Financial and industrial groups are a series of enterprises united by a common management structure and a source of credit, the role of which is usually played by a bank. The companies that make up the FIG do not necessarily represent the interests of a particular industry. They can perform various functions in the market, releasing dissimilar products. However, all investments are made from a single source. In addition, FIGs are concerns, sometimes a group of concerns, the majority of the shares of which belong to one private individual who determines the development strategy of all enterprises of the association.
Visible autonomy and structure
Formally, from a legal point of view, such enterprises operate autonomously from each other. At the same time, having external management and financing, they form what we are used to call “financial and industrial groups”. What is characteristic, with all the apparent autonomy, companies are oriented towards a specific task, which may not be directly related to the requirements of economic income growth. Financial capitalization often occurs due to the concentration of completely different resources.
Financial and industrial groups integrate the efforts of legal, insurance, financial companies, several alternative media resources and, of course, technological industries. What can unite them, except for the banal desire of the owner to earn a little? Obviously, politics. It’s just that a certain business development requires not so much judicial and legal as political and instrumental guarantees to preserve the inviolability of accumulated capital. And this is only possible if industrial, financial, banking and other types of capital are transformed into political capital, that is, into power. As a matter of fact, the activity of any financial-industrial group is aimed at solving such a problem.
Forms of financial and industrial groups
- Industrial financial-industrial groups are industrial associations operating on the principle of a concern. A rare case when these groups include the advantages of an enterprise in one sector of the economy.
- Classical financial and industrial groups are associations created on a contractual basis and created a management company as a basic link. All structural units of FIGs retain their previous legal status.
Financial and industrial groups in Russia
In principle, the financial-industrial group is a purely Russian phenomenon, which appeared thanks to the corresponding decree of the President of the Russian Federation in the second half of 1993. Initially, it was assumed that by creating such groups, the state would be able to quickly free itself from the series of unmanaged and, by and large, unprofitable post-Soviet enterprises, and somehow sort out unhealthy, wild-natured competition. However, the mechanism for creating FIGs did not imply the formation of “friendly integration” mechanisms, which provoked the emergence of super-players who occupied a dominant position in various market niches. Thus, instead of a controlled competitive environment, total monopolies were created that controlled entire industries and sectors of the economy. And this, in turn, has led to no less strong dependence of companies on the activities of government agencies. It was thanks to the creation of their own political projects that they began to create the “necessary” lobbying political and managerial decisions. So the monopolistic economy was born.