Question: Some firms have engaged in backward vertical integration strategies in
Some firms have engaged in backward vertical integration strategies in order to appropriate the economic profits that would have been earned by suppliers selling to them. How is this motivation for backward vertical integration related to the opportunism logic for vertical integration described in this chapter? (Hint: Compare the competitive conditions under which firms may earn economic profits to the competitive conditions under which firms will be motivated to avoid opportunism through vertical integration.)
Relevant QuestionsYou are about to purchase a used car. What kinds of threats do you face in this purchase? What could a CEO do to help resolve the conflicts found between functional areas of the organization? One of the reasons why internal capital markets may be more efficient than external capital markets is that firms may not want to reveal full information about their sources of competitive advantage to external capital ...Suppose that the concept of stewardship theory is correct and that most managers, most of the time, behave responsibly and make decisions that maximize the present value of the assets they control. What implications, if any, ...Consider the joint venture between General Motors and Toyota. GM has been interested in learning how to profitably manufacture high-quality small cars from its alliance with Toyota. Toyota has been interested in gaining ...
Post your question