A collection of connected firms or subsidiaries that are owned and run by a parent company or holding company is referred to as a group of companies. Usually, the parent firm owns a majority ownership in each subsidiary, giving it the ability to influence their business practices and plans. By operating in several areas or businesses, these subsidiaries enable the group to lower risk and diversify its holdings. In order to attain economies of scale and boost productivity, a collection of businesses frequently pool their resources, knowledge, and infrastructure.
Better risk management, financial consolidation, and strategic coordination among its units are made possible by a group of enterprises' organizational structure. Conglomerates, which combine enterprises from several industries, and vertically integrated groups, which have companies in the same supply chain owned by the parent company, are two examples of prevalent group structures. Through varied operations, this structure can improve competitive advantage and offer financial stability.