THE WORLD ECONOMY

INTEGRATION.

Integration can be defined as the coming together of two or more firms in order to form a larger firm with there joint factors of production. An example of integration is the coming together of Master Card and Visa to form a unify front and an economic giant.

BUSINESS MERGER.

It is the coming together of two or more formerly owned independent firms to form a united firm.

ABBEYS THEORY ON INTEGRATION/BUSINESS MERGER.

Integration/Business Merger should not be accommodated in all forms of economy and country, and this implies that, the rate of integration and merger should be at the rate of 20% in every standard economy, so as to avoid the listed problems below. And in an underdeveloped economy the rates should be 7.5%

WHY

• low standard of living
• monopoly
• unemployment
• corruption
• lack of competitive market
• discourages specialization
• high tax
• high rate of corruption
• low gross national product(GNP) and gross domestic product (GDP)
• high value added tax (VAT)

AN ECONOMY WITHOUT MERGER/INTEGRATION

For example:

Population: 500,000

Firms: 50,000

Working class: 150,000

Income: 20/25%, due to high rate of capitalism and adequate jobs.

With time after the combination and effective use of economic resources production will increase and might also multiply it all depends on the market situation, with help of international committees the economy of this country might just evolve into a mega house of production.

GENERAL ECONOMIC ADVANTAGE WITHOUT INTEGRATION/MERGER

• affordable value added tax (VAT) due to the number of firms
• evolvement of currency due to good economy
• competitive market, due to evolvement and appreciation of the economy
• strong foreign policies due to the respected economy of the country
• low liabilities because of high income per head
• high income per head
• high GNP and GDP,due to stable economic growth
• affordable housing

GENERAL ECONOMIC SITUATION WITH INTEGRATION/MERGER

Population: 500,000

Firms: 50,000

Working class: 150,000

Business/business merger

Due to the amalgamation of firms or some probability of 80%

Calculations = 36,000 firms /2 = 18,000 firms

18,000 + 14,000 = 32,000 firms (left)

GENERAL/ECONOMIC DISADVANTAGES

• unemployment
• poverty
• corruption
• discourages specialization
• high value added tax (VAT)
• depreciation of currency
• weak foreign policies
• dictatorship
• underground control of other government officials
• high death rate
• unstable economy
• inflation
• low GNP & GDP

INTEGRATED/BUSINESS MERGER EFFECTS ON AMALGAMATED FIRMS

• different ethics/style of doing things or executing business
• loss of specialized workers dedicated to particular post
• branding
• partial competition of superiority during the first years of amalgamation
• organization of new board
• lack of effective business management
• loss of both firms independent license

INTEGRATION/BUSINESS MERGER EFFECTS ON GOVERNMENT

• High VAT: mass protest: strike
• Economic instability
• Tied and enslave by owed countries
• Effect on foreign policies due to the liability of the state
• Ineffective legitimacy and sovereignty
• Migration
• Corruption

ABBEYS STYLE OF CALCULATING INTEGRATION/MERGER, OVER POPULATION CURVE

Population: 75%

Resources: 15%

In a very unstable situation like this with low resources and high population

National income will: fall, which will lead to extinct poverty= darffur

Formula=firms/2 + population+ liability – Resources= extinct low standard of living =POVERTY.

ABBEYS CRITICS

• Communication: the member of the new aligned firms cannot communicate well due to the fight of supremacy
• According to Abraham Maslow a want satisfied cannot motivate you again, integration/merger has been a want but now satisfied and ABBEY, THEORY STATES: Integration/merger should not be accommodated in underdeveloped and in developing and developed countries should be reduced……………………..

ABBEY THEORY ON INTEGRATION/BUSINESS MERGER…………………………