conglomerate - is the organizational form of the integration of enterprises, brings together a network of diverse companies under the unified financial supervision.When merging firms is irrelevant vertical and horizontal integration, and manufacturing community.Conglomerate - a direct result of the merger of various companies.
conglomerates and concerns: what is the difference?
Concern - a financial conglomerate, arising from the very short term as a result of the absorption of a number of independent firms in functional terms.
Currently, more and more multinational corporations are formed, but only in the developed countries.Their main goal - to accumulate smaller profits in countries with high taxes and a good profit in low.Transnational corporations controlled by employers in one country, and multinational suggests the international allocation of capital.
Features
merging companies do not have a target, and technological unity with the main activity of the integrator.
profiling production in such associations or becomes indistinct outlines, or disappears.Conglomerate - a combined company, preserving production and economic and legal independence but financially totally dependent on the parent company.Compared with the same structural units of diversified corporations, departments conglomerates enjoy greater autonomy and freedom in all aspects of its activities.Financial and economic methods used by the parent holding company, indirectly regulate the activities of entities.The structure of the conglomerate formed on the basis of a specific financial core, which in addition to the main holding company includes the investment and financial companies.
Motives conglomerate mergers
main reasons for acquisitions and conglomerate mergers:
- ensuring large economic basis;
- qualitative prediction of changes in the structures of industries and markets;
- access to important new technologies and resources;
- opportunity to buy cheap and sell dear;
- chance to improve the image of the organization's leadership;
- desire to improve management personnel of their own income;
- obtain a synergistic effect.
Currently, among the companies whose shares are traded on the New York Stock Exchange, officially classified as conglomerates of forty companies.
Notable examples
now successfully conglomerate - is, for example, BTR, Mitsubishi, Hanson, Raytheon.For example, the main specialization of the company Hanson - the acquisition of technologically simple businesses in stable sectors of the market.This holding company in the absorbed company achieves a significant reduction in production costs, and oversees the work of senior staff, making sure that they do not go beyond the planned budget.Solely due to strict measures of control and austerity measures conglomerate achieves excellent results from the once loss-making enterprises.
