Business Combination and its Form

Every company wants to minimise competition and increases its size,growth to earn maximum profit.There are a number of techniques to achive such goal.Business Combination is one of popular technique to increase the strength,size and earn maximum profit.

There are a number of scholars define Business Combinations by different ways.Some ways are as below-

According to L.H.Haney-To combine is simply to become one of the parts of a whole and a combination is merely a union of persons to make a whole or group for the prosecution of some common purpose is called Business Combination.

According to me Business Combination is an association of organisation for the achievement a big goal.

In other words we can say that Business Combination of an association of two and more than two organisations that operates in same sectors or concern sectors to minimise competition and increase profit.

Nature-

There are a number of natures of Business Combination.These natures are as below-

1.It is temporary or permanent.

2.It is written or oral.

3.It is an internal function of organization.

4.It is a legal function.

5.It is a formal function.

6.It is a future oriented function.

7.It is a goal oriented function.

Objectives-

There are many objectives of Business Combination.These objectives are as below-

1.To increase the growth of organisation.

2.To minimise the level of competition.

3.To increase the efficiency,effectivness of organisation.

4.To increase the financial strength of organisation.

5.To increase the production power of organisation.

Types of Business Combination-

There are many types of Business Combination.These types are as below-

1.Horizontal Combination-It is the first type of Business Combination.The process of Business Combination in which two or more than two organisation that work in same field of business combine each other/one another.This type of combination is called Horizontal Combination.

Ex-Iron-Iron Company

Sugar Sugar Company.

Advantage-

1.It increases production of organization.

2.It decreases per unit cost of organization.

3.It increases the profit of organization.

4.It increases the features of product.

5.It decreases the non productive expenditure of organization.

6.It increases the satisfaction level of organization.

7.It increases the selling and transaction of organization.

8.It consumes optimum level of Human resource force.

9.It consumes maximum level of assest.

10.It decreases the competition level of organization that is faced in the market.

2.Vertical Combination-

It is the second type of Business Combination.The process of Business Combination in which big organization combines small organization that produce part,equipment tools of main product this type of combination is called Vertical Combination.

Car company- Tyre company.

Advantage-

1.It decreases per unit cost of product.

2.It increases selling and transaction of organization.

3.It increases the profit of organization.

4.It increases the features of product.

5.It increases the features of product.

6.It increases the avalibility of raw material.

7.It decreases the non productive expenditure of organization.

8.It makes organization internally strong.

9.It consumes maximum of human resource forces..

10.It utilises assesr by productative way.

3.Diagonal Combination-

It is the third types of Business Combination.The process in which two or more than two organizationsthat produce part,sub part,non essential part of product combine each other/one another this type of combination is called Diagonal Combination.

4.Circular Combination-

It is also called Mixed Combination.The comination in which two different sectors organization combines each other and operates single management this types of combination is called Circular Combination.

So we can say that Business Combination is an economic event that plays an important role for the development of organization and country..