| “My Chair focuses on industries. Industries are
collections of companies that sell similar products
or use similar production processes. Examples vary
from software companies to hairdressers, fast-food
restaurants and oil refineries. Important discussion
topics are issues such as the structure of industries,
the behaviour of companies as well as their
performance. Structure encompasses matters such
as the level of market saturation, whether or not
there are accession barriers and whether
companies have influential customers or suppliers.
It matters quite a bit whether an industry or
market consists of only one large company
(monopoly) or of many hundreds of small
companies, just as the nature of an industry that
sees many companies come and go is very different
from an industry that remains relatively stable in
that respect. Also, suppliers and customers (being
large parties on the market) wield a certain power,
which might influence industrial developments as
well. Competition authorities, for example, will
censure mergers and take-overs in industries which
are already quite concentrated, hardly allow any
other companies to accede and deny market power
to their suppliers.
Company behaviour ranges from innovation to
pricing and advertising policy, cooperation and
even cartel formation. Companies either do their
best to adapt to their environment or adapt their
environment to themselves (for example through
take-overs). The behaviour of companies usually
changes as industries evolve, whereby
entrepreneurship (i.e. setting up new companies or
projects in existing companies) is a determining
element of company behaviour within industries.
This differs quite a bit from economy to economy,
region to region and industry to industry. Some
behaviour, such as cartel formation and the price
badgering of smaller competitors, will be
scrutinised by the competition authorities and, in
some cases, be fined and even banned.
The performance of industries might be measured
by the level of innovativeness, profitability,
efficiency and creation of employment. This has
both a static and a dynamic aspect, in the sense
that, for example, government support to large
loss-making companies saves jobs in the short run,
but will in the long run only be putting off the evil
hour, and end up being an ill-advised investment as
it runs counter to the market developments.
The deciding factors of innovativeness in
companies is an important subject, which has
internal as well as external organization aspects
such as the level of competition and the availability
of venture capital for starting entrepreneurs.” |
