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Horizontal Integration Oil Company BOil Company A Oil Company C Combining Several Competing Companies in the Same Industry.

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Presentation on theme: "Horizontal Integration Oil Company BOil Company A Oil Company C Combining Several Competing Companies in the Same Industry."— Presentation transcript:

1 Horizontal Integration Oil Company BOil Company A Oil Company C Combining Several Competing Companies in the Same Industry

2 Trusts Problem: NJ Law Prohibited Corporations from Owning Other Corporations A smaller corporation allows a larger corporation to control (but not own) its stock “in trust.” STANDARD OIL Co. ACo. ECo. BCo. CCo. D HELD IN TRUST

3 Interlocking Directorates When the same people serve on the Board of Directors of Corporations in the same industry Co. ACo. ECo. CCo. BCo. D Board of Directors

4 Holding Companies In 1888 NJ law changed to allow corporations to actually own (not just control) stock in other corporations. Holding Company: When a one corporation owns a controlling percentage of another corporation’s stock STANDARD OIL Co. ACo. BCo. CCo. DCo. E OWNERSHIP

5 Vertical Integration IRON FURNACE COAL MINE WIRE FACTORY IRON MINE MARKET STEEL MILL RAILROADS When one business controls various elements of the production & distribution process


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