europe, for example Siemens, ThyssenKrupp, Volkswagen, Dräger. Whereas in relation to American entities the term “group of corporations”, “financial group” or financial-industrial group is usually used.
A holding is one type of combination of companies, such as a corporation, trust, cartel or syndicate. The roots of this good New Russian word, as often happens, come from an English word. “To hold” - “to own”, “holding” - “possession”. General value words are possession. Possession – main function holding, and ownership is its main goal. As they say, the process and the result are the same. This slogan is written in large letters on the facade of any office building, which has the honor to house the parent company of the holding. The letters may be invisible, but the slogan is real.
The holding is a business empire, and it was built according to imperial principles. Just as an empire unites different nations, a holding company can unite companies of very different specializations. Factories, newspapers, ships...
In the holding, just like in the empire, the power center is clearly visible. This kind of Rome is called a holding company. The holding company (usually called the “parent”) controls the other companies included in the association, which are usually called “subsidiaries.”
How is control carried out? The holding company owns main part shares of subsidiaries. Why not with a controlling stake, but with some vague “main part”? Because a controlling stake is 50 percent of shares plus one more. In fact, control over a company can be exercised by owning a significantly smaller percentage of shares, provided that other shareholders are small or inactive. So real, rather than legal control over the company can be achieved through much smaller financial investments. In that main secret, ensuring the existence of the holding, which is also called the “holding effect”. Holding allows you to own other companies for a much lower price than the price of purchasing the assets of these companies.
If we look at the example of the Roman Empire, there, as in all empires, control was exercised by the deployment of military contingents in subject territories. Egypt, for example, was the most important province of the empire because it supplied Rome with grain. What is Egypt? This is a fairly narrow fertile valley along the Nile. The rest of the Egyptian territory was a desert plateau. Control over Egypt was exercised by a large garrison in the main city, Alexandria, and smaller garrisons stationed in cities along the river to the first Nile rapids (where present-day Aswan is located). And the desert? Who cares about her? Thus, relatively few troops were required to hold the empire's most important province.
Another feature of the holding is the comparative independence of its subsidiaries in their investment and production activities. The holding company does not directly interfere in this area, but exercises control, requiring compliance with the general rules of managerial, financial and marketing discipline for the holding.
Let's draw an analogy with the empire again. In any empire, the independence of the subject provinces was not suppressed. Imperial governors (no matter what they were called: procurators, strategists, satraps) preferred to preserve local laws, beliefs and legal proceedings. Why replace something that already works well? However, along with local laws, imperial law also worked, strictly ensuring that loyalty to the empire was not violated. Poor Yeshua ha-Nozri was executed not because he was preaching a new teaching, but because of a denunciation that said that this teaching encroached on the power of the emperor.
Due to the relative independence of the holding's subsidiaries, a pyramidal management structure naturally arises. Subsidiary branches transmit information to the parent company regarding the general policy of the holding, without complicating the center with the direct management of their current affairs. They deal with their problems themselves, but a good material and financial report to the holding company is sacred. Isn’t it reminiscent of the economic activities of the Soviet Union republics with a mandatory plan for supplying the “center,” for example, with cotton or citrus fruits?
For subsidiaries, joining a holding company provides relatively quiet activity, since the holding company provides protection and patronage. Roughly speaking, the loss of independence by a subsidiary is a price for protection. The subsidiary may also receive centralized financial assistance for the implementation of individual large projects. How can one not remember that Soviet Tajikistan could not fear encroachments from neighboring Afghanistan and quite successfully implement such a large project as the construction of a hydroelectric power station on the Vakhsh River.
Naturally, the holding's subsidiaries coordinate their activities and in no way interfere with each other. After all, mutual competition will not benefit the holding. It is difficult to imagine a fratricidal war between the Armenian and Azerbaijani Soviet socialist republics!
However, let us remember what was said at the beginning. The purpose of the holding is not the prosperity of its individual companies. The entire holding is aimed at further expansion and acquisition of new companies. This is the key to the growing power of the holding. Any holding is a predator in principle and always strives to “eat” someone and add one or two or three more companies. The appetites of a predator are limited, on the one hand, by the appetites and strength of the same predators, and on the other hand, by the state, for which large corporations are enemies invading the sphere of power that rightfully belongs to it.
Well, here too the analogy with the empire applies. The power of one empire is hindered by the power of another empire. Or – in our times – “global public opinion”, which plays the role of a kind of world state.
