Types of enterprises trust concern syndicate cartel. The concept and types of business associations. holdings. economic forms of groups of companies: cartel, concern, trust, pool, syndicate, consortium, conglomerate. Similar jobs to - Types of business associations: map
Concern - (eng, concern - participation, interest) a voluntary association of enterprises, carrying out joint activities based on the centralization of the functions of scientific, technical and industrial development, as well as investment, financial and foreign economic activity, organization of self-supporting services for enterprises. Often such a group of enterprises unites around a strong parent enterprise (holding, parent company), which holds the shares of these enterprises in its hands. Nominally included in the concern, enterprises that produce individual goods located in different regions retain economic independence, remain legal entities, being subsidiaries, branches of the parent company. The Concern has common financial resources for development, a unified scientific and technical potential and stable cooperative ties between its member organizations.
Concerns can be sectoral and inter-sectoral, they unite enterprises of different specialization, which are in stable cooperative ties.
In fact, within the concern, a high degree of centralization of management and economic subordination is observed, especially in the field of financial and investment management. International concerns are known as transnational. Concerns which include participants from many countries are called multinational.
The members of the concern retain their economic independence, but the members of the concern cannot be part of other concerns.
A consortium is an organizational form of a temporary association of independent enterprises and organizations in order to coordinate their business activities.
A consortium can be created to carry out a large capital-intensive project or to jointly place a loan. In international trade, consortia are formed to fight together to get orders.
Within the consortium, roles are distributed in such a way that each participant works in the area of \u200b\u200bactivity where he has reached the highest technical level at the lowest production costs.
The actions of the participants are coordinated by the leader, who receives royalties for this. Each participant prepares an offer for its share of supplies, from which the general offer of the consortium is formed. The consortium is jointly and severally liable to the customer.
Initially, international consortia arose in the banking sector, and in the post-war years they began to be used in other areas of economic life. By uniting in a consortium, companies pursue the goal of increasing the technical and commercial competitiveness of their products. The specificity of the organization of the consortium is the conclusion by the customer of contracts with each of the participating firms. The parties are legally independent partners. For a consortium, a centralized management scheme is typical, with the participation of the state - a two-tier one. They are chaired by management committees, boards of directors, etc., which include representatives of government organizations of the participating countries. At this level, the issues of financing, distribution of tasks between the participants are resolved. At the firm level, coordinating committees are created, in charge of organizational and technical issues. The consortium is financed from the funds of its members. The main method of financing is the acquisition by the participants of titles for share contributions in the capital. A special role in the creation of a consortium is played by motives that are clearly manifested in projects that are important from the point of view of national security, prestige or technical superiority (space, aviation, communications, computers, biotechnology, defense, etc.).
The cartel is the simplest form of monopoly association. Unlike other, more stable forms of monopolistic structures (syndicates, trusts, concerns), each enterprise that entered the cartel retains financial and production independence. The objects of the agreement can be: pricing, spheres of influence, terms of sale, use of patents, regulation of production volumes, agreement on terms of sales of products, hiring workers. As a rule, it operates within the same industry. Hinders the functioning of market mechanisms. Subject to antitrust laws. Cartel agreements are usually viewed as a gentle form of monopoly. In some countries of the world they are prohibited by law, in others, on the contrary, their formation is encouraged in order to restructure the industry, standardize materials and components, and limit competition between small firms.
Typically, a cartel is created in the form of a joint stock company or a limited liability company.
The purpose of the formation of such associations is carefully hidden and, in general, the majority of cartels are secret.
An agreement on the formation of a cartel is formalized by an agreement; often the cartel is formed behind the scenes, without documentary registration. Cartel signs:
- contractual nature of education;
- legal independence of member-participants;
- joint activities in the market.
In accordance with the content of the cartel agreement, cartels are divided into:
- conditional, determining the conditions for the sale of goods;
- production shares, setting production volumes (production quotas) for each cartel member;
- territorial shares, defining sales areas;
- price contractual, setting the selling prices of the goods for the participants;
- profit sharing cartels;
- patent, rationalization, defining directions of joint use of technical inventions or, conversely, agreeing to delay their use.
By the nature of their operations, cartels are domestic and international, export and import.
In addition to the announced cartels, there are also unspoken cartels in the form of "gentlemen's agreements", pools. A common form of tacit cartel agreement is price leadership.
Usually a cartel is created for a long period (5-10 years).
An import cartel is a cartel created for the material supply of production. Such cartels contribute to the rationalization of the import and export of products.
Equity cartel -
Or a quota cartel, which allocates quotas to each of its members for the sale of products in accordance with production capacity and the amount of demand;
Or a territorial cartel allocating sales territories to each enterprise.
Costing cartel - a cartel whose members agree on the same structure and content of price calculations for similar products.
A contract cartel is a conditional cartel whose members recognize uniform sales discounts.
A conditional cartel is a cartel that uses a unified system of terms of trade, supply and payment.
A crisis cartel is a cartel created to restrict competition:
With a persistent protracted decline in demand (crisis cartel structure); or
With a temporary reduction in sales (crisis cartel of the conjuncture).
International cartel is an international union of monopolistic production structures focused on dividing sales markets and sources of raw materials.
A syndicate is an association of enterprises that undertakes the implementation of all commercial activities (price determination, sales of products, etc.) while maintaining the production and legal independence of its member enterprises.
For the sale of the products of the members of the syndicate, as well as for the purchase of raw materials, the syndicate creates special organizations in the form of trade partnerships.
Syndicate parties agree to sell all or part of their products through a single trading company, adhere to certain quotas for production, sales, prices, markets. The syndicate sales company can also procure raw materials for its members.
At the beginning of the twentieth century, the European Aluminum Syndicate (almost 100% of European and 50% of world production), the International Copper Syndicate (about 90% of world production) were widely known. Cartels and syndicates have now been replaced by various national and international economic organizations on the regulation of world trade. For example, OPEC, International Organization on coffee, International Grains Council, International Sugar Organization, etc.
A trust is an association of entrepreneurs, characterized by the fact that the enterprises included in it completely lose their production, commercial and legal independence and are subject to a single management.
In domestic practice, it is an organizational and production unit common in construction (construction trusts, assembly trusts, etc.).
The term "trust" began to be applied to any monopoly associations (cartels), although from a legal point of view, it should be based on trust.
Trusts differ from other associations in the comparative homogeneity of their products or include enterprises with successive stages of raw material processing.
