Boundaries of the enterprise
From CEOpedia | Management online
We can distinguish following forms of boundaries of the enterprise:
- limits to the integration of up-stream flows (upstream integration boundary) is tied up to decisions to make or buy materials or resources, which are used by the unit to carry out the tasks in the manufacturing process,
- limits to integration in down-stream flows (downstream integration boundary) is related to the scope of services offered to the customer (both to the ultimate purchaser, as well as the next link in market flow),
- limit of integration in diversification of products (product integration boundary) - concerns ranges and types of products, which company intends to produce,
- limits to infrastructure integration (infrastructure integration boundary) - managers must decide on allocation of infrastructure elements on which the company will invest, which will be made available by other cooperating entities,
You should also pay attention to a different approaches to the boundaries of the enterprise:
- vertical boundaries - within the enterprise, between levels in the organizational structure and between the ranks of individual posts and persons involved,
- horizontal boundaries - within the enterprise, between functions and activities,
- external boundaries - between company and suppliers and customers,
- geographical boundaries - between locations, between companies and markets, cultural boundaries
- Ashkenas R., Ulrich D., Jick T., Kerr S. (1998), Boundaryless Organization. Behind the Chains of Organizational Structure, Jossey - Bass Inc. Publishers, San Francisco
- Philpott E., Hamblin D. J., Baines T., Kay G. (2004), The use of models and methods of strategic planning: Towards a holistic view of strategy, International Transactions in Operational Research, vol. 11, International Federation of Operational Research Societes, Blackwell Publishing Ltd.
- Rajan, R. G., & Zingales, L. (2000). The governance of the new enterprise (No. w7958). National Bureau of Economic Research.
- Stace, D., & Dunphy, D. C. (2001). Beyond the boundaries: Leading and re-creating the successful enterprise. McGraw-Hill.