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A Case Study
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A Case Study of a Multinational Corporation: The Anglo American Corporation

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Many of you will not have heard of the Anglo-American Corporation. It is a conglomerate based in South Africa. A conglomerate is an organisation that operates productive capacity in a number of different areas of business. Anglo-American is a multinational conglomerate that owns over 100 companies all over the world.

The Anglo-American Corporation is under the control of South Africa's Oppenheimer family. Sir Ernest Oppenheimer took over the mining enterprise from late 19th century English mining magnate Cecil Rhodes. He passed the company specialising in diamonds and other gems, on to his son, Harry Frederick Oppenheimer. When Anglo-American was set up in 1917, half of the initial capital supplied came from US investors, with the condition that Oppenheimer's first choice for the company's name, "African-American," be changed to Anglo-American.

Since then the firm has grown in Africa and throughout the rest of the world through acquisition of firms in number of sectors including the mining, mineral processing, insurance, food processing, brewing and banking sectors. Perhaps one of the most famous subsidiaries of Anglo-American is the De Beers Consolidated Mines, which controls four-fifths of the world's rough diamond trade. The company's worldwide assets total at least $15 billion. Today, De Beers owns almost 40 percent of Anglo, and Anglo owns a large share of De Beers. Trying to get a grip of who owns whom is confusing.

The Importance of Copper

The power of Anglo American is perhaps emphasised when one considers that its annual turnover is Rand 2,443-million (Source: Sunday Times 1996).

The Anglo American Corporation owns over 27% of KCCM, with the rest under public ownership. Since the programme of privatisation it has invested directly in Zambia by buying a number of copper mines and processing plants such as the purchase of the copper rich Konkola Deep Mine in the Copperbelt. It has also purchased the Lusaka Zambian Breweries and achieved a major market share in the other copper belt brewery Northern Breweries. Its size and its involvement in the economy mean it is a most powerful organisation and is able to exert influence on the government.

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Related Glossary Items:
Liberalisation
Inward Oriented Development
Outward Oriented Development
ZCCM
Parastatals
Privatisation

Related Issues:
Privatisation of State Owned Enterprises

Related Theories:
The Arguments for Privatisation
Models of Economic Growth and Development:
Fisher Clark's Theory of Structural Change
The Harrod-Domar Model
The Lewis Model of Development
Rostow's Model - The Stages of Economic Development
Models of Demographic Transition