Group companies Group

Group companies Group companies, clusters, industrial group, conglomerate or industrial conglomerate is, in law and economics, the conglomerate that all depend on a single parent, because it has a sufficient economic capital to make decisions. While each law firm is a separate legal entity, sometimes taking into account special arrangements for groups of companies to prevent fraud laws that cause harm to persons. Specifically conglomerate or multi-industry company usually refers to the combination of two or more corporations doing business completely different. The conglomerates are usually large and can be formed by the fusion of more than three companies.Business concentration or concentration is the grouping of industrial enterprises through agreements, mergers and the dependence of shareholdings to a parent company (holding, trust, cartel, etc..), Which reduces or even eliminates competition in a sector the economy, producing free-market changes that are called situations of imperfect competition, oligopoly or even monopoly. The concentration of firms in the same sector (or the same stage in a production process) is called a horizontal merger, while the firms in different sectors (linked to patronize each other) is called a vertical merger (which attempts to concentrate all or most of the stages of a production process, which also applies to companies within the same industry but operating in different stages of production).Concentrations, to overcome the negative effects of so-called business minifundismo, tend to generate synergies and economies of scale, though in some cases exceeded certain limits of size or complexity dysfunctional organizational effects (diseconomies of scale). When an area the size of a merger or group of companies beyond national borders is called multinational or transnational.

Comments are closed.