In Which of the Following Cases Are Bureaucratic Costs Likely

question 67

Multiple Choice

In which of the following cases are bureaucratic costs likely to be lowest?

• A) A vertically integrated company with five divisions that pursues full integration
• B) A company with five divisions that pursues related diversification based on economies of scope
• C) A company with five divisions that pursues related diversification based on transferring competencies
• D) A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring
• E) A company with twenty divisions that pursues taper integration

---

Definitions:

Buying Center

The collective of individuals in an organization responsible for making procurement decisions, each with specific roles and responsibilities.

Purchase Decision

The process of evaluating and deciding which product or service to buy based on various factors.

Product Shift

Changes in a company's product lineup, often involving the introduction of new products or the discontinuation of existing ones, to adapt to changing market demands or strategic focuses.

Customers' Needs

Refers to the requirements and desires of consumers that a company aims to fulfill with its products or services.