Chambers of commerce Trade and industry organizations Industrial integration Cooperating among industries
Organizing production, or cooperative capitalizing, marketing, and planning among independent enterprises that are manufacturing certain products.
Production links began to be formed along with the division of labour in society, for example, when the hunter killed for meat and the women salted and dried the meat, and later cooked it for meals. In the early days of industrialization, British wool was woven on Flemish looms and returned to London tailors for cutting and sewing. Obviously the use of this strategy has increased along with the increase in industrialization. In recent years, much of the production and assembly of the new information technology has been shifted to low-labour cost areas of the Developing World.
Cooperation in industry leads to a decrease in production costs, and plays a large part in economic cooperation among the nations of the world. It allows the specialization of various enterprises in the activities which they are best equipped to do, and permits developing large-scale production capacity without forming huge and megalithic monopolies.
The advantages in cooperative linkages tend to go the largest and most powerful enterprises in the relationship, which can set both the prices which they pay for goods provided and the prices which they charge for goods produced. This is particularly evident on an international scale, where the third world producers of raw materials find their trade and pricing policies determined by their consumers in the industrialized West. Subcontractors are at the mercy of the major leader of the industry, must bear the investment cost of set-up and retooling, and are dependent on the continuation of links for their survival. Emphasizing links between existing enterprises over integrating production within a single enterprise lends itself to increased overheads, duplication of efforts, excessive and complicated planning, rigidity and the enhanced difficulty in drastic changes in the production process itself.
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