In business, a group, business group, corporate group, or (sometimes) alliance is most commonly a legal entity that is a type of conglomerate or holding company consisting of a parent company and subsidiaries. A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to A conglomerate is a large Company that consists of seemingly unrelated Business sections A holding company is a company that owns part all or a majority of other companies' outstanding Stock. A parent company is a Company that owns enough voting stock in another firm to control management and operations by influencing or electing its Board of directors A subsidiary, in business matters is an entity that is controlled by a bigger and more powerful entity Typical examples are Adidas Group or Icelandair Group. WikipediaManual of Style (trademarks, which says "Lowercased trademarks with no internal Icelandair Group is an Icelandic travel industry corporation the owner of the airline Icelandair and numerous other travel industry companies
In a less common and more general sense, a business group is a hybrid organizational form between a firm and market. Companies law (or the law of business associations) is the field of Law concerning business and other organizations Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information This is typically a cluster of legally distinct firms with a managerial relationship. [1][2] The relationship between the firms in a group may be formal or informal. [3] A keiretsu is one type of business group. A is a set of companies with interlocking Business relationships and shareholdings.
The definition of business group varies.
- For instance, Leff (1978:663) defines business group as a group of companies that does business in different markets under common administrative or financial control whose members are linked by relations of interpersonal trust on the bases of similar personal ethnic or commercial background a business group. Encarnation (1989:45) refers to Indian business houses, emphasizing multiple forms of ties among group members. Powell and Smith-Doerr (1994:388) state that a business group is a network of firms that regularly collaborate over a long time period. Granovetter (1994:454) argues that business groups refers to an intermediate level of binding, excluding on the one hand a set of firms bound merely by short-term alliances and on the other a set of firms legally consolidated into a single unit. Williamson (1975, 1985) claims that business groups lie between markets and hierarchies. Khanna and Rivkin (1999) suggest that business groups are typically not legal constructs though some regulatory bodies have attempted to codify a definition.
- The research literature on business groups/alliances clearly shows that business groups can be based on different types of alliances such as bank relationships (e. g. , Frank and Myer 1994 for Germany and e. g. , Kojima 1998 for Japan), interlocking board directorates (Mizruchi and Galaskiewicz 1993), owner alliances (Kim 1991, for Korea), information sharing (Japelli and Pagano 1993), joint ventures (Berglöf and Perotti 1994), and cartels (Green and Porter 1984). The research also shows that business groups’ structure varies across corporate governance systems. Japan’s keiretsu are organized either vertically or horizontally and develop across industries. The keiretsu generally include a bank, a holding or a trading company, and a diverse group of manufacturing firms In contrast, Korea’s Chaebol are typically controlled by a single family or a small number of families and are uniformly vertically organized (Kim 1991). Chaebol (alternatively Jaebol, Jaebeol) refers to a South Korean form of business conglomerate. Business groups in Taiwan, guanxiqiye, tend to be small, loosely integrated entities with a didactic managerial style, as opposed to the authoritarian style common in Korean and Japanese groups (Fields 1995). Chinese business groups have developed their own unique structure: the groups are large multi-industry entities with strong ties to the state but not to particular families (Keister 1999). Most of this research stems from emerging market countries. Countries such as Sweden and Germany have recently experienced major changes in the business group structure; crossownership and pyramids have gradually disappeared. Yet we know very little about the effects of the business groups and even less about the effect of new business structures. [4]
One of the first published references to define business group was Leff (1976):
- A Group is a multienterprise firm that draws its capital from sources extending beyond a single nuclear family: e. g. , from people linked by communal, tribal, ethic or personal relations of trust and mutual confidence. In addition somewhat like the zaibatsu in pre-World War II Japan, the Groups invest and produce in several product markets rather than in a single product line. is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant For example, a Group's single decision-making center may encompass activities ranging as widely as textiles, cement, fabricated steel, zinc mining, and cattle ranching. The largest Groups also possess their own banks…and perform the principal functions of a capital market…The Groups in fact constitute a mechanism for mobilizing and pooling entrepeneurship and technical expertise as well as capital in large-scale, modern activities. [5]
See also
References
- ^ Business Groups: Between Market and Firm by James R. A business alliance is an agreement between businesses usually motivated by cost reduction and improved service for the customer A is a set of companies with interlocking Business relationships and shareholdings. Maclean, October 14, 2005. Events 1066 - Norman Conquest: Battle of Hastings - In England on Senlac Hill seven miles from Hastings, the forces Year 2005 ( MMV) was a Common year starting on Saturday (link displays full calendar of the Gregorian calendar. Accessed May 6, 2006. Events 1527 - Spanish and German troops sack Rome; some consider this the end of the Renaissance. Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar.
- ^ Business Groups in Emerging Markets: Paragons or Parasites? by Tarun Khanna & Yishay Yafeh, August 2005. Abstract accessed May 6, 2006. Events 1527 - Spanish and German troops sack Rome; some consider this the end of the Renaissance. Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar.
- ^ Granovetter, M. (1994). “Business groups,” in The Handbook of Economic Sociology (J. N. Smelser and R. Swedberg, Eds. ), pp. 453–475, Princeton Univ. Press, Princeton.
- ^ Projekt ansökan—The Impact of Business Groups/Alliances on Executive Compensation and Firm Performance, Sweden 1985–1997. Published October 21, 1999. Events 1512 - Martin Luther joins the theological faculty of the University of Wittenberg. Year 1999 ( MCMXCIX) was a Common year starting on Friday (link will display full 1999 Gregorian calendar)
- ^ Leff, N. , 1976. Capital Markets in the Less Developed Countries. The Group Principle. (ed. ) by McKinnon, R. in Money and Finance in Economic Growth and Development. New York: Marce Dekker.
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