Exclusive dealing and vertical integration : the efficiency of contracts in the tuna industry /

Item 535

Servitization within manufacturing:exploring the provision of advanced services and their impact on vertical integration

Purpose – The debate about services-led competitive strategies continues to grow, with much interest emerging around the differing practices between production and servitized operations. The purpose of this paper is to contribute to this discussion by investigating the vertical integration practice (in particular the micro-vertical integration, otherwise known as the supply chain position) of manufacturers who are successful in their adoption of servitization. Design/methodology/approach – To achieve this the authors have investigated a cross-section of four companies which are successfully delivering advanced services coupled to their products. Findings – Manufacturers who have embraced the servitization trend tend to retain capabilities in design and production, and do so because this benefits their speed, effectiveness and costs of supporting assets on advanced services contracts. Research limitations/implications – These are preliminary findings from a longer term research programme. Practical implications – Through this research note the authors seek to simultaneously contribute to the debate in the research community and offer guidance to practitioners exploring the consequences of servitization. Originality/value – Successful servitization demands that manufacturers adopt new and alternative practices and technologies to those traditionally associated with production operations. A prevailing challenge is to understand these differences and their underpinning rationale. Therefore, in this research note, the authors report on the practices of four case companies, explore the rationale underpinning these, and propose an hypothesis for the impact on vertical integration of successful servitization.

Measuring economies of horizontal and vertical integration in the US electric power industry:how costly is unbundling?

This research employs econometric analysis on a cross section of American electricity companies in order to study the cost implications associated with unbundling the operations of integrated companies into vertically and/or horizontally separated companies. Focusing on the representative sample average firm, we find that complete horizontal and vertical disintegration resulting in the creation of separate nuclear, conventional, and hydro electric generation companies as well as a separate firm distributing power to final consumers, results in a statistically significant 13.5 percent increase in costs. Maintaining a horizontally integrated generator producing nuclear, conventional, and hydro electric generation while imposing vertical separation by creating a stand alone distribution company, results in a lower but still substantial and statistically significant cost penalty amounting to an 8.1 % increase in costs relative to a fully integrated structure. As these results imply that a vertically separated but horizontally integrated generation firm would need to reduce the costs of generation by 11% just to recoup the cost increases associated with vertical separation, even the costs associated with just vertical unbundling are quite substantial. Our paper is also the first academic paper we are aware of that systematically considers the impact of generation mix on vertical, horizontal, and overall scope economies. As a result, we are able to demonstrate that the estimated cost of unbundling in the electricity sector is substantially influenced by generation mix. Thus, for example, we find evidence of strong vertical integration economies between nuclear and conventional generation, but little evidence for vertical integration benefits between hydro generation and the distribution of power. In contrast, we find strong evidence suggesting the presence of substantial horizontal integration economies associated with the joint production of hydro generation with nuclear and/or conventional fossil fuel generation. These results are significant because they indicate that the cost of unbundling the electricity sector will differ substantially in different systems, meaning that a blanket regulatory policy with regard to the appropriateness of vertical and horizontal unbundling is likely to be inappropriate.

Leadership in high-value services for manufacturers:advanced services and their impact on vertical integration

The debate about services-led competitive strategies continues to grow with much interest emerging around the differing practices between production and servitised operations. This paper contributes to this discussion byinvestigating the vertical integration practice (in particular the micro-vertical integration otherwise known as the supply chain position)of manufacturers who are successful in their adoption of servitization.Although these are preliminary findings from a longer-term research programme, through this technical note we seek to simultaneously contribute to the debate in the research community and offer guidance to practitioners exploring the consequences of servitization. Keyword: Servitization, Product-Service Systems, Through-life Services.

