1982-11-16 — Page 35

育教僑頁三第張九第

日二初月十年戌壬曆夏

WAH KIU YAT PO

報日僑華

of integration:

1983

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Economics ()

K.K. Wong & L.T. Chan

Mill & Dale Press Ltd.

1. Disscuss the economies.

of large-scale production and explain why some small firms still

exist.

Beononies of large-scale production can

achieved when output increases, the average cost of production tends to fall over normal

of output, The following are some of the main economies of scale enjoyed by large- scale production.

ranges

Economies in the use of factors. of production

The total costs to output increase less than

proportionately for a large output than a smaller

one. Since large scale production may need more

labour force, a greater division

of labour. will most probably be employed. Consequently, the

average output

per man-hour can be expected to rise and qualified specialista can be întroduced,

In

2

addition, a larger firm will attract more efficient la- bour because it can

offer its

employees better

propects of promotion to higher-paid posts. Greater division of labour also enables a more capitalistic method of production and the employment of more specialized machinery, Large scale of⠀ productuon enable

the economical use" of its materials, for

what might be waste to a small firm can often be used by a large firm in the manufacture of by-products.. (b) Economies of

administration As far as.. economies of

adiministration is concerned, due to increase: in division of labour, a larger firm is able to attain a more efficient use of labour and

better management methods.

(c)Marketing economies

It is generally the case that large firm can buy more cheaply than a small one

for it

buys new materials component parts, etc.. In bulk... Hence it the qu discount for large purchases, Similarly, a large retailer

can buy directly

from the producer at a lower price

than that charged.

by the wholesaler. As far

as

advertising and

promotions" are. concerned, a large

firm is able to afford a high apending on these items than a small firm

Economies in

finance

Large firms generally are considered to be safer borrowers- by the banks,

thus the they can borrow money from banks at

lower rate of interest.

(e)Economies in

research

Large firms again have advantages over the small, for

they can set up their own research departments, have their own

laboratories, and can employ a large number of trained research workers. In this way, a large firm is able to study -

betterments for the company and innovate products for the company's growth N (f)Economies in

welfare

extensive

A large firm financially able to provide long- run 2 welfare facilities

and improve the working conditions for its employees. Even though large firms can enjoy the advantages through large.

scale production, the fact that small firms still survive indicates the

following reasons: (a)Tue size oi

the business tends to be small where (i)the work involves

the provision of direct Servi

ce

doctors,

for instance o

accountants, dentists. (i)the work can be

done by craftsmen e.g. in tailoring (iii)a personal

service is provided such as that of the demestic plumber or electrician. Sone times, many small retailers can survive because they have been able to give personal attent ion to the particular requirements of

their own group of customers who are willing to pay little more for this service,

(c) Small firms are just

right in supplying enough quantities when there is only. a limited demand för

a commodity in the market.

(d) In some forms of

production, costa quickly start to rise as production expands, and so the most economical unit is the small. firm, or in other words, the opti

í um

size of the firm should be small,' What are the different types of integration? State the advantages and disadvantage

of

integration, There are distingishable types

(1) Horizontal

integration

A horizontal

integration results from the

combination of 2.

or more firme that. sell in the same line of busine95.

Since a horizontal integration combines competitors together, it increases the degree

of industrial concentration and tends to contribute to a reduction of competition within an industry.

(2)Vertical

integration

A vertical integration results when one of the firma in the combination. supplies the other with an important service of intermediate product. The integration of a paper mill with magazine. 19. such an example. This type of integration gives a company pore control over its. distribution and purchasing, Even though the firms involved are not direct competitors, a vertical integration

sometimes resulta

a considerable reduction of competition by providing a way for a firm to hold substantial control" in one market to spread its control te another.

(3)Conglomera te

Integration

A conglomerate.

integration results

when firms that

are in distinct, often

unrelated,

industries combine

together. The

integration of a

steel manufacture

and a cigarette company

is an example.

Although a

conglomerate integra tion is less likely

to influence

competitive conditions than either

horizontal or vertical integration it can still reduce the scope of competition when the two firms integrated are strong potential competitory or are important customers, of each other. Advantages of Integration

Integration can bring about operational efficiency and reduce the cost of production, Thus the customers can benefit by paying a lower price as a.. result of

integration, Excessice competition. can be eliminated through integration. and wastage of - valuable resources can be avoided. Also, when small firms. integrate together to form a single large firm, the economies of large-scale

production can be obtained. More

chance and wider scope for improving quality, standardization and

research facilities for products can be. realized through. integration of firms 2 Likewise, integration. may increased

coordination between

different stages of production and

substantial increase

in output can be

achieved.

Disadvantages of Integration

Integration

can..

