“If we all together is impossible, if we are divided all will fall” by informationmaker.blogspot.com
“If we all together is impossible, if we are divided all will fall”
Business combination
When a number of business undertakings combine together for
enjoying some benefits, a business combination forms. The constituent units
come into an agreement for fixing up the terms and conditions of combination. A
combination can enjoy some economies and benefits by eliminating wasteful
competition and partly by reducing cost of production lose their separate
entity.
“Business
combination is formed when two or more business undertaking units combine to
carry on business together for achieving the economic benefits”
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Main Points
- Joining of two or more companies / institutions
- Formation of single unit
- Carrying on business together
- Achievement of economic benefits
Causes of the growth of combination
Financial
problem
Small industrial units face various problems during the
period of depression, which make business unstable. So they, setup combination
in order to remove the dearth of capital and reduce the risk of business
failure.
General
tendency
When the tendency of combination takes place in a particular
industry, other industrial sectors are also affected as a result. So, they form
combination for their common objective.
Larger
Capital
Deficiency of capital is a great hindrance for the expansion
of business. So small units may form a combination to overcome this problem
Controlling
Competition
Unnecessary competition among various industrial units is
harmful for the achievement of progress. So, the industrialists feel pleasure
to set up combination in order to avoid the waste of their sources in excessive
competition.
Tariff
Facilities
Since industrial units combine together with the foreign
producers not only within the country but also in international market.
Therefore, the government provides tariff facilities to this industrial
combination.
Developed
of Means of Communication and Transport
Development of means of communication and transport has
enabled the businessmen to create close contact with each other. Fast and
developed means of communication and transport has a great contribution in the
growth of combination.
Economy in
Production
To face the competition in the internal and external market,
many industrial units combine together to achieve economy in various sectors
and provide quality goods at lower prices.
Control Over
Excessive Production
Overproduction is the wasting of economic resources. But it
is possible for the industrial combination to control production.
Growth of
Big Organization
It is inconvenient to organize the large number of small size
business units. But the growth of big organization (joint stock Company) das
made possible for various industrial undertaking to form combination
extensively.
Research
result
It is not possible for small industrialists to enjoy separate
laboratory and other research facilities due to their limited resources. They
combine together in order to interchange their research results
Technological
development
New techniques of production, formulas and automatic machines
have been brought a revolution in the field of commerce and industries. So,
technological development has also contributed to the formation of the
combination.
Represented by Seerat Francis
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