2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
What is holding?
Holding is the main company that owns controlling stakes in all subsidiaries combined into a single structure. The main company controls the activities of all organizations that are part of it. Very often, such enterprises are independent of each other and have different areas of activity. For more than half a century, such forms of holdings as circular and cross have been strongly developed.
Circular holding is such a system when a subordinate company can simultaneously become a co-owner of the capital of the main company if it acquires shares of a higher founder. As a result, the subsidiary can control the activities of the parent to some extent.
What is cross holding? This is a form of capital participation, when the parent company of one structure can become the owner-partner of blocks of shares in subsidiaries included in the holding structures of other parent companies.
These two types of holdings are more suitable for commercial structures that are difficult to regulate by state bodies. The founders of a holding can be both individuals and legal entities.
Organization properties
To better understand what a holding is, let's look at its distinguishing features. These include the totality of shares of firms in various industries and sectors of the economy, which are dispersed over many regions. If you draw a pyramid, you can imagine that at the top there is one or two firms, from which subsidiaries, grandchildren and other related companies go down. This is how the gradation of such an organization as a holding looks like. The definition of a holding indicates that its management is usually centralized. It is almost always in the hands of the parent company.
The holding structure is an association of companies whose capital is owned by the parent company. What is a holding in terms of relations between subsidiaries and the parent company? Subsidiaries are legal entities and are completely independent, while the parent company receives profit from investments in their capital, and at the same time is not responsible for their obligations.
Unification paths
Enterprises can be combined into holdings in six ways:
The first way is called horizontal integration - joining enterprises that are united by a common activity. This is done to conquer new market segments, to strengthen the power of one company with the help of the strengths of another.
The second way is vertical integration - organizations are combined into one technological cycle, mainly to reduce overall production costs.
The third way is to create new companies andtheir subsequent joining to the created holding.
The fourth way is the creation of a new management company on the shares of two different organizations and its subsequent development, already without these organizations.
The fifth option is essentially the same as the previous one, only national and transnational corporations merge.
Last, but no less common and popular way, is the division of large companies after their restructuring.
Recommended:
Headcount: definition, concept and structure
For the management of any company, the question of how much staff should be in order for it to function effectively is always an important question. Number types. Calculation methods for different groups of employees. Possible structure of the firm's staff. Key indicators and calculation steps
The microenvironment of a firm is Concept, definition, main factors and structure
Any firm is created for profit. To prevent the company from becoming unprofitable, there is a marketing management system that allows you to create products that are attractive to the consumer. The success of the organization depends on the work of branches, divisions, departments, intermediaries and the actions of competitors. A successful marketer assesses the micro-environment and macro-environment of the firm
Media holding is Definition, structure, list of the largest
The article will discuss what a media holding is. We will analyze its structure and types in detail. In addition, you will be able to understand the main goals pursued by media companies merging into a holding. A list of the largest media holdings in 2018 is also provided
Foreign trade balance is Definition of the concept, its structure and essence
The trade balance as one of the key indicators significantly affects the economic situation of the country. The foreign trade balance is the difference between exports and imports (balance), in that order. In other words, the balance of trade is the difference between money flowing into and out of a country. Therefore, the balance can be both positive and negative (if expenses exceed income)
Organizational structure of Russian Railways. Scheme of the management structure of Russian Railways. Structure of Russian Railways and its divisions
The structure of Russian Railways, in addition to the management apparatus, includes various dependent divisions, representative offices in other countries, as well as branches and subsidiaries. The head office of the company is located at: Moscow, st. New Basmannaya d 2
