The Concern is a form of business association, a financial and industrial group, the distinguishing feature of which is the preservation of the legal and economic independence of the participants, but with a certain degree of coordination from the side of the parent financial structures.
Instructions
Step 1
Financial control in the group and some of the procurement, production and sales functions are under the same management. Members of one group cannot join another, i.e. cannot be members of several concerns at the same time.
Step 2
Concerns are of several types. Vertical concerns are associations of enterprises that cover the entire production cycle: from the purchase of raw materials to the sale of one or several similar types of products. Horizontal concerns are industrial groups that combine manufacturers with a similar product range, such as breweries. There are also mixed concerns combining horizontal and vertical mergers.
Step 3
As a rule, the activity of the concern covers one sector of the economy or a part of it. The concern may include enterprises of one or several industries with highly developed large and mass production, using new industrial technologies. Often this is mechanical engineering, metallurgy, steel production.
Step 4
According to the type of participation in capital, two types of concerns are distinguished: a subordination concern and a coordination concern. The first is created on the basis of the separation of the parent and subsidiary companies. Most often, it is created to combine industries into a technological chain. The coordination concern consists of equal share exchange enterprises or sister companies. With such a merger, the members of the concern have a mutual influence on the policy pursued, but at the same time remain under the general leadership. A coordination concern is usually created to combine financial activities or scientific and technical potential for the purpose of industrial development. Most often, the enterprises that are part of the coordination concern are weakly connected with each other in terms of the technological process.