Vertical integration involves deciding whether to "make or buy."

Group of answer choices

True

False

Flag question: Question $2$

Question $21$ pts

A firm engages in forward vertical integration when it incorporates more stages of the value chain within its boundaries and those stages bring it closer to gaining access to raw materials.

Group of answer choices

True

False

Flag question: Question $3$

Question $31$ pts

A custom t$-$shirt company decides to contract with a foreign supplier to source standard plain t$-$shirts $($aka the 'raw' materials they then use to make their custom product$).$ They find that the shipments were of inferior quality. In terms of vertical integration, this new information would lead you to recommend:

Group of answer choices

For vertical integration, in order to reduce monitoring costs

a$.$ Against vertical integration, because markets are efficient

c$.$ For vertical integration, in order to circumvent hold$-$up problems

Flag question: Question $4$

Question $41$ pts

Your company has a resource that is not VRIO within your current industry but would be VRIO in an industry that supplies inputs to you. In this case, backwards vertical integration may lead to a sustained competitive advantage.

Group of answer choices

True

False

Flag question: Question $5$

Question $51$ pts

Netflix wants content that is specifically tailored to its existing platform $($colors$,$ clickable links, binge$-$able$).$ They have trouble finding a production company to supply the content. This is most likely because:

Group of answer choices

Netflix is susceptible to hold$-$up

The production company is susceptible to hold$-$up

Netflix does not have VRIO capabilities for operating in content production

The production company does not have VRIO capabilities for operating in streaming

Flag question: Question $6$

Question $61$ pts

Economies of scope refers to the idea of a proportionate savings generated $($i$.$e$.,$ economic value generated$)$ by producing $2$ or more distinct goods at a cost that is less than producing each of the goods separately.

Group of answer choices

True

False

Flag question: Question $7$

Question $71$ pts

One reason internal capital markets may function better than external capital markets is that senior executives may have better information than investors do$.$

Group of answer choices

True

False

Flag question: Question $8$

Question $81$ pts

Which of the following is a good choice for a manager interested in fostering the cooperation of two division heads?

Group of answer choices

Providing a bonus based on company performance

Providing a bonus based on division performance

Flag question: Question $9$

Question $91$ pts

Why can it be hard for CEOs to get managers to cooperate in an M$-$form organization?

Group of answer choices

because it should be a U$-$form organization

because of the agency problem: managers have their own agenda and incentives and unless those are aligned with the company's agenda the managers may not cooperate

because they are incompetent

Flag question: Question $10$

Question $101$ pts

Operational economies of scope..

Group of answer choices

None of the options

refer to a need to maintain flexibility

refer to sharing capabilities$/$activities across different areas within a company