A specific type of business organization that emerged during the late 19th and early 20th centuries, this entity owns the outstanding stock of other companies. Its primary purpose is not to produce goods or services directly, but rather to control other companies. Standard Oil, under the guidance of John D. Rockefeller, serves as a historical example of this type of structure, allowing centralized control over various oil refineries and distribution networks without technically violating anti-monopoly laws initially.
The rise of this organizational model offered significant advantages to industrialists of the Gilded Age. It facilitated consolidation of power, reduced competition, and streamlined operations across multiple related businesses. By controlling the boards of directors of subsidiary companies, a central entity could dictate policies, set prices, and manage resource allocation to maximize overall profit. This structure often contributed to the growth of large-scale monopolies and trusts, impacting American economic and political landscapes significantly.
