Corporate Governance Free Essay, Term Paper and Book Report
Excess Capacity- CertainTeed Corp.-Trent Boldra
In order to understand excess capacity, it is important to understand what happened in The Second Industrial Revolution; a time when there was rapid growth in productivity and living standards, there was a large formation of corporate hierarchies, overcapacity, and finally the closure of facilities. As productivity skyrocketed the prices dropped which led to excess capacity. This causes a situation in which production is less than what is actually achievable for a firm, meaning that demand for the product is lower than what the company can supply.
There are four ways in which excess capacity can happen;
1. Market demand falls below the required to yield returns (demand reduction)
2. capacity expanding technological change
3. obsolescence creating change
4. When competitors rush to implement new highly productive technologies (then the investment can be greater than supported by demand in the market.
Companies are then forced into mergers or acquisitions. CertainTeed Corp, part of the Saint Gobain Group of Paris, has recently......
Word Count: 3440
Page Count: 13.7 (250 words a page / double spaced)
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