Degree of vertical integration and its buffering effects on political uncertainty

The focus of this study is on the governance decisions in a concurrent channels context, in the case of uncertainty. The study examines how a firm chooses to deploy its sales force in times of uncertainty, and the subsequent performance outcome of those deployment choices. The theoretical framework is based on multiple theories of governance, including transaction cost analysis (TCA), agency theory, and institutional economics. Three uncertainty variables are investigated in this study. The first two are demand and competitive uncertainty which are considered to be industry-level market uncertainty forms. The third uncertainty, political uncertainty, is chosen as it is an important dimension of institutional environments, capturing non-economic circumstances such as regulations and political systemic issues. The study employs longitudinal secondary data from a Thai hotel chain, comprising monthly observations from January 2007 – December 2012. This hotel chain has its operations in 4 countries, Thailand, the Philippines, United Arab Emirates – Dubai, and Egypt, all of which experienced substantial demand, competitive, and political uncertainty during the study period. This makes them ideal contexts for this study. Two econometric models, both deploying Newey-West estimations, are employed to test 13 hypotheses. The first model considers the relationship between uncertainty and governance. The second model is a version of Newey-West, using an Instrumental Variables (IV) estimator and a Two-Stage Least Squares model (2SLS), to test the direct effect of uncertainty on performance and the moderating effect of governance on the relationship between uncertainty and performance. The observed relationship between uncertainty and governance observed follows a core prediction of TCA; that vertical integration is the preferred choice of governance when uncertainty rises. As for the subsequent performance outcomes, the results corroborate that uncertainty has a negative effect on performance. Importantly, the findings show that becoming more vertically integrated cannot help moderate the effect of demand and competitive uncertainty, but can significantly moderate the effect of political uncertainty. These findings have significant theoretical and practical implications, and extend our knowledge of the impact on uncertainty significantly, as well as bringing an institutional perspective to TCA. Further, they offer managers novel insight into the nature of different types of uncertainty, their impact on performance, and how channel decisions can mitigate these impacts.

Internamentos por causas sensíveis a cuidados de ambulatório em contexto de integração vertical

RESUMO - Introdução: A criação das Unidades Locais de Saúde (ULS) em Portugal reconheceu a necessidade de reorganização do sistema para responder a novas exigências, apostando no caminho da integração vertical e da prestação de cuidados globais. A primeira ULS foi criada em Portugal em 1999, actualmente existem sete. Objectivo: Analisar a influência do modelo organizacional dos prestadores no número e tipo de internamentos por causas sensíveis a cuidados de ambulatório (ICSCA). Metodologia: Foram determinados os ICSCA segundo a metodologia do Canadian Institute for Health Information e respectivas taxas padronizadas nos distritos das unidades seleccionadas, entre 2006 e 2010. Utilizou-se o método da diferença das diferenças para a comparação dos períodos pré e pós-ULS, utilizando como caso controle um distrito em que os prestadores estão organizados no modelo clássico, Hospitais+ACES. Resultados: Foram incluídos no estudo 4.446 ICSCA (6,27% do total de internamentos). Existiram em média 296,4 internamentos anuais por distrito, sendo a taxa média 252,7 int.100.000 hab. Após a criação da ULS 1 evitaram-se, em média, mais 36% internamentos (93,3 int. 100.000 hab.). Na ULS 2, pelo contrário, houve um acréscimo de 7% na taxa de internamento (17,6 int. 100.000 hab.). Discussão e conclusão: Não foi encontrado um padrão na variação nas taxas de ICSCA após a criação das ULS. Será necessário alargar o estudo a um maior número de prestadores. A compreensão das razões destes resultados implica o estudo dos indicadores socioeconómicos, epidemiológicos e geográficos das populações, bem como as características dos prestadores (Hospitais e CSP).