二期星

create many new problems which the original

firms are unfamiliar with or difficult to

tackle with. Also, since integration can result in operational efficiency, redundant labour will have to be dismissed and this can pose a serious

problem especially in

countries where⠀⠀⠀ unemployment is already crition Even though the

integration in general can reduce risks and Alertainies for

production, the organization formed pay be too complex and too large to manage Thus, worse

coordination instead of better coordination between various stages of production may arise.. Combination of firms: likewise can reduce competition and increase concentration as well as monopoly power. Concentration is especially a

problem when the industry is very critical to the country concerned. The decline of collapse of a big firm in süch an industry may put a large number of workers. out of job and push the related industries into difficulties, A depression or mass unemployment may thus

On the result. other hand, monopolistic power can bring harm. to the consumers if the large firms decide

to charge higher

prices in order to realize more profits.

1983

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History (8)

Philip YL. Woo

Mill & Dale Press Ltd

Last time we discussed about the origin and weaknesses of the Weimar Republic, that is, Germany 1918-1933. In 1933 Hitler rose to power and started to build a dictatorship,. putting an end to the Weimar Republic. There were many reasons for the failure of the Republic and the rise of Hitler. One-of- them was concerned with the weaknesses of the Republic (which we discussed last time.) 1. Early career of Hitler

(a)In 1921, Hitler

became leader of the Nazi Party, The. Party was hased at Munich of Germany. Hilter began to establish party branches in other places. (b)In 1923, the Nazi Party attempted a revolt at Munich. It was known as the "Beer Hall Putsch" (A putsch is a revolt.) Its failure resulted in Hitler being. arrested and sentenced to 5 years' imprisonment,

was-released

but he

日六十月一十年二八九一公年一十七國民鞌

after 9 months.

(c)Knowing that it was

difficult to

overthrow the

Weimar Republic by

armed force, Hitler tried the other method-winning more followers (i.ca Nazis) and power in legal ways. However, the Nazis never hesistated to use violence as an illegal method against enemy. parties.

(d)Before 1925, Hitler

depended on the Socialists for support. After that, he allied. with the German. People's Party,

an extreme rightist

(e) In.

tation.

Hitler

wrote the Mein Kampf (My Struggle), In it he outlined. his programme for obtaining power and making Germany strong agains

Union of all Germans in central and

East Europe to form a greater Germany.p

including

Germans in

Austria, the Sudentenland (in Czechoslovakia), eted.

ii. Abolition of the

Versaïlles Treaty, for example, the end of reparations, the return of the former German colonies, and rearmament,

iii. Anti-Semitism,

that is, anti- Jewish measures

iv. Anti-Communism Lebensraum (living space) in East Europe conquering countries there

and colonizing them for the

German people

to settle in.

The rise to power of

Hitler, 1930-1933

(a)The Great

sion of

hit Germany

Unemployment grew rapidly. The

coalition govern ment fell from

power, and President

Hindenburg. began using his special powers (that enabled him to appoint a cabinet without the

parliament's support in times of emergency). He appointed Bruning as Chancellor, even though Bruning did not enjoy support in the Reichstag (parliament).

(b)Many German people lost confidence in moderate parties and began to vote for extremist parties (ie, the Nazi Party and the Communist Party). By mid-1932, the Nazis became the largest party in the Reichstags obtaining 36% of all the votes. It was followed by the Social Democrats and Communists,

(c)Papen was appointed Chancellor (follow- ing Bruning) in May 1932. Like Bruning,. he could not get

support from the

Reichstag and had

to depend on the President's emergency powers for staying as Chancellor,

(d)As the political

situation grew worse (1.e. moderate parties failed to find support among voters for forming

a government),

President Hindenburg and other people thought of using Hitler's popularity to form a govern- ment while still. retaining real power from behind the scene

(e)Hitler was

appointed Chancellor in January 1933. Papen became Vi Chancellor.

(f)Nightists like

Papen and a few military leaders: thought that they could tame Hitler and control him. like a puppet. But soon Hitler got rid of them all. and created a dictatorship.

Reasons

success

The

the

Hitler

,rjou

akuesses of Lie Weimar Republic were the first reason. (They were discussed In detail last-time.) b)Serious

economic problems increased the popularity of the Nazis. More and more Germans

int

lost confidence

the ability of moderate parties in overcoming these economic problems. The Nazis obtained many votes.

(c) Hitler promised

a glorious and strong Germany for patriotic Germans. As it was noted last time, the roots of democracyTM we're shallow in Germany. Many Germans were willing to give

up democracy

for

and

(as Germany's enemies were democracies, example, Britain France, and welcomed a dictatorship if the dictatorship could make Germany strong: again.}

(d)Hitler had personal

qualities that appealed to many Germans. He could

persuade peopl

with violent.

speeches. And he skilfully made use of propaganda to influence people. (e)Leftist parties

failed to unite against Hitler and prevent him from obtaining power. The USSR forbade German communists to ally with the socialists to defend against the Nazis, (I)Rightists like Papen

underestimated Hitler. They thought they could make use of him to gain support. However, Hitler made use of then instead, for indeed it was the rightists who invited Hitler to become Chancellor in early 1933.

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