The Capability Building Process

question 30

Multiple Choice

The capability building process:

• A) requires two things: (1)developing the ability to do something,however imperfectly or inefficiently,and (2)molding these efforts into an organizational ability and as experience grows and personnel perform the activity consistently well and at an acceptable cost,it is transformed into a tried-and-true competence and as they continue to polish and refine their know-how into further improvements,they then create a real competitive capability.
• B) entails establishing a new department with the primary responsibility of developing the expertise to give the company the needed core competencies and capabilities.
• C) stands a better chance of succeeding if a company employs a traditional functional organization structure.
• D) is made much easier if a company abstains from outsourcing important value chain activities.
• E) aims at turning the company's distinctive competencies into core competencies.

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Definitions:

Variable Costs

Financial obligations that move in correlation with production levels.

Long-Run Equilibrium

A state in an economy or market where, given the long-term flexibility of prices and adjustment of all input factors, supply equals demand and all firms earn normal profits.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping.

Average Total Cost

The total cost of production divided by the total output, representing the cost per unit of output.