NETWORK OF COMPANIES
Precisionet emerges from the Emilian districts
Business network: origins and the first law
Business networks, a form of association aimed at starting technological and commercial collaborations, are a relatively recent thing. In Italy, they were introduced by Law No. 33 of 9 April 2009. However, the concept of company networks has its roots in social anthropology with the study of “social networks” in non-corporate settings. It was not until the 1950s that the network “system” actually became a subject of analysis, arousing the interest of scholars from other disciplines, including economics in the field of management and business studies. These scholars saw networks as opportunities to achieve competitive advantages by implementing economies of scale and scope. Studies and analyses have continued to this day, and interesting contributions have been made, supported by recent case histories.
An advanced system
The market and businesses are said to be the two extremes of a continuum comprising various intermediate forms that largely correspond to networks, intended as stable forms of contract. The network structure is well suited to achieving flexible management, thus improving performance in general. Economists and scholars involved in organisations see network architectures as a means of reacting to the changing environment and markets, which is able to tackle new and constantly emerging demands.
Successful networks are set up in industrial districts
If we step back in time to the post-World War II period, it is worth mentioning that highly specialised production areas had begun to develop in Italy, in which small and tiny businesses with considerable skills, specialising in one or several stages of the production process were emerging. By working closely together, they were able to successfully rebuild the entire industry. Advantages such as geographical proximity, which had encouraged the exchange of knowledge within the district and strong subcontracting relationships, later became limitations, especially from the 1990s onwards: many manufacturing districts clung to their roots and did not adapt to the fast-changing market and globalisation.
By contrast, in the districts that remained active, the management of several companies had to make a choice for survival, namely, if it was more profitable to develop the resources, means and components required to meet increasingly complex demands in-house, or to turn to the market by setting up network architectures based on cooperation. Within them, interdependencies and synergies are geared towards achieving common goals, opportunities and benefits. With its history of extensive relationships and know-how, the district laid excellent foundations for such networks to be established.
This is our case: Precisionet was founded in an area comprising at least three major manufacturing districts: first of all, that of motors, known as Motor Valley, which originated 70 years ago, whose allied industries have allowed the districts of mechanics, hydraulics and, more recently, electronics to flourish and become strategically important, while the plastics and food districts developed independently.
Reasons for adopting the Network approach
Corporate organisations today are operating in increasingly uncertain and fluctuating environments, characterised by non-linear growth trends that are often hard to predict or undergoing changes in scale. The situation is worsened by recent raw materials shortages, price rises and commodity market volatility, also due to speculative phenomena and spillover effects, in which imbalances tend to spread from one market to another. In this situation a network of companies has more negotiation power; it can exchange information and other resources to adapt to environmental contingencies.
Advantages of Precisionet
Cars and motorcycles
Cars, Goods vehicles, Cranes
Agriculture vehicles and earthmoving machinery components
Food Beverage and Packaging
Energy and Lighting
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