Often in the media you can hear the word "holding". In the financial sector, this word is very popular. However, many do not even think about what it is. In fact, there are a large number of holdings that are successfully operating today. To begin with, it is worthwhile to analyze this term in detail.
What is a holding?
There are several definitions of this concept. It is interesting to consider different interpretations in order to better understand the essence of the term. Holding is a system of commercial organizations, which implies the presence of a large management company and smaller subsidiaries. Typically, the management company owns a controlling stake.
Holding is a corporation that regulates the activities of independent organizations. The corporation regulates with the help of a controlling stake in controlled enterprises it owns.
The main distinguishing feature of holdings is that such organizations use their capital to purchase shares in other enterprises.
A little bit about the history of holdings
The holdings got their development with the advent of capitalism. A similar form of organization originated in the 19th century. For the first time, holdings appeared in the United States. The word "holding" was formed from the English word "to hold", which means "hold." Therefore, such companies were also called holding companies.
At that time, the first antitrust law existed that prohibited the formation of monopoly organizations and the obstruction of free trade in the market. In case of violation, the act imposed severe penalties, such as fines and a prison term of up to 10 years.
To circumvent this law, a holding structure was used, since in this case the formal independence of subsidiaries from the parent company was maintained. Thus, at the end of the 19th century, most American trusts were reorganized into holding companies. If you go back to the present, it can be noted that most of the largest corporations in the US and Europe have a holding structure.
Characteristic features of holdings
Such associations have many common features that have remained unchanged over the years, changing only in minor details.
The first and most basic feature is the concentration of shares in companies of any industry located in different regions. This gives great opportunities for managing the industry itself, the holding structure allows you to take into account all the nuances when making important decisions.
The second characteristic feature of the holding is multistage, which implies the existence of subsidiaries at several levels. Sometimes a holding can be depicted as a whole pyramid, where at the top there are one or two main companies, which can even be located in different countries.
Another feature of such associations is the centralized management of the holding. Companies can develop common policies and coordinate activities in the following areas:
- Networking between organizations.
- Reorganization of companies and the establishment of an internal structure.
- The direction of funds in the development of new products.
- Development of a unified strategy and tactics of behavior on a global scale.
Holding Organization Structure
The classical structure of the holding implies the presence of the following components:
- The main business company (it may be a joint stock company or limited liability company) or a partnership.
- Subsidiary business company.
Legal regulation
The activities of holdings are regulated by tax and antitrust laws.
With regard to antitrust law, it does not directly affect the definition of “holding”, but it often uses the term "affiliates". This concept is used in many industries, is contained in documents related to accounting, securities and joint stock companies. If we turn to the very meaning of this word, it means an individual or legal entity that can influence the activities of other individuals or legal entities engaged in entrepreneurial activity.
Holding Benefits
Holding is an association that carries a lot of advantages. It is worthwhile to understand in more detail what they are.
The main advantage is that the holding, due to coherence of actions, can more actively fight competitors and get visible benefits from this.
Holdings also have the following advantages:
- serious reputation and image of an influential structure;
- the ability to attract qualified personnel (scientific, managerial and others);
- centralization of capital, which allows for more efficient management;
- stable and steady position;
- the effectiveness of tax planning;
- the effectiveness of financial management;
- the possibility of a well-coordinated investment and credit policy;
- the possibility of combining scientific and industrial activities;
- distribution of commercial risks and much more.
Holding disadvantages
Holding is not only continuous advantages. Like any other form of business organization, it has a number of negative features. The disadvantages of the holding model are as follows:
- there is no competition inside the holding, which leads to the preservation of unprofitable production, and, consequently, to a decrease in the economic efficiency of the entire holding;
- bureaucratization of the administrative apparatus, complication of all processes;
- lack of a developed regulatory system for holdings;
- complicated workflow;
- the complexity of managing a large pool.
Classification of holdings
Holdings can be divided into several groups according to various criteria. The first classification that should be considered is by the way the management company controls subsidiaries. Allocate:
- property holding - in it a controlling stake in subsidiaries belongs to the management company;
- contractual holding - the management company does not own a controlling stake in a subsidiary, control is carried out on the basis of an agreement between them.
The next classification method is by type of work and function of the management company. According to her, all holdings can be divided into:
- net - these are associations where the management company carries out only management and administrative activities and does not conduct production activities;
- mixed - the management company carries out all types of activities, that is, it produces any products, carries out control measures and manages subsidiaries.
Russian holdings: specifics of activity
In our country, such a form of organization as holdings is quite developed. Of course, there are peculiarities of conducting such activities in Russia. Similar organizations of our country, and in particular, Moscow holdings, have a great influence on the state of the market. In the Russian Federation, 2 types of holdings are provided:
- financial (where more than 50% of the capital is constituted by securities of other companies, its main function is to manage and conduct financial transactions);
- mixed (characterized in that the company has the right to conduct its own production activities, usually operates in high-tech areas).
Now it is worth paying attention to the most influential Russian holdings. According to data for 2015, their list includes the following companies:
- Lukoil;
- Surgutneftegas;
- "Magnet";
- Vimpelcom;
- X5 Retail Group.
A bit about media holdings
Now you can often hear a word like media holding, sometimes such organizations are also called media conglomerates. The term "media holding" means a company that owns a large number of media resources. Among the major Russian media holdings, one can note such companies as VGTRK, STS Media and many others. This direction is currently actively developing.
