Business group

All you want to know about Business group

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. Typical examples are Adidas Group or Icelandair Group.

In a less common and more general sense, a business group is a hybrid organizational form between a firm and market. 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.

The definition of business group varies. For instance, Leff[4] 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[5] refers to Indian business houses, emphasizing multiple forms of ties among group members. Powell and Smith-Doerr[6] state that a business group is a network of firms that regularly collaborate over a long time period. Granovetter[3] 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[7] claims that business groups lie between markets and hierarchies. Khanna and Rivkin[8] suggest that business groups are typically not legal constructs though some regulatory bodies have attempted to codify a definition.

See also

References

  1. ^ Business Groups: Between Market and Firm by James R. Maclean, October 14, 2005. Accessed May 6, 2006.
  2. ^ Business Groups in Emerging Markets: Paragons or Parasites? by Tarun Khanna & Yishay Yafeh, August 2005. Abstract accessed May 6, 2006.
  3. ^ a b 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.
  4. ^ Leff 1978:663
  5. ^ Encarnation 1989:45
  6. ^ Smith-Doerr 1994:388
  7. ^ Williamson 1975, 1985
  8. ^ Khanna and Rivkin 1999
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