Trusts are formed by the direct merger of the assets of the companies with the assets of the parent company and by the acquisition by the parent company of shares in the share capital of other independent enterprises. In the latter case, the trust has the form of a holding company, which actually manages the activities of enterprises.
Different types of associations can use different management components. The minimum amount of management (management components) is carried out in the cartel: marketing and business planning, common to all enterprises included in the association; more high level management in financial and industrial groups, where, in addition to marketing and business planning, financial management is also carried out; in the syndicate, in comparison with the previous structure, instead of financial management, there are such components as logistics and a common management system for all enterprises included in the association; in industrial and commercial groups, financial management is combined with logistics and a unified management structure. The highest level of organization is carried out in a concern, where all components of management are present: economics, business plan, marketing, accounting, finance, logistics and structures. Moreover, I must say that the holding during its existence can change the volume of management elements - from a cartel to a concern or vice versa.
Definition of monopoly
Monopoly - (from mono ... and Greek. Poleo - I sell), an exclusive right in a certain area of \u200b\u200bthe state, organization, company.
Monopolies are large economic associations (cartels, syndicates, trusts, concerns, and so on) that are privately owned (individual, group or joint stock) and exercise control over industries, markets and the economy based on a high degree of concentration of production and capital in order to establish monopoly prices and extraction of monopoly profits. Dominance in the economy is the basis for the influence that monopolies have on all spheres of the country's life.
If we pay attention to monopolistic formations in industrial production, then these are separate large enterprises, associations of enterprises, economic partnerships that produce a significant amount of products of a certain type, due to which they occupy a dominant position in the market; get the opportunity to influence the pricing process, seeking the most favorable prices for themselves; get higher (monopoly) profits.
Consequently, the main feature of monopoly formation (monopoly) is the occupation of a monopoly position. The latter is defined as the dominant position of an entrepreneur, which gives him the opportunity, independently or together with other entrepreneurs, to restrict competition in the market for a particular product.
A monopoly position is desirable for every entrepreneur or enterprise, because it allows you to avoid a number of problems and risks associated with competition: to take a privileged position in the market, concentrating in their hands a certain economic power; influence other market participants, impose their own conditions on them. It can be considered that monopolists impose their personal interests on their counterparties, and sometimes on society.
When analyzing monopoly, it is important to take into account the ambiguity of the very term "monopoly". First of all, it is impossible to deduce the essence of this phenomenon from the etymology of the word "mono" - one, "polio" - I sell. In reality, it is practically impossible to find a situation where there would be only one firm operating on the market - a manufacturer of goods without substitutes. Consequently, in the use of the term monopoly, and even more so "pure" monopoly, there is always a certain amount of convention.
This paper will consider the history of the emergence and development of monopolies in Russia, where the most common type of business combination was a syndicate.
A syndicate is an amalgamation of a number of enterprises of the same industry, the participants of which retain funds for the means of production, but lose ownership of the manufactured product, which means they retain production, but lose commercial independence. For syndicates, the distribution of goods is carried out by a general sales office.
The history of the emergence and development of monopolies in Russia
The processes of monopolization in the Russian economy in the late 19th - early 20th centuries gave rise to new types of business associations and a new nature of their relationship with the state, and in particular with the authorities government controlled.
In the scientific legal literature of that time, the concept of "entrepreneurial union" arose, covering such types of associations as cartels, syndicates and trusts, which differed in the degree of integration. It should be noted right away that the first two types of associations of entrepreneurs (or entrepreneurial unions) were more common in Russia - cartels and syndicates. It was syndicates that became the most widespread phenomenon at that time. Arose from corporate representative organizations of entrepreneurs-producers operating in various industries, these associations immediately acquired a purely commercial character. A characteristic phenomenon for them was that, being formally voluntary associations of the respective entrepreneurs, they were similar to those corporate associations that were their predecessors. This similarity lay in the fact that in cartels, trusts, syndicates, as well as in stock exchange committees, various congresses and societies of industrialists, the leaders of industries, the largest entrepreneurs-commodity producers, who largely determined the conditions for the organization and activities of the vast majority of such monopoly corporations, dominated. (business unions).
As for the relationship of government bodies with business unions, including the power-organizing activities of government bodies, their nature has changed significantly. The initiating role of the state in their creation was lost. The initiative to create such associations, or unions, came from the entrepreneurs themselves, their corporate public associations - congresses, societies, etc.
Lawmaking, normative and regulatory activities of the Russian state in this area lagged significantly behind the practice of organizing and operating business unions in Russia. The founding of business unions was carried out mainly outside the licensing or registration activities of government bodies.
In fact, in relation to such a phenomenon as business unions, during this period, we can talk about the prohibitive, predominantly, or stimulating activity of the state, including the government, ministries, judicial authorities, in relation to these business unions or monopoly corporations.
At the same time, it cannot be argued that government bodies, and above all higher bodies, such as the government, have lost the power-organizing levers of influence on the processes of organizing and operating business unions, which increasingly occupied dominant positions in key sectors of the Russian economy.
You can try to give a concise here comparative analysis legal, organizational, economic foundations of the organization and activities of cartels, syndicates and trusts. It should be noted that at the end of the 19th - beginning of the 20th centuries, these types of business unions in Russia practically did not differ in any way from the corresponding associations in the USA and Europe, from where they, in fact, came to Russia. The main significant difference is that in pre-revolutionary Russia syndicates became the main form of association, while cartels were a relatively rare phenomenon, and associations such as trusts were practically absent in Russian industry.
For all types of business unions, in an economic sense, it was, first of all, the fact that cartels, syndicates, and trusts were agreements of entrepreneurs aimed at regulating the conditions of production and (or) marketing of manufactured goods, at eliminating or weakening free competition between individual enterprises in a particular industry. The legal basis for the creation of cartels, syndicates, trusts was an entrepreneurial agreement, or an agreement of an entrepreneurial union.
The question of what the legal nature of this agreement is and on what legal basis this agreement should be regulated was of considerable interest to Russian lawyers at the end of the 19th century, especially since the Russian legislation of that time did not know such concepts as an entrepreneurial agreement and an entrepreneurial union. This concept did not fit into purely civilistic constructions. Moreover, at that time it was believed that it was hardly possible at all to give a uniform definition of an entrepreneurial contract. The range of relations covered by these agreements was too broad and uncertain.
