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Analysis of organizational boundaries: A case study of the automotive industry

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  1. The characterization of the evolution of the structure of the French automotive industry since the mid 1980s
    1. The relationship between manufacturers and suppliers
    2. The change
    3. Increasing international competition and the introduction of the single market
    4. The idea of supplier partner
    5. The face of the automotive industry
  2. Evolution in the aviation industry and cooperation between companies in this industry
    1. The technical performance
    2. The French aerospace industry
    3. Expenditure on R and D
  3. The definition of outsourcing and power relations
    1. The new generation of sub-contractors
    2. Outsourcing
    3. Power relations
  4. Organizing cooperation in an upstream, and downstream route between competitors
    1. The distributors
    2. The cooperation between Renault and Matra
  5. Factors that explain the evolution of automotive industry in France and worldwide and a prioritization of factors
  6. The theory of transaction costs and an analysis of this evolution
  7. Business networking

Until the sixties the French automotive industry was operation on the principle of industrial integration. Gradually, however the industry was be inclined to break this mode of operation in light of the transformation of the market and the pressure it brings with it. Automobile manufacturers increasingly began to choose to outsource some part of their manufacturing activities to subcontractors.

The relationship between manufacturers and suppliers thus entered a phase of change. Until the late 70's, the manufacturer had total domination over the suppliers.

[...] Faced with increasing demand, companies are often faced with the choice between "making" and "making do." Recent developments in the outsourcing industry led to a reorganization of back-office operations to improve competitiveness. The figures released indicate that several changes were made in the outsourcing sector. The largest share of outsourcing today is in the automobile outsourcing sector. of sales 30% of the value added and 71% of staff working in the automotive industry belong to automotive subcontractors. The new generation of sub-contractors will face more and more complex tasks set by companies who are becoming increasingly demanding with respect to association before the project, responding to a set budget, financial strength, and selection on the basis of quality, competitiveness, innovation and logistics. [...]

[...] The peculiarity of this industry lies in the fact that they sell their product directly to the end users. However even this aspect is now undergoing a change. So far, the distributors could be classified into a network of actors namely the branches, subsidiaries, franchises and agents. They were each subject to different laws. Each of these distributors had all a direct link with the manufacturer whether contractual or capitalistic. This position tends to be susceptible to change in particular with the European Union. [...]

[...] Bilateral governance has evolved in a way that ensures that the autonomy of the parties is maintained. Companies operate through grouped partnership agreements, subcontracting agreements and alliances. The automotive industry has evolved and changed its method of operation through partnerships with OEMs, to make optimum use of outsourcing and create ad hoc alliances between manufacturers. Question Business networking A corporate network is a set of enterprises and economic actors involved in the realization of joint projects. It operates primarily on the basis of alliances and partnerships. This includes a business network driver [...]

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