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Multiple Facilities, Strategic Splitting And Vertical Structures: Stability, Growth And Distribution Reconsidered

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  • DAN COFFEY
  • PHILIP R. TOMLINSON

Abstract

This paper explores comparative cost structures when large firms split operations between separate production facilities in a way that puts pressure on wage rates and worker effort levels: one example of a ‘divide and rule’ strategy. It differentiates horizontal structures of this kind based on requirements for stability in a context of growing aggregate production vis‐à‐vis wages and effort. The analysis is formulated within a more general perspective that also considers vertical structures. It considers the implications for contemporary policy debates on desirable industrial forms, and concludes with a discussion of factors that might limit the scope for policies intended to promote industrial stability and redistribution via existing production networks.

Suggested Citation

  • Dan Coffey & Philip R. Tomlinson, 2006. "Multiple Facilities, Strategic Splitting And Vertical Structures: Stability, Growth And Distribution Reconsidered," Manchester School, University of Manchester, vol. 74(5), pages 558-576, September.
    • Handle: RePEc:bla:manchs:v:74:y:2006:i:5:p:558-576
    DOI: 10.1111/j.1467-9957.2006.00509.x
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    References listed on IDEAS

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    1. Morroni,Mario, 1992. "Production Process and Technical Change," Cambridge Books, Cambridge University Press, number 9780521410014.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Decembrie.
    3. Anna Spadavecchia, 2005. "Surviving under the shelter of government subsidies or ‘avoiding disaster’? New evidence from Italian Industrial Districts, 1971-91," Working Papers 5011, Economic History Society.
    4. Giacomo Becattini & Marco Bellandi & Gabi Dei Ottati & Fabio Sforzi, 2003. "From Industrial Districts to Local Development," Books, Edward Elgar Publishing, number 2884.
    5. Best, Michael, 2001. "The New Competitive Advantage: The Renewal of American Industry," OUP Catalogue, Oxford University Press, number 9780198297451.
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    Cited by:

    1. Stephen P. Dunn, 2012. "John Kenneth Galbraith and the Theory of the Firm," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 8, Edward Elgar Publishing.

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