Classwork: Globalization

🔹 Cartel = Companies that secretly agree with each other (illegal in many places).
🔹 Holding = A large company that owns and controls other companies.
🔹 Trust = Several companies that merge and become a single large company.

🔹 Cartel – OPEC (Organization of the Petroleum Exporting Countries)
OPEC is a group of oil-producing countries that work together to control oil production and prices. While not illegal, it functions similarly to a cartel because its members agree on how much oil to produce, affecting global prices.

🔹 Holding – Berkshire Hathaway
This company, owned by Warren Buffett, controls many different businesses, including Dairy Queen, Geico (insurance), Duracell (batteries), and more. Each company operates independently, but Berkshire Hathaway owns and manages them.

🔹 Trust – Standard Oil (historical example)
In the late 1800s, John D. Rockefeller’s Standard Oil combined many smaller oil companies into one giant monopoly. It controlled most of the U.S. oil industry, leading the government to break it up in 1911 to restore competition.

Holding Companies

Holding companies are entities that own controlling shares in other companies, allowing them to influence or manage their operations. Examples include:

1. Berkshire Hathaway Inc.
   • An American multinational conglomerate headquartered in Omaha, Nebraska. It owns diverse businesses, including insurance (GEICO), railroads (BNSF), utilities, and consumer goods2.
2. Sony Corporation
   • A Japanese multinational conglomerate headquartered in Tokyo. It operates subsidiaries like Sony Electronics, Sony Music Entertainment, and Sony Pictures Entertainment1.
3. Alphabet Inc.
   • The parent company of Google, established to house various subsidiaries such as YouTube, Waymo (self-driving cars), and Verily (life sciences)2.

Trusts

Trusts are legal arrangements where assets are held by one party for the benefit of another. Examples include:

1. Tata Trusts (India)
   • One of the wealthiest charitable foundations globally, managing assets for philanthropic purposes in areas like education, healthcare, and rural development5.
2. Mauritius Offshore Trusts
   • Known for robust protection laws under the Revised Trust Laws of Mauritius, these trusts provide high levels of security against creditors6.
3. New Zealand Foreign Trusts
   • These trusts gained attention after stricter registration requirements were introduced following the Panama Papers revelations4.

Cartels

Cartels are associations of producers or suppliers formed to regulate prices or restrict competition. Examples include:

1. Phoebus Cartel
   • Established in the early 20th century by lighting manufacturers to control the pricing and lifespan of incandescent light bulbs
2. OPEC (Organization of Petroleum Exporting Countries)
   • A consortium of oil-producing nations that sets production targets and prices among its members, functioning as a modern-day cartel
3. Sinaloa Cartel (Mexico)
   • A powerful drug cartel involved in trafficking heroin and cocaine across borders with extensive ties to law enforcement and military networks
4. Elevator Manufacturers Cartel
   • Between 1995 and 2004, companies like ThyssenKrupp, Kone, and Otis engaged in market-rigging practices in the elevator industry, resulting in fines by the European Union9.