H-form

H-form

a form of company structure in which constituent companies are completely or partially owned by a HOLDING COMPANY. Generally such structures arise out of merger or acquisition activity. The product range, production facilities and management structures are often left largely unchanged, and constituent companies can thus be said to be undigested. Little direct control is exercised by the holding company other than receipt of profits. The absence of central direction is often contrasted with that in the M-form company but in so far as the holding company confines itself to acquisitions, divestment and simple financial control it could be said to be a ‘pure’ form of the latter. H-form companies were at one time a common feature of UK industry but in the last thirty years the structure and activities of many have been rationalized (digested) to form multi-divisional companies. See PRODUCT-BASED STRUCTURE.