In a market economy, a kind of game is played where the players are, on one hand, investors – the owners, and on the other, consumers –
employees. Economic entities compete with each other, and consumers are the ultimate verifiers of their actions.
Many of us ask ourselves whether the organizational changes taking place in various sectors of the economy, consisting of merging or spinning off separate entities, are necessary? An argument against this is the lack of visible benefits in the form of increased revenue or reduced costs before and after their consolidation or disintegration. Hence, there are concerns that the only source of savings may be a reduction in employment. Such a view does not take into account very important motives in a market economy, including the ownership-shareholder sphere, technological changes, and organizational adjustments. All of them constitute an inseparable, interdependent, and constantly conditioning set that forms the basis for adaptive actions. The anticipated, expected image of the future, finding legitimate support in the development of new technologies, the behavior of investors, and leading companies in the world, is a determinant for modifying the way of managing also in our country.
One of the most dynamically developing branches of production in the world today is computer manufacturing. In its initial stage, production had to be highly integrated, as the devices on the technological line were improved depending on the method of production and vice versa. No independent supplies of operating systems, memory cores, or logic circuits were possible, as a significant key to the subsystems also had to be interdependent innovative progress. The product life cycle influences the organization of manufacturing. When a product is not perfect enough, company integration occurs, which is a critical condition in competitive struggle.
The automotive, photographic, petrochemical, and steel industries, as well as banking, developed similarly. Competitive struggle consisted of creating a product of the best possible quality. Integration also provided an advantage in maximizing profits. IBM, the most integrated computer company, achieved 95% of profits with a 70% market share. Similarly, in the years 1950-
70, General Motors generated 80% of profits with a 55% share of the US automotive market. Most IBM and GM suppliers, by contrast, survived year after year on mere “starvation rations”.
This picture changed diametrically when products appeared in the computer industry that exceeded consumer expectations in terms of quality. “Quality overshoot” occurred. This created the potential for innovative companies to enter a different level of sales with so-called “disruptive technologies”. Production and sales became cheaper, simpler, with the possibility of using traditional service. The doctrine of “disruptive technologies” is linked to the previously known model of forecasting production changes that outpace customer needs.
The article comes from the magazine “Logistyka” 4/2003.