Integração vertical de cuidados : o impacto nos custos do internamento hospitalar

RESUMO - Introdução: A integração vertical de cuidados surge em Portugal em 1999 com a criação da primeira Unidade Local de Saúde (ULS) em Matosinhos. Este modelo de gestão tem como principal objetivo reorganizar o sistema para responder de forma mais custo-efetiva às necessidades atuais. Objetivo: Analisar o impacto da criação das ULS nos custos do internamento hospitalar português. Metodologia: Para apurar o custo médio estimado por episódio de internamento hospitalar utilizou-se a metodologia dos Custos Estimados com base na Contabilidade Analítica. Contudo, não foram imputados custos por diária de internamento por centro de produção, mas apenas por doente saído em determinado hospital. Para efeitos de comparação dos modelos de gestão organizacionais consideraram-se variáveis demográficas e variáveis de produção. Resultados: Da análise global, os hospitais integrados em ULS apresentam um custo médio estimado por episódio de internamento inferior quando comparados com os restantes. Em 2004 os hospitais sem modelo de integração vertical de cuidados apresentam uma diferença de custos de aproximadamente 714,00€. No ano 2009, último ano em análise, esta diferença é mais ténue situando-se nos 232,00€ quando comparados com hospitais integrados em ULS. Discussão e Conclusão: Não existe uma tendência definida no que respeita à diferença de custos quando se comparam os diferentes modelos organizacionais. É importante que em estudos futuros se alargue a amostra ao total de prestadores e se aprofundem os fatores que influênciam os custos de internamento. A compreensão dos indicadores sociodemográficos, demora média, e produção realizada, numa ótica de custo efetividade e qualidade, permitirá resultados com menor grau de viés.

Terceirização versus integração vertical: teoria e prática

As mudanças significativas em termos de lógica do processo produtivo, as novas tecnologias e as alterações nas condições de competitividade abriram espaço para que a terceirização fosse alçada na condição de solucionadora de quase todas as questões estratégicas das empresas. A terceirização apresenta-se como uma possibilidade infinitamente mais adequada para uma série de situações enfrentada pelas empresas, mas não pode ser tratada como um novo dogma, visto que os dogmas, tanto os velhos como os novos, não conseguem mais dar respostas satisfatórias à efetiva prática empresarial moderna. A pesquisa pretende fazer uma análise conceitual dos principais fatores vinculados à integração e à terceirização - analisando os fatores propulsores, os restritivos, as condições alavancadoras - e um levantamento das empresas sediadas no Brasil que fizeram uso, nos últimos anos, dessas estratégias.

Concentração, integração horizontal e vertical das usinas canavieiras

Pós-graduação em Agronomia - FEIS

Integration versus Outsourcing in Stable Industry Equilibrium with Communication Networks

For the selection of a firm's structure between vertical integration and arm's-length outsourcing, the importance of the thickness of the market had been emphasized in the previous literature. Here we take account of communication networks such as telephone, telex, fax, and the Internet. By doing so, we could illustrate the relationship between communication networks and the make-or-buy decision. With communication network technology differing in each type of firm, both vertically integrated firms and arm's-length outsourcing firms coexist, which was never indicated in the previous literature. However, when common network technology is introduced, such coexistence generically does not occur.

Vertical coordination via contract farming

Bibliographical footnotes.

The determinants of the vertical boundaries of the construction firm

In the last few years, transaction cost economics has become a popular theory within the construction research community. This approach has been singularly applied as a means to explain and predict phenomena concerning the construction firm, including its vertical boundaries. However, this is at a time when the chief proponents of transaction costs are urging researchers to take a pluralistic stance in relation to the theory of the firm. The aim of this paper is to develop a pluralistic approach to the vertical boundaries of the construction firm. In order to achieve this, an integrative framework is described, based on the development of the efficient boundaries problem and the capabilities approach to vertical integration. Specifically, this framework draws on the complementary strengths of transaction cost economics and the resource-based view. It is concluded that the potential relative merits of theoretical pluralism, in terms of the vertical boundaries of the construction firm, are sufficient grounds to motivate empirical testing of the predictions associated with the integrative framework of vertical integration presented

The Integration of Rural Households Into Ruminant Livestock Industries in China

A major determinant of rural development in China is the way by which rural households integrate with rural industries. Three forms of integration – market integration, vertical integration and integration through local groups – are investigated. Policy measures that may facilitate household integration, household specialisation and market segmentation are identified. Findings for the ruminant livestock sector are widely applicable to other agricultural industries in China.