If a Firm Wants to Have More Ownership of Activities

question 89

Multiple Choice

If a firm wants to have more ownership of activities closer to the end product or customer,it should:

• A) Backward vertically integrate.
• B) Forward vertically integrate.
• C) Forward horizontally integrate.
• D) Use a single-business diversification strategy.

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Definitions:

Operations

entails the daily activities, processes, and functions carried out in running a business, particularly related to production of goods or services.

Return on Investment

A measure of the profitability of an investment, calculated by dividing the gain from the investment by its cost.

Cost Centre Managers

Individuals responsible for managing a department or unit within an organization that does not directly add to profit but incurs costs.

Variance Analysis

The process of investigating the difference between planned financial outcomes and actual financial performance.