In the very general plan it can be said that the agreement of the entrepreneurial union was a multilateral agreement concluded on the principle of voluntariness among entrepreneurs who, in their aggregate, controlled a significant or even most of the market for a particular product. Agreements could be of the most diverse nature in form and content. The absence of any legislative regulation of them provided a wide scope for this kind of rule-making. Agreements could be written or oral, closed or open, that is, published in print. If such an agreement was of a more or less permanent nature and the independence of the owners of enterprises within the framework of a permanent agreement was limited, but not completely destroyed, it could be a syndicate agreement
Syndicates acquired the greatest distribution in Russia at the end of the 19th - beginning of the 20th centuries in comparison with other types of associations of economic entities. The term "syndicate" is ambiguous. Syndicates generally meant all kinds of alliances that create a community of material interests between their participants and do not belong to the number of ordinary civil and industrial societies. The most widespread unions, called syndicates, were obtained in France, where there were, in particular, both syndicates of entrepreneurs and syndicates of workers.
In other countries, the term "syndicate" began to be used mainly to designate only one of the types of entrepreneurial unions, namely those that set as their main goal the achievement of a more or less profitable (in terms of height or stability) level of entrepreneurial profit for their participants by joint regulation (rationing) of the sale of their products, the purchase of items necessary for the production and production itself. In this sense, syndicates have become an international term. Domestic legislation of that time, like the legislation of European states and the United States, did not define syndicates.
The difference between syndicates and other types of business associations can be traced by the example of the goals of their creation and the main directions of their activities. Cartels and trusts were associations of enterprises (entrepreneurs), primarily as commodity producers. Intracorporate activity in these associations was carried out in the direction of regulating production and sales volumes, reducing production costs. The aim was to prevent overproduction of the profitability of the merged enterprises.
Business syndicates were associations of enterprises (entrepreneurs) operating in the same industry, already as sellers of a particular product. Such syndicates were, in most cases, unions of the largest competing enterprises. To achieve the main goal - a high and sustainable level of entrepreneurial profit - they used, as the main means, contractual price regulation. Syndicates, more than cartels and trusts, sought to completely monopolize the respective industries and markets.
Among different types the trade syndicates operating in Russia were dominated by commodity trade syndicates combining the production and sale of certain types of products. Moreover, the term “syndicate” was absent in their title.
According to the degree of consolidation of the merged enterprises, Russian syndicates can be subdivided into agreements of enterprises (entrepreneurs) concluded to achieve any limited goals (conventions), syndicates and trusts proper, which were mentioned above.
According to the territorial sphere of action, Russian syndicates can be subdivided into national, uniting all the most important enterprises of the same industry, and local, covering only individual enterprises of a particular locality.
So, in 1902, after relevant discussions at the XXVI Congress of Miners of the South of Russia, three syndicates were created to sell the corresponding goods in this region, and in 1904, in accordance with the recommendations of an emergency congress of the Ural miners, a syndicate was formed that united 12 large Ural factories that produced up to 80% of all Ural roofing iron.
There were also international syndicates in which Russian enterprises took part. Thus, in 1903, a syndicate was created to sell hay, dung and beet pitchforks. It included: a syndicate of German and a syndicate of Austrian metal enterprises with their central companies, as well as three russian enterprises, who by that time concentrated in their hands almost all the production of pitchforks in Russia.
The first monopolies arose in Russia in the early 80s of the 19th century among enterprises serving railway construction (the Union of Rail Manufacturers - in 1882, as well as associations of factories that produced structures for bridges, rail fasteners, etc. .). At the same time, a convention of entrepreneurs for the production of nails, wire, a cartel of sugar refiners was formed, and later - an export syndicate of Baku kerosene producers. In the context of the industrial boom of the 90s, the largest banks in the country (St. Petersburg International, Russian for foreign trade and others) began to actively finance the industry. The decisive role in the development of pre-monopoly capitalism into imperialism was played by the industrial crisis of 1900-1903, during which industrial production decreased by 5.7%, closed about 3 thousand enterprises. The number of unemployed has exceeded 200 thousand. During the years of the crisis, a massive emergence of monopolistic associations began, among which syndicates predominated. In ferrous metallurgy key positions took over the syndicate "Prodamet" - "Society for the sale of products of Russian metallurgical plants"In 1902, as well as the syndicates" Pipe sale "in 1902," Nail "in 1903. Non-ferrous metallurgy was dominated by the joint-stock company "Copper", in coal industry syndicate "Produgol", which controlled up to 70% of coal sales. In mechanical engineering, there were associations of steam locomotives ("Prodparovoz" in 1901), carriage ("Prodvagon" - about 100% of the production of cars) and bridge building plants in 1900. In the sugar industry, the Union of Refiners was founded in 1902. The first associations of St. Petersburg and Lodz cotton, jute, linen and other manufacturers were formed. In Russia, as in the developed capitalist countries, monopolies are becoming one of the foundations of all economic life. Along with industrial monopolies, large banking associations arose such as the St. Petersburg International, the Azov-Don, and later the Russian-Asian commercial banks.
The organizational structure of the syndicates at that time was very imperfect. Practically the only governing bodies of the syndicates were the congresses of manufacturers and breeders, at which the corresponding multilateral agreements on the creation of syndicates were concluded, their charters were adopted and the results of the implementation of these agreements were monitored.
Since, as already indicated, the legislation of that time did not recognize either agreements on the creation of business unions, or the business unions themselves, including syndicates, the issues of their organization and activities were practically not regulated in any way. Consequently, the binding provisions of the statutes of syndicates and agreements on their creation were not based on legal norms. In practice, this has led to significant violations of these agreements and statutes, and ultimately to the extreme instability of such entrepreneurial unions. Controversial issues were resolved by general meetings of members of these unions and by arbitration courts, which could impose fines for violations. However, in case of evasion of payment of fines, they could not be recovered in the general court order, again due to the lack of relevant legislative norms.
Q, units
Definition of monopoly profit:
D - demand;
MR is the marginal income;
MC - marginal cost
With the optimal positive volume for the monopoly, which maximizes profits, provided that the firm does not stop production, the marginal revenue should equal the marginal cost (MR \u003d MC).
1.2. Forms and types of monopolies
Monopoly has various forms: corner, cartel, syndicate, industry holding, trust, concern, consortium, conglomerate.
Corner - a method invented by German merchants back in XVI century. The meaning of this method is simple: merchants or manufacturers enter into a secret agreement on the purchase or temporary withdrawal from the market of some product in order to artificially create a shortage of it and cause a rise in prices. After that, the goods from the stocks are thrown onto the market, and the participants in the collusion receive an increased income.
