BUSINESS ORGANISATION

Business Organisation and Policy

Business Organisation and Policy

Introduction

Business integration requires the alignment of strategies, objectives, processes, system and the information technology infrastructure and the international coordination of functional make use of information technology. The alignment requires coordination and a set of methods layout to represent different aspects of business to meet certain purposes. Today, customers are more demanding in terms of price, service and quality. This forces company to meet user requirement through reducing time to market, lower production costs and improve the quality of their products; likewise, must comply with regulations.

Business integration is very important in today's era. The integration of legacy systems (systems that already exist in companies) and new systems in most cases has become a headache for companies. The exits make available to customers in technology integration knowledge to deliver solutions on time and cost competitive, we have ISO 9001:2000 certified procedures. However, recently, Companies have changed their structure from vertical integration to the horizontal grouping. Both strategies developed for the growth of the business. Nevertheless, companies are moving towards horizontal a strategy which tends to sell their products in numerous markets and increasing their market share by overtaking a similar firm through merger (Blois, 1972, Pp. 253).

Discussion

Vertical integration

Vertical integration in microeconomics termed as the degree of ownership to hold a company's infrastructure, business processes, and technologies, competencies and so on in a chain of processes for production of goods or services (the direction to the suppliers of raw materials - back direction is to consumers in advance). Vertically integrated hold control over the companies by a common owner. Typically, each holding company produces different products or services to meet everyday needs. For example, in modern agriculture, in most cases, there exists a chain: gathering product, processing, sorting, packing, storage, transportation, and finally selling the product to the final consumer. The company controls all or some parts of this chain vertically integrated. Vertical integration is the opposite of horizontal integration. The monopoly created by vertical integration called a vertical monopoly. In contrast, horizontal integration, where a consolidation of several companies producing the same goods or services, vertical integration aimed at capturing a company of several stages of production of goods or services. For example, production of raw materials, the actual production of goods or services, the journey to the implementation, marketing and retail sales (Carlton, 1979, Pp. 189).

Backwards integration

The company provides vertically backwards integrated if it tries to gain control of the companies that produce raw materials necessary for the production of goods or services of this company. For example, automakers can own company that manufacture tires for the production of automotive glass and automobile chassis. Control over these companies provides stability of supply, quality and price of the final product. In addition, it allows you to increase vertical integrated holding their unique volume of surplus value.

Forward integration

The company carries forward vertical integration, if it seeks to gain control of the companies that produce products or services that are closer to the ...