Page 138 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes 7.6.2 Barriers to and Advantages of Integration

Integration has to face many barriers to be successful. Such barriers may be:
1. legal, arising from different legal provision for research in different member states
2. institutional, relating to different expectations in different government bodies or research
institutions
3. cultural, relating to different cultures in different member states, linguistic
4. professional, concerning different expectations, methods of working, reward schemes
and outcomes amongst different professional groups (for instance researchers, and
government officials)
5. infrastructural, concerning incompatible platforms for knowledge exchange

6. financial, relating to different ways an levels of funding for research and innovation.
But all these barriers have to be overcome because of the potential benefits of integration. The
following are the advantages of integration:

1. Networked Business Models - connecting value-exchanging entities;
2. Sustainable Economies of Scale - applicable to both a discrete and integrated basis;
3. Focus on Core Competencies - acquiring skills and assets where required; and

4. Trusted Relationships - trust between stakeholders and clients.

Caselet Office Needs

ffice Needs, is a small chain of distributors of good-quality office furniture, carpets
and safes. Within each category, the company offers a wide variety of products
Owith a great many variations of each product being offered. For instance, the
company currently offers around 42 different designs of chairs and 23 varieties of office
desks. The company keeps in touch with advances made in the office furniture field
worldwide and introduces those products which are in keeping with the needs of the
market in terms of design, workmanship, value for money and technical specifications.

Office Needs trades only in quality furniture which is sturdily constructed. Differences
between its products and cheaper, lower quality ones are well known to those who have
several years of experience in the business.
An Important feature, the company feels, is the availability of a complete list of components
of the furniture system. This enables the customer to add bits and pieces of matching
designs and colour in the future. Such components are available for sale separately, Systems
are maintained in stock by the company for a number of years, and spare parts for chairs
and other furniture are always available.
The trade is currently witnessing a downtrend due to recession and players from local
unorganised sector. Office Needs has also experienced the same over the last two years. In
addition, it had to trim the profit margins. Last year, it barely broke even and this year it
is heading for a small loss for the first time in the company's ten year history.

Source: IGNOU Term End Examination Paper, Management Programme, Dec 2006.

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