For example, in 1931. members of the International Tin Cartel organized a tin corner. They bought up huge amounts of tin and created a rush for it, which in turn caused a sharp rise in prices. Having achieved this, the participants of the corner sold off their stocks of metal at a huge profit a year later.
Cartel - agreement of enterprises of the same industry on sales volumes, prices, sales markets, distribution of profits. However, the cartel agreement did not concern the production and, moreover, the supply and marketing activities of the enterprise. Regulation of such a monopoly is usually carried out through quotas and the definition of sales areas. A typical cartel is the Organization of the Petroleum Exporting Countries (OPEC), which includes 14 countries that produce about 70% of oil. It sets not only uniform prices for oil, but also distributes quotas for its production.
Syndicate usually represented by an association of enterprises, characterized by the fact that the distribution of orders, the purchase of raw materials, the sale of manufactured products are carried out through a single sales organization. The members of the syndicate are productively independent from each other, but commercially they do not have freedom of action. The organizational and legal form in which the syndicates operate is multifaceted. It can be a joint stock company, a limited liability company, an additional liability company, a general partnership, etc.
Industry holding - a method consisting in the purchase of controlling stakes in competing firms and thereby establishing economic control over them in order to conduct a single monopoly policy of sales and prices.
More complex forms of monopolistic associations arise when the process of monopolization extends to the sphere of direct production. On this basis, such a higher form of monopolistic associations as a trust appears.
Trust - abouta union in which the participants are deprived of their production and commercial independence. The trust is managed from a specially created single center. The profit received from the results of the economic activity of this organization is distributed in accordance with the equity participation of the enterprises included in it. At the same time, one usually distinguishes between a single-industry and a combined, diversified trust, when the association captures enterprises in another industry. A combined trust that unites enterprises in different industries is able to generate additional profit, firstly, through the use of by-products and waste from another industry, and secondly, through the organization of vertical combination, when one enterprise processes raw materials, another makes parts from it. the third turns them into goods, etc. In modern economic life, this form of monopoly organization of production is extremely rare.
Concern - one of the complex forms of monopolistic associations . As a rule, it includes enterprises of various industries, transport, trade and banking. Such an association is undertaken in order to reduce cross-sectoral competition through a single, centralized management of production, supply, sale of goods, planning their actions to introduce new technology and a promising strategy for common actions in the future. An important feature of the concern's activities is, on the one hand, strict internal financial control, and on the other, the economic independence of firms, departments, branches and the decentralization of management by major product groups and territories. Its goal is to specialize and integrate its businesses into a single economic complex. It is believed that the concern is the most developed form of business association based on common interests and carried out through a system of participation, financial ties, and personal unions.
Consortium - a temporary union of independent in the economic and commercial plan producers whose purpose is to carry out any specific economic projects. The consortium is formed on the basis of an agreement between the participants, which provides for the share of each of them in the costs, as well as the forms of participation of the project organization, other conditions of modern activities. The consortium members can be legal entities and individuals, private and state organizations, the state itself. The consortium is headed by one of its members, whose functions are stipulated in the agreement.
Conglomerate - fromthe streak of firms engaged in entrepreneurial activities in various sectors of the economy. This form of monopoly organization is characterized by a high level of decentralization of management, within the framework of which production units have a fairly wide autonomy. Conglomerate is one of the modern forms of monopolistic associations that emerged in the United States in the early 1960s.
The market is dominated by entrepreneurial, state and natural monopolies.
Entrepreneurial monopolies are the most common. They arise from successful competition. There are two ways to this. The first is the successful development of the enterprise, the constant increase in its scale through the concentration of capital. The second (faster) is based on the processes of centralization of capital, that is, on a voluntary merger or takeover by the winners of bankrupts. But, as a rule, this monopoly is temporary. Sooner or later, you have to give way to even more successful competitors.
State monopoly it is expressed, on the one hand, in granting individual firms the exclusive right to perform a certain type of activity, for example, the production of alcoholic beverages, the export of gold and furs. On the other hand, these are organizational structures for state-owned enterprises, when they unite and are subordinate to different chapters, ministries, associations. Here, as a rule, enterprises of the same industry are grouped. They act on the market as one economic entity and there is no competition between them.
Modern Russia retains the presence of the state in industries that are strategically important for the country. The share of the state in the blocks of shares of various enterprises varies by industry and the main sectors of the economy. Most of the companies with state participation are related to industry, transport, communications and R&D.
TO natural monopolies include industries and enterprises in relation to which the development of competition is impossible, ineffective and inexpedient. They arise in industries where one firm or corporation serves the entire market, for example, when it owns the only sources of minerals or raw materials. Also, a natural monopoly arises in those areas where copyright is in effect, because the author is a monopoly by law.
Identifies two types of natural monopolies:
natural monopolies ... The birth of such monopolies is due to the barriers to competition erected by nature itself. The law protects the rights of the owner, even if he ultimately turned out to be a monopolist (which does not exclude regulatory interference of the state in the activities of such a monopolist)
technical and economic monopolies ... Their occurrence is dictated either by technical or economic reasons associated with the manifestation of economies of scale.
Large natural monopolies in Russian Federation are the companies "Gazprom", RAO "UES of Russia", Ministry of Railways. Occupying only 4% of workers and employees, these three monopolies give 13.5% of GDP, 20.6% of investments, 16.2% of profits, 18.6% of tax revenues of the consolidated budget of the Russian Federation. The role of Gazprom is especially great due to its export potential: it gives more added value than RAO UES and the Ministry of Railways together, employing only 300 thousand employees, and profits and taxes are twice as much.
The existence of natural monopolies is explained by a special effect associated with the scale of production - the effect of saving resources as a result of the enlargement of production. Due to better technical equipment and higher power large enterprise there is an increase in labor productivity, which means a decrease in costs per unit of production. This means more efficient use of resources. The macroeconomic aspect of the problem is also important. Infrastructure networks, which are natural monopolies, ensure the interconnection of economic entities and the integrity of the national economic system. It is not for nothing that they say that in modern Russia the economic unity of the country is not least determined by unified railways, general electricity and gas supply.
Therefore, natural monopolies become a desirable phenomenon for society, although the monopoly nature still forces them to regulate their activities.
