Chapter 12
Subsidiaries and subcontracting

In this chapter, we will return to the structure of organizations, already outlined in Chapter 8.

Until now, within the limits of the organization, we have only set a desired number of around 100 people, specifying that a significantly smaller or larger number had to be justified by particular constraints.
We also indicated that we seek to limit the hierarchy. For this, we have defined only three management functions which are the president, the director and the treasurer.
The structure of this workforce remains to be clarified. In other words, do we favor horizontal integration, with consequently massive subcontracting, and a workforce whose activity is largely uniform, or vertical integration where subcontracting is less, but at the risk of economies of scale? less on the core of the activity.

The general objective set at this level is, within the framework of a workforce if possible of around a hundred people, not to specialize the activity beyond what is necessary to obtain a satisfactory productivity. In other words, if around ten people are sufficient to obtain satisfactory productivity in the core business, we will seek to integrate as many support functions as possible to limit subcontracting, and vice versa if the economies of scale are significant beyond that. around a hundred people, we will concentrate the workforce on the core business and we will have greater recourse to subcontracting on ancillary functions to limit the total workforce.

We will see in Chapter 16, which will present the structure of the tax, that there is a VAT on subcontracting, to limit the interest in subcontracting when this is not accompanied by a significant productivity gain. on the core business.
We will also see in Chapter 17 that the financing system that we propose eliminates the interest of any notion of subsidiary.

Here we end the second part of this book. However, to understand the concrete functioning of the organizations, you must also have read chapters 13 and 17 which explain their financing.