objectives of business combination

objectives of business combination :-

Following are the objective of business combination. I am explain all the business objectives in points 

Stable price :-

The purpose of combination is stability in price level. The combination is made by business owners for keeping prices at same level. The supply is usually controlled by combining units.

Use of idle resources :-

The idle resources of country can be used for benefit of mankind. The objective can be achieved through ample capital funds. The combination of many business units means collection of large funds. The combination of the many business units means collection of large funds which are used to manage large scale business.

Reducing expenses :-

The objective of combination may be to lower the expenses. The expenses can be reduced due to purchase discount, common, advertising, low transport cost, common management are reduction of waste due to efficient operations.

Increase credit standing :-

The objectives of combination may be to increase the credit standing of the business units among the banks and other lenders. There is increase in the value of assets due to combination.

Use of technology :-

The business combination provides ample resources for purchase of technology. The purpose of combination may be to purchase modern machine and better methods of production.

Expert management services :-

The business combination may be made to hire expert services. The combination is necessary to obtain the benefits of common management.

Economics of large scale :-

The economies of large scale can be achieved through combination of many business units.

Leadership :-

The business combination provides leadership to the people who have the ambition to become the boss. They know that there is a great respect for leaders. The ambition for respect becomes the basis of combination.

Stability of business :-

The combination provides stability to the business units in times of depression and recession. The business can produce and sell goods for a number of years at the same level.

High profits :-

The purpose of many business units is to earn profit. The combination may be to increase the rate of profit. The elimination of competition is necessary to raise the rate of earning.