The syndicate is ... The meaning of the word "syndicate"

The syndicate is an association of entrepreneurs who, centrally, for all members, purchase raw materials and sell products. All the companies-participants of the syndicate remain independent in production issues, but at the same time they have commercial dependence.

The meaning of the word "syndicate"

The term "syndicate" has many interpretations. Previously, syndicates meant any alliances that created the unity of the participants' material interests and did not belong to the number of ordinary societies, civil or industrial. In Russia, syndicates spread in the late XIX - early XX centuries, but they gained the greatest popularity in France, where there were both entrepreneurial and workers' associations.

If we talk about other countries, then the syndicate is one of the types of business unions, in particular those aimed at achieving a profit level profitable for all participants, through the joint standardization of sales of their products and the purchase of the raw materials required for production. In this sense, the term "syndicate" is an international concept.

The causes of the formation of monopolies, trusts, cartels and syndicates

In Russia, the impetus for the creation of monopolies and the transition to imperialism was the world crisis in the economy of 1900-1903. The crisis was particularly palpable, because the preceding rise was created artificially to a certain extent. Due to the fact that the country was dominated by foreign capital, there was an acute shortage of cash. In connection with the crisis, Western capitalists began to withdraw their funds from the country. Russian banks during this period have closed the loan, thereby putting the industrialists in difficult conditions for sale.

Monopoly as a way to deal with the crisis

Without credit, machine-building plants could not buy ore, metal, and so on. The products were stored in warehouses, factories stopped, because they could not sell the product and purchase fuel and raw materials for the continuation of production. Trade relations between enterprises without credit ceased. That's why the monopolies began to form. The industry of each branch at the congresses began to discuss the issues of combating the difficult economic situation in the world.

And as one of the ways out of the crisis arose the decision to apply the integration of the sale of products and the formation of common trade organizations, that is, syndicates. This made it possible to regulate prices and control the market. Monopolies in Russia existed in the form of syndicates. The syndicate is the lowest form of monopoly, since in this case it is not the production that is united, but only the sale of the output. In addition, it is easier to organize than a trust. Industrialists had enough to assemble and agree. At the same time, they remained owners of their enterprises within the syndicate, and the trust arises in the course of long-term competition, when one of the companies ruins its rivals.

What is the difference between syndicates from other business associations

In order to understand the difference between syndicates and other business associations, one should analyze the goals of their education and the main activities. Trusts and cartels were created, as a rule, by those entrepreneurs who were engaged directly in the production of goods. The activities of such associations were aimed at regulating the volume of production, marketing products and reducing production costs. The main purpose of their actions was to prevent overproduction of the profitability of joint ventures.

Entrepreneurial syndicates are, first of all, associations of organizations operating in the same sectors. These are the unions of sellers of one group of goods. In many cases, such syndicates united large competing enterprises in order to achieve a high level of profitability of their business. The main tool that they used was contractual price regulation. Syndicates in Russia, and in other countries too, sought to monopolize the relevant industries and markets more than trusts and cartels.

Types of syndicates in Russia

Among the types of syndicates operating in Russia, predominantly those commodity-trade unions that combined production and further sale of a certain product category prevailed. At the same time, the term "syndicate" was not used in the title itself. Created associations by degree of consolidation can be divided into unions of enterprises that were created to achieve any limited goals, and the trusts and the syndicates themselves.

In terms of territoriality, syndicates in Russia were divided into local and national. The first monopolies in Russia appeared in the early eighties of the 19th century. But the organizational structure of associations at that time was far from perfect. Cartels and syndicates, in general, were managed by congresses of manufacturers and breeders, on which were concluded multilateral agreements on the formation of associations.

The first form of monopoly

The Cartel Agreement was the first established and independently functioning monopolistic form. A cartel is a contract between legally and commercially independent organizations that regulate pricing policies and divide the market. In this case, large enough organizations enter into a legal agreement with similar enterprises.

It is worth noting that the cartel agreement as a form of monopoly proved to be quite tenacious. And now there is a considerable number of both informal and legal cartels in the sphere of export-import. The syndicate is another common form in which there was a monopoly capital. In such unions it is represented by an agreement, according to which restrictions are imposed on the sovereignty and independence of all its participants.

In addition, there is such a thing as a criminal syndicate, that is, an illegal or informal association of entrepreneurs and enterprises.