If the Buyer Wants to Motivate the Seller to Manage

question 15

Multiple Choice

If the buyer wants to motivate the seller to manage total costs, the best type of contract is:

• A) firm-fixed-price FFP).
• B) cost-plus-incentive-fee CPIF)
• C) firm-fixed-price plus incentive fee FFPIF).
• D) cost-plus-fixed-fee CPFF).
• E) cost-no-fee CNF).

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Definitions:

Superordinate Goals

Shared goals that can only be achieved through the cooperation of two or more parties, often used to overcome intergroup conflict.

Formal Hierarchy

The structured organizational layout that defines the levels of authority, responsibility, and communication within an organization.

Team-Based Organizational Structures

Organizational designs that focus on grouping employees into teams to accomplish tasks and achieve objectives.

Functional Structures

An organizational format that divides the company based on specialized functional areas, such as marketing, finance, and engineering.