The Potential Disadvantages of the Virtual Corporation Concept Include the Following

question 127

Multiple Choice

The potential disadvantages of the virtual corporation concept include the following:

• A) It permits greater flexibility than is associated with more typical corporate structures.
• B) Virtual corporations form a network of dynamic relationships that allows them to take advantage of the competencies of other organizations.
