Md. Rabiul Islam Rabi

M. C. Shukla, “A combination is said to exist when two or more units are operated or controlled by one ownership interest”.

R. K. Sharma, “Business combination is a method of economic organization by which a common control, of greater or lesser completeness, is exercised over a number of firms which either is operating in competition or independently”.

L. H. Haney, “To combine is to become one of the parts of a whole, and combination is merely a union of persons to make a whole or group for th prosecution of some common purposes”.

Objectives of Business Combination
1. Reduction of competition
2. Increasing financial ability
3. Benefits of large organization
4. Continues production
5. Maintaining self existence
6. Balancing demand and supply
7. Creating pressure on government
8. Attaining highest profit
9. Reduction of cost
10. Expunction of market

Causes of Forming Business Combination
1. Elimination of competition
2. Reducing production and marketing costs
3. Advantages of large scale production
4. Increasing competitive strength
5. Balancing between demand and production
6. Effect of trade cycle
7. Rise of joint stock company
8. Technological progress
9. Reduces government pressure
10. Research and development

Advantages of Business Combination
1. Benefits of large scale business
2. Increase large scale production
3. Large amount of capital
4. Efficient management
5. Maintaining price stability
6. Eliminating the competition
7. Crating employment opportunity
8. Development of efficiency
9. Expunction of business
10. Benefits of shareholders

Disadvantages of Business Combination
1. Excessive capital
2. Complexities in management
3. Increase monopoly business
4. Increase price product price
5. Reduction of efficiency
6. Reducing morale strength
7. Emergence of speculation

Classification of Business Combination
1. Horizontal combination
2. Vertical combination
3. Lateral or allied combination
4. Circular combination
5. Diagonal combination
6. Regional combination

Contributor: Md. Rabiul Islam Rabi, Assistant Professor (HRM)