Number Of Enterprise Business Unit And Cost Advantages Relationship Study

On its contents, business unit quantity is not a new concept, and the concept is very close to that of enterprise border in business economics. In the article, each operation or activity unlike other categories of enterprise can be regarded as a business unit. In Activity-Based Costing of management accounting the number of types of operations can be seen as another business unit manifestation.Whether business unit quantity of enterprise is connected with enterprise's economic efficiency or cost advantages? Whether business unit quantity of enterprise has certain characteristics of scale economies? This is a very valuable economic proposition. Analyze and explain the relations between business unit quantity of enterprise and cost advantages, through the example confirming the proposition "The greater enterprise vertical scale is not economical", will have the significant contribution to the business economic theory. At the same time this viewpoint will also have the significant guiding meaning to the business management domain.In the arrangement of contents, the article first discusses the definition to "business unit quantity" and the manifestations in various fields. Then discusses the theoretical analysis to the theme with use of transaction cost theory, Activity-Based Costing, cost budget theory, outsourcing strategy and the theory of inspiring and evaluation. Meanwhile through the investigation to WeiFeng cartons industry cluster in ShaanXi, collects the relevant cost data to make analysis to certify the research conclusions from previous theoretical analysis.Finally, the main conclusions of this study can be summarized as follows:Business unit quantity, as a quantitative form of "enterprise vertical scale" in the study, has inverse-change relations between it and cost advantages. Specifically, the more the number of business units, the enterprise will pay greater cost. Conversely, the fewer the number of business units, the enterprise will pay smaller cost. Further, enterprises with more business units are not conducive to the formation of cost advantages. Sometimes a heavy cost burden even exists for those enterprises with more business units. In that sense, the economic proposition "The greater enterprise vertical scale is not economical" is correct. It has scientific theoretical value.The article will use the empirical analysis and comparative analysis methods. Through the investigation to WeiFeng cartons industry cluster in ShaanXi, we collect the relevant cost data to make analysis. In the process of utilizing the theory to explain...