Full Vertical Integration Compounds Risk Because

question 2

Multiple Choice

Full vertical integration compounds risk because:

• A)Top managers have a complete knowledge of the entire value chain
• B)The capital invested and the fixed costs are often much higher for a vertically integrated firm
• C)A decline in sales and profits in the end market affects all stages simultaneously
• D)Both b and c above

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Definitions:

Theological Stage

The earliest stage in Comte's law of three stages, characterized by human understanding of the world as explained by supernatural beings and religious leaders.

Metaphysical Stage

A phase in Auguste Comte’s Law of Three Stages where human thought is dominated by abstract and speculative reasoning, seeking the essence of phenomena rather than their physical or empirical properties.

Positive Stage

A term in sociology introduced by Auguste Comte referring to the final stage of societal evolution where explanations of phenomena are based on scientific observations, experiments, and logic.

Political Revolution

A fundamental and rapid change in political power or organizational structures that occurs when the population revolts against the current authority, often leading to social transformation.