1.3. Monopoly and competition
K. Marx said: “In practical life we find not only competition, monopoly and their antagonism, but also their synthesis, which is not a formula, but a movement. Monopoly creates competition, competition creates monopoly. The synthesis is that the monopoly can be maintained due to the fact that it constantly enters into a competitive struggle. "
Competition is the most important factor in the effective development of the country's market economy. Competition (late Lat. Concurrentia - collision, from concurrere - to collide) is a competition between economic actors, when their independent actions effectively limit the ability of each of them to unilaterally influence the general conditions of circulation of goods in the relevant commodity market. Such a competition is inevitable and is engendered by objective conditions: complete economic isolation of each manufacturer, his complete dependence on market conditions, confrontation with all other commodity owners in the struggle for consumer demand. The market struggle for survival and economic prosperity is the economic law of a commodity economy.
Competition is the main regulatory mechanism in a market economy. “It is the force that subordinates producers and suppliers of resources to the dictates of the buyer or the sovereignty of the consumer. In competition, it is the supply and demand decisions of many buyers and sellers that determine market prices. ”
A competitive market provides for an unlimited number of sellers, as well as a situation in which each of them has no opportunity to influence the price. Here there is also free, unimpeded access of economic objects to any type of activity, visual and accessible to everyone information about the state of the market and possible alternatives, here the consumer dictates over production. All this testifies to the dominance of free competition.
Healthy, normal competition is achieved when the subjects of market relations are equal, understood not only as equality in the market of commodity producers, but also as equality in relations between all market participants: producers and consumers, production structures and market infrastructure, government bodies and structures of the market economy.
But the insecurity of competition pushes entrepreneurs to try to evade it, and this is possible only if a monopoly position is won. The advantages of a monopoly position are so attractive that the desire for a monopoly seizure of the market, ousting competitors in order to obtain monopoly high incomes is an objective reality.
It is rare that there is only one seller in the market. Much more often the industry is dominated by several large manufacturers (suppliers). It becomes profitable for them to create an alliance that occupies a monopoly position in the market (a monopoly based on collusion). The types (forms) of such monopolistic associations can be pools, cartels, syndicates, trusts and concerns.
Historically, there were three main forms of alliances: cartels, syndicates and trusts (Table 1.). The main differences between them are the breadth of the participants' agreements and the scale of their associations.
Table 1
The main forms of monopoly unions
CARTEL is an agreement of several enterprises on the division of markets, that is, setting prices for goods for all participants, conditions for hiring labor, exchange of patents, delimiting sales markets and derived quotas (who and how much) of each participant in the total volume of production and sales. Its goal is to increase prices (above the competitive level), but not to limit production and supply and marketing activities. The cartel rarely controls the entire market, because it is forced to take into account the policy of uncartelized enterprises. In addition, cartel members have a rather powerful temptation to deceive their partners by lowering prices or actively promoting their goods, which creates conditions for capturing a part of the market. Another way to covertly set monopoly prices is the so-called PRICE LEADERSHIP. Its essence is that when a leading firm in a given industry makes the desired price change, other firms "silently" follow it.
The cartel form of monopoly associations was most widespread in Germany. The number of cartels here increased from 300 in 1900 to 2200 in 1943; A striking example of an international cartel is the Organization of Petroleum Exporting Countries - OPEC. It worked especially successfully (for itself) in the 70s. By negotiating the quantity of products and prices, the OPEC countries dominated the world oil market.
To generate additional income, monopolists use other price "tricks". Thus, a “system of linked prices” is established for conjugated, complementary goods (printer and ink to it). The price for the printer is not high, but the price for the ink is too high.
Cartel agreements, where they are prohibited, are often negotiated by SECRET (without substantial formalization). But many cartels represent a temporary market structure and are rare.
SYNDICATE - this is the unification of a number of enterprises in one industry sector with the elimination of their commercial independence. In a cartel, each member of the association independently sells its products at a price set by the cartel. The syndicate provides for the delivery of all products to the syndicate, which sells it through their sales organizations. Syndicates, as a form of monopoly associations, were widely developed in Russia until October 1917. One of the first was created Sell, officially called the Society for the sale of products of Russian metal factories. The company united more than 20% of metalworking plants, which produced 80% of all industry products. Then organized Roofing, Pipe sale, Nail, Wire, Prodvagon, Copper, Produgol, etc. ... Syndicates arose in light industry, although less.
TRUST - this is the unification of the ownership and management of a number of enterprises in one or several industries with the complete elimination of their independence, both in commercial and industrial relations.
When a trust is organized, all the enterprises that are part of it become the property of the trust. And the entrepreneurs who are part of the trust receive a part of the shares of the trust corresponding to the amount of their capital. Trust not only
sells products of its member enterprises, but also completely disposes of them. Thus, trusts are the most powerful and antisocial manifestation of monopoly. It is no coincidence that in most countries of the world they are prohibited by law.
Sometimes so-called concerns may also be among the monopolists. CONCERN is a merger of a number of enterprises in various sectors of the macroeconomy through the establishment of a single financial control - HOLDING through the purchase of their shares. Concerns are the highest form of monopoly associations. Concerns differ from other forms of monopolistic associations in the following two features:
1) they include in their composition not only enterprises of various industries, but also transport and trade enterprises, banks and financial institutions;
2) the formation of a concern does not take place through an agreement between individual enterprises on the limitation or loss of their independence, but through the purchase of shares of many enterprises by entrepreneurs. As a result, these enterprises, although they retain their legal independence, economically come under the control of these major entrepreneurs.
For example, the German concern "Reinische Stahlwerke" in the late 50s of the XX century. controlled 113 companies in the metallurgical, metalworking, engineering, shipbuilding, chemical industries with total capital about 848 million marks. The Italian concern Fiat covers 150 companies in the automotive, aviation, mechanical engineering and other industries; his assets in 1964 amounted to $ 1.3 billion, and his enterprises employed 124 thousand people.
Many concerns rely on a dense network of small and medium-sized enterprises and achieve high efficiency through flexible capital maneuvering and channeling them into the most profitable sectors of the economy.
The simplest monopolistic association is interim agreement between individual companies, called a pool. These can be agreements on the price of products manufactured in the industry, on joint actions with respect to competitors that are not included in the this association, about the rules of conduct on the market for this product, etc. Since the agreement is temporary, such a monopoly association is unstable.
POOL - (from the English. pool - common boiler) - a form of temporary association of a number of independent companies, in which profit goes to the common fund (boiler), and then is distributed among the parties to the agreement in accordance with pre-agreed conditions. The following table 2 presents the distinguishing features of the pool.
table 2
2. The concepts of re-import and re-export
REIMPORT goods - a customs regime in which Russian goods previously exported from the customs territory of the Russian Federation in accordance with the export regime are imported back within the time frame established by law without levying customs duties and taxes, as well as without applying economic policy measures to them.
