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Organization and spillovers in consolidating local industries
A small business owner typically needs a diverse set of skills to succeed, including deep market knowledge, effective management of business operations and hard work.
One way to increase sales and profits is through a process called business consolidation.
We begin by estimating the knowledge-production function in order to test for interregional difference with regard to the efficiency of innovation activities.
As a result, operating and capital costs decline, which helps improve the bottom line.
For example, airline mergers lead to the consolidation of maintenance facilities, which improves the utilization of both the facility square footage and the maintenance staff.
Our research contributes to the literature at the intersection of international business and sustainability by unraveling the mechanisms of environmental spillovers in host countries, from the perspective of an emerging economy.
We investigate the impact of knowledge spillovers and R&D cooperation on innovation activities in three German regions.
By reducing the number of facilities in a business, it can save money and operate more efficiently.
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This consolidation can also improve communication between business functions, such as production and marketing, and achieve savings by decreasing head count and consolidating systems and processes.Billie Nordmeyer works as a consultant advising small businesses and Fortune 500 companies on performance improvement initiatives, as well as SAP software selection and implementation.During her career, she has published business and technology-based articles and texts.For example, a jet engine manufacturer might close one under-utilized manufacturing plant and install additional production lines at another plant.By closing one plant, the company decreases its labor and overhead costs as well as its capital expenditures.This in turn gives the merged company more negotiating power to get better deals with suppliers.A business consolidation leads to the elimination of duplicate assets, which equals financial savings.Our findings indicate that horizontal (with competitors), backward and forward vertical linkages (with supply chain actors) all had a positive effect on the overall environmental performance of an industry.Moreover, we found that backward industrial linkages (with suppliers) have stronger environmental spillovers than forward (with distributors) and horizontal industrial linkages.During the consolidation process, business functions are frequently re-engineered and systems are deployed that make these functions even more efficient.In an airline merger, the acquisition of goods and services can be centralized, which helps the merged company adopt a corporate-wide pricing policy.