International Business: An Asia Pacific Perspective, Second Edition

10. Business Groups

The foreign subsidiary and parent multinational firm relationship, as captured in a multinational enterprise, is just one way to organize business activities. The discussion in Chapter 9 outlined some of the reasons that this form of business organization has emerged. As we move into international markets, we can encounter diverse forms of business organizations other than the multinational enterprise. One important form of business organization in many countries in Asia and elsewhere in the world is the business group.

A business group is a collection of companies affiliated by ownership, shared goals, cross-shareholdings, diversification, and commonalities in the organizational culture. The companies in a business group ...