To place goods under the customs regime of re-import, they must simultaneously meet a number of conditions:
Be exported from the territory of the former USSR until 31.12.91, and from the territory of the Russian Federation - from 1.01.92 in accordance with the export customs regime;
Be until the moment of export russian goods (until 31.12.91.) or foreign origin and were released for free circulation on the territory of the Russian Federation (31.12.91.) with full payment of all customs duties;
Be imported into the customs territory of the Russian Federation within 10 years from the date of export;
Be in the same condition as at the time of export, with the exception of normal wear and tear or loss under normal conditions of transportation and storage.
Normal wear and tear ( natural decline) is determined based on the norms and standards, as well as other regulatory and technical documentation in force in Russia.
The use of goods for production or commercial purposes outside the country is not an obstacle to their placement under the customs regime of re-import, provided that the above conditions are met.
These goods may also be subject to operations to ensure their safety, minor repairs, putting in order, provided that their value, determined at the time of export, has not increased as a result of such operations.
The placement of goods under the regime under consideration is practiced when re-importing goods that were on conservation abroad.
Features of registration and calculation of payments.
The identity of goods placed under the customs regime of re-import, goods that were exported in accordance with the customs regime of export, the fact of their export, the moment of export, as well as the fact that the goods are Russian, must be established (confirmed) in a way that does not cause doubts among officials persons of the customs authority in authenticity and reliability The duty of proving the specified circumstances rests with the person concerned. With absence customs declaration or if the day of crossing the border is not confirmed, the moment of export of goods of Russian origin (before December 31, 1991 - the origin of the former USSR) is considered the day of its manufacture. If only the month of manufacture is indicated, then the first day of this month is considered such a day, if only the year is indicated - January 1 of this year. In the absence of documents indicating the date of manufacture of the goods, an examination can be carried out.
The use of goods for industrial or other commercial purposes outside the Russian Federation is not an obstacle to placing these goods under the customs regime of re-import.
Goods can be placed under the customs regime of re-import by any person, regardless of which person exported them.
In the event of damage or other deterioration of goods as a result of an accident or force majeure, such goods may be placed under the customs regime of re-import, provided that the fact of the accident or force majeure is confirmed in a way that does not cause doubts among customs officials about the authenticity and reliability.
When outside the Russian Federation, goods may be subject to operations to ensure their safety, minor repairs, including putting in order, and other similar operations, provided that the value of such goods, determined at the time of export, has not increased as a result of such operations. The ratio of the value at time of export to the value at the time of import is determined based on the US dollar. If prices in a contract or other document are expressed in any other currency, these currencies are converted at the exchange rate against the US dollar, respectively, at the time of export or import.
Application of customs duties, taxes and other payments and refunds
When reimporting goods within three years from the date of export, the customs authority refunds the paid amounts of export customs duties and export tax. Refunds are made under the following conditions:
If the goods were exported and imported by the same person who paid the export customs duty or export tax, or in whose interests such payments were made;
If a copy of the customs declaration was submitted to the customs authority, on the basis of which export customs duties or export tax were calculated and paid, and a written confirmation of the customs authority to which these payments were paid, or its legal successor about the actual receipt of payments to the accounts of the customs authorities or directly to the budget. The written confirmation must meet the requirements for financial documents;
If the export tax was paid to the customs authorities located on the territory of the Russian Federation;
If the person who paid the export customs duty or export tax, or in whose interests such payments were made, submits a written application to the customs authority for the return of the amounts paid. Such a statement is drawn up in any form. An application for the refund of the amounts paid must be submitted customs authority before the expiration of one year from the date of acceptance of the cargo customs declaration, according to which the goods are placed under the customs regime of re-import.
If at least one of the specified conditions is not met, the refund of the paid amounts of export customs duties and export tax is not made.
Only the amount of customs duty and export tax paid is subject to refund. At the same time, the refund of penalties, deferral fees and similar payments is not made, and the refunded amounts are not indexed, interest is paid on them.
The payment is made in the currency of the Russian Federation regardless of the currency in which customs duties and export tax were paid. If the payment was made in a foreign currency, the rate of which is quoted by the Central Bank of Russia, the conversion of the foreign currency into the currency of the Russian Federation is made at the rate of the Central Bank of Russia in effect on the day of acceptance of the customs declaration with the declared customs regime of re-import. If the payment was made in another foreign currency, its conversion into rubles is carried out at the exchange rate in effect on the date of payment.
The refund of the amounts paid is provided by the customs authority producing customs clearance goods placed under the customs regime of re-import.
When a part of a consignment of exported goods is placed under the customs regime of re-import, the amounts paid are refunded based on the quantitative ratio of this part to the consignment of exported goods.
Re - imported goods when imported into the customs territory of the Russian Federation are not subject to import customs duties.
When reimporting goods exported from the territory of the Russian Federation after January 1, 1992, the declarant pays to the customs authority the amounts of VAT returned in connection with the export, or from which the goods were exempted in connection with export, as well as excise taxes at the rates in force at the time of export goods.
The amounts payable are determined at the rates in force at the time of the export of the goods.
Benefits for the payment of value added tax provided exclusively in relation to goods imported into the customs territory of the Russian Federation are not applied.
The customs value for calculating the amounts payable is determined on the day of acceptance of the cargo customs declaration, in accordance with which the goods are placed under the customs regime of re-import. Customs clearance of goods placed under the customs regime of re-import
Customs clearance of re - imported goods is carried out at the customs authority in the region of which the recipient or its structural unit is located.
When placing goods under the customs regime of re-import, the declarant shall submit the following documents to the customs authority:
Cargo customs declaration;
Permission of other government agenciesif re - imported goods are subject to the control of these authorities;
A copy of the cargo customs declaration, in accordance with which the re - imported goods were placed under the export customs regime, or other documents confirming the fact and the moment of export of such goods from the territory of the USSR (before December 31, 1991) or the territory of the Russian Federation (from January 1, 1992 year) - shipping documents, etc .;
Other documents provided for by the Regulation on the customs regime for the re-import of goods dated 09.12.1993 or arising from it, necessary for the performance of customs clearance.
In the absence of reliable and confirmed by the relevant documents information on compliance with the requirements of the Regulation dated 09.12.1993, the placement of goods under the customs regime of re-import is not allowed.
For customs clearance of re - imported goods, customs duties are levied in the currency of the Russian Federation in the amount of 0.1% of the customs value of goods and in foreign currency, the rate of which is quoted by the Central Bank of the Russian Federation, in the amount of 0.06% of the customs value of goods.
