Can a Holding Company be an Effective Buffer for Government Enterprise?

Abstract

The holding company form of organization has held a continuing attraction for over 20 years. Yet, there has been no systematic analysis of what it is, how it can improve performance, or what the Indian experience has been with it.Murthy and Nath argue that the Indian holding company form has been unable to buffer the operating units.The authors identify two types of holding companies — the facilitator type, reducing the ministry's workload, and the other, the supplanting type, taking over the ministry's role. In both types, governmental procedures and control of the holding company and subsidiaries have continued.