Which of the Following Is a True Statement About Capabilities

question 46

Multiple Choice

Which of the following is a true statement about capabilities?

• A) Capabilities exist when resources have been purposely integrated to achieve a specific task or set of tasks.
• B) Valuable capabilities are based almost entirely on tangible resources.
• C) Capabilities based on human capital are more vulnerable to obsolescence than other intangible capabilities because of the tendency for employee knowledge to become outdated.
• D) The link between firm financial performance and capabilities is dependent on whether the capabilities are based on tangible or intangible resources.

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Definitions:

Vertical Merger

A merger between two or more companies operating at different levels within an industry's supply chain, aimed at creating more synergies or reducing costs.

Competitor

A person or entity that competes with another, particularly in business or in the offering of goods and services.

Capital Structure

Capital structure is the mixture of a company's long-term debt, specific short-term debt, common equity, and preferred equity which finance its overall operations and growth.

Leverage

Taking on debt to magnify the prospective profits of an investing activity.