REEXPORT goods - a customs regime in which foreign goods are exported from the customs territory of the Russian Federation without collection or with a refund of import customs duties and taxes and without the use of economic policy measures (licensing and quotas) (Article 100 of the Labor Code of the Russian Federation).
Re-export of goods is allowed with the permission of the customs authority, represented in the manner prescribed by the State Customs Code of the Russian Federation.
Customs clearance of foreign goods exported from the customs territory of Russia in accordance with the customs regime of re-export is carried out only with the permission of the State Customs Committee of Russia and only if the payment of customs duties and taxes is secured by the payment of the amounts due to the customs deposit, in which the customs clearance of goods will be carried out.
If the goods upon their import are declared to the customs authority of the Russian Federation as intended directly and exclusively for re-export, the period for their import into the customs territory of the Russian Federation cannot exceed 6 months. Such goods, if it is impossible to export them immediately, must be placed in a temporary storage warehouse or a customs warehouse.
It is also possible to place goods under the customs regime of re-export that were originally declared under a different customs regime, for example, a customs warehouse, but this can be done by russian legislation no later than 2 years from the date of import of goods. In this case, the re-exported goods must be in the same condition in which they were at the time of import, except for changes due to natural wear and tear or loss under normal conditions of transportation and storage, after confirmation of the fact of export of goods by the applicant of the regime, the paid import duties and taxes are returned.
List of used literature
1. Gravina A.A., Tereshchenko L.K., Shestakov M.P., Commentary on the Customs Code of the Russian Federation. Legal literature., 2006;
2. Grachev, Yu. N. Foreign economic activity... Organization and technology
foreign trade operations: educational-practical. allowance / Yu. N. Grachev. –M. : Business school "Intel-synthesis", 2005. - 592 p.
3. Degtyareva, O. I. Foreign economic activity: tutorial / Degtyareva OI [and others]. - M.: Delo, 2008 .-- 320 p.
4. Kulikov L. M. "Fundamentals of economic knowledge" M .: Finance and statistics, 2007
5. Regulation on the customs regime for the re-import of goods dated 09.12.1993, No. 525; as amended by 06/01/1999;
6. On the customs tariff: Federal Law of March 21, 2003 No. 5003-1 (as amended on August 22, 2004) // SZ RF. 2004. No. 12.
7. Prokushev, EF Foreign economic activity: textbook-practical. allowance / EF Prokushev. - M.: ITC "Marketing Textbook", 2008. –208 p.
8. Troshkina TN Customs code of the Russian Federation in questions and answers. - M .: New legal culture, 2004 - 330 p.
Syndicate (from the gr. syndikos - acting together) - a term originally referring to trade unions (trade unions). At a later time, a syndicate is an organizational form of a monopoly association, in which the companies included in it lose their commercial marketing independence, but retain legal and industrial freedom of action. In other words, in a syndicate sales of products, distribution of orders is carried out centrally.
They were widespread in pre-revolutionary Russia. International syndicates arose. A classic example is the De Beers diamond syndicate, which has concentrated in its hands the sale of almost all rough diamonds mined in the world. Russia, like many other countries, is forced to cooperate with this syndicate. For now, he has the potential to put pressure on outsiders who are trying to trade in diamonds on their own, up to and including their complete displacement from the market. In many countries of the world, laws have been adopted against any form of monopolistic associations that have a hindrance to economic development.
In the current Russian language, the word syndicate can refer to the following:
Group of financial institutions
trade unions
Lottery Syndicate
the America's Cup team
Conglomerate (from Lat. conglomerates - accumulated, collected) - a legal entity (holding), which includes companies engaged in entrepreneurial activities in various sectors of the economy. Conglomerates are mainly found in emerging markets (India, China, Russia, Latin America), in the BRIC countries, as well as diversified companies.
Typically, conglomerates are formed by absorption a large company several dozen small and medium-sized firms of various industries and spheres of activity, which do not have production, sales or other functional connections among themselves.
Conglomerates are public companies whose shares are traded on stock exchanges (LSE, NYSE).
Conglomerate shares are usually traded at a discount to their net asset value (NAV).
One of the most famous conglomerate companies is General Electric.
Holding (from the English holding "ownership") - the totality of the parent company and the subsidiaries it controls. In the Russian Federation, it is more correct to say a holding company. In addition to simple holdings, which represent one parent company and one or several subsidiaries controlled by it (which are said to be “sister” companies to each other), there are also more complex holding structures in which subsidiaries themselves act in as parent companies in relation to other (“grandchildren”) companies. At the same time, the parent company at the head of the entire structure of the holding is called the holding company.
Parent company control over its subsidiaries carried out both through dominant participation in their authorized capital, and through the determination of their economic activities (for example, performing the functions of their sole executive body), and in any other manner prescribed by law.
Characteristic features of the holding
1. Concentration of shares of firms in different industries and sectors of the economy or firms located in different regions.
2. Multistage, that is, the presence of subsidiaries, grandchildren and other related companies. Often a holding is a pyramid headed by one or two firms, often of different nationalities.
3. Centralization of management within the group through the development of a global policy by the parent company and coordination of joint actions of enterprises in the following areas:
development of a common tactics and strategy on a global scale;
reorganization of companies and determination of the internal structure of the holding;
implementation of inter-company communications;
financing investment in new product development;
provision of consulting and technical services.
Holding types
1. Depending on the method of establishing control of the parent company over subsidiaries, there are:
a property holding in which the parent company owns a controlling stake in the subsidiary;
a contract holding company in which the parent company does not have a controlling stake in a subsidiary, and control is carried out on the basis of an agreement concluded between them.
2. Depending on the types of work and functions performed by the parent company, there are:
a pure holding company in which the parent company owns controlling stakes in subsidiaries, but does not itself conduct any production activities, but performs only control and management functions;
mixed holding in which the parent company maintains economic activity, manufactures products, provides services, but at the same time performs management functions in relation to subsidiaries.
3.From the point of view of the production relationship, companies are distinguished:
an integrated holding company in which enterprises are linked by a technological chain. This type of holdings has become widespread in the oil and gas complex, where, under the leadership of the parent company, enterprises for the production, transportation, processing and marketing of products are united;
conglomerate holding that unites heterogeneous enterprises that are not connected by a technological process. Each of the subsidiaries runs its own business, in no way dependent on other subsidiaries.
