Incentives Based on Meeting Strict Quantitative Targets Are a Common

question 19

Multiple Choice

Incentives based on meeting strict quantitative targets are a common organizational requirement for which of Porter's generic competitive strategies?

• A) cost leadership
• B) differentiation
• C) cost leadership focus
• D) differentiation focus
• E) collusion

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Definitions:

Derivatives Market

A financial market for securities whose value derives from the value of other underlying financial assets, such as stocks, bonds, or commodities.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Futures Markets

Exchanges that facilitate the buying and selling of futures contracts, which are agreements to buy or sell assets at a future date at a predetermined price.

Leverage

The use of borrowed money to increase the potential return of an investment, which can also magnify the potential loss.