4. Depending on the degree of mutual influence of companies, there are:
A classic holding company in which the parent company controls subsidiaries by virtue of its predominant participation in their authorized capital. Subsidiaries, as a rule, do not own shares of the parent company, although this possibility cannot be completely ruled out. In some cases, they hold small stakes in the parent company;
cross holding, in which enterprises own controlling stakes in each other. This form of holdings is typical for Japan, where the bank owns a controlling stake in the enterprise, and it has a controlling stake in the bank. Thus, financial and industrial capital merges, which, on the one hand, makes it easier for the company to access the financial resources available to the bank, and on the other hand, gives banks the opportunity to fully control the activities of subsidiaries by providing them with loans.
Examples of holdings
Meinl european land
Germany
MAN AG
Siemens
Voith AG
RosBusinessConsulting
RAO UES of Russia
SIBPLAZ
Agroholding
Gazprom-Media
Consortium - organizational form of temporary association of independent enterprises and organizations in order to coordinate their business activities.
A consortium can be created to carry out a large capital-intensive project or to jointly place a loan. In international trade, consortia are formed to fight together to get orders.
Within the consortium, roles are distributed in such a way that each participant works in the area of \u200b\u200bactivity where he has reached the highest technical level at the lowest production costs.
The actions of the participants are coordinated by the leader, who receives royalties for this. Each participant prepares an offer for its share of supplies, from which the general offer of the consortium is formed. The consortium is jointly and severally liable to the customer.
Monopsony (Greek μόνος - one, ὀψωνία - purchase) - a situation in the market when a single buyer interacts with many sellers, dictating to them the price and volume of sales.
An example of monopsony is the labor market, where there are many workers and only one enterprise - the buyer of labor.
Monopsony occurs under the following conditions:
On the one hand, a significant number of skilled workers who are not united in a trade union interact on the labor market, and on the other hand, either one large monopsony firm, or several firms united in one group and acting as a single employer of labor;
this firm (group of firms) hires the bulk of the total number of specialists in a certain profession;
this type of work does not have high mobility (for example, due to social conditions, geographic disunity, the need to acquire a new specialty, etc.);
the monopsony firm itself sets the wage rate, and the workers are either forced to agree to that rate or look for another job.
The labor market with elements of monopsony is not uncommon. Such situations are especially common in small towns where only one large firm operates - the employer.
With a perfect competitive labor market, entrepreneurs have a wide choice of specialists, labor mobility is absolute, any firm hires labor at a constant price, and the labor supply curve in the industry reflects the marginal cost of hiring a resource - labor. In monopsony conditions, the monopsony firm itself represents the industry, so the labor supply curves for the firm and the industry coincide. But for an individual monopsony firm, the labor supply curve shows not marginal, but average costs of hiring labor; for a monopsonyist, the labor supply curve is an average cost curve (ARC), not marginal.
Monopsony can also be false when applied to exchanges, for example, when at a high price, most buyers are not included in the trade.
Examples in Russia
Gazprom in the market for gas delivery to consumers
Transneft in the market of pipeline export oil supplies
Russian Railways on the traction rolling stock market
Cartel - the simplest form of monopolistic association. Unlike other, more stable forms of monopolistic structures (syndicates, trusts, concerns), each enterprise that entered the cartel retains financial and production independence. The objects of the agreement can be: pricing, spheres of influence, terms of sale, use of patents, regulation of production volumes, coordination of terms of sales of products, hiring workers. As a rule, it operates within the same industry. Hinders the functioning of market mechanisms. Subject to antitrust laws. In some countries of the world they are prohibited by law, in others, on the contrary, their formation is encouraged in order to restructure the industry, standardize materials and components, and limit competition between small firms.
Trust (from the English. trust) - one of the forms of monopolistic associations, within which the participants lose production, commercial, and sometimes even legal independence.
Real power in a trust is concentrated in the hands of the board or the parent company.
The most widespread were in the 19th century.
In the USSR, trusts appeared in connection with the NEP. They represented associations of enterprises of the same industry with self-financing. By a decree of the All-Russian Central Executive Committee and the Council of People's Commissars of April 10, 1923, the trust was defined as
a state industrial enterprise, which is given independence in the performance of its operations in accordance with the charter approved for them and which acts on the basis of commercial calculation with the aim of making a profit "
The "Regulations on State Industrial Trusts" of June 29, 1927 expanded the economic independence of the trusts. In the middle of the 1st five-year plan (1929-1934), the trusts became an intermediate administrative link.
Concern (German der Konzern) is a financial and industrial group of companies, mainly in the German-speaking countries of Europe and the Baltic countries. It is typical to preserve the legal and economic independence of the participants, but taking into account the coordination of the dominant financial structures. Usually, group members combine not only economic potential, but also efforts in market strategy. The main advantage of the concern is the concentration of financial and other resources.
The term "concern" was borrowed from german language and is inextricably linked with the history of the development of the German economy and the specifics of German legislation. However, it is a mistake to think that it was there that the first concerns appeared. It is believed that the first concern in the world and the prototype of future conglomerates was created in Florence by Cosimo Medici. At the end of the 13th - beginning of the 14th century, a group of his companies had representations, including in Iceland and Africa, sent employees and transported goods from Asia along the Great Silk Road, included banks and trading houses. The very concept of a concern emerged only after several hundred years. At first, similar to modern exchanges arose (although prototypes existed since 1351 in Venice, the first exchange opened in Amsterdam in 1602), then, with the development of industrialization, banking activities intensified and private enterprises began to unite into groups, concerns and conglomerates.
There are vertical concerns, horizontal concerns, and mixed concerns (also called conglomerates). Vertical associations are understood as associations of firms that cover the entire cycle from the purchase of materials through production to the sale of one specific type of product, for example, the Musterman concern, which deals with all aspects of publishing and the sale of books and other products. Horizontal concerns usually bring together similar firms with different clientele, such as combining breweries with different types of beer. The dynamics of the financial markets of the 60s, with typically intermittent ups and downs, played an important role in the formation of modern concerns. This allowed conglomerates to buy companies at discounted prices for bank loans, show a good return on investment, get even bigger loans and use financial leverage, thus creating a chain reaction. This is how the American General Electric, German Siemens, Japanese Mitsubishi arose or received a strong development.
In Russian, the word concern is most often used in relation to multinational financial and industrial groups in Europe, for example Siemens, ThyssenKrupp, Volkswagen, Dräger. Whereas in relation to American entities, the term "group of corporations", "financial group" or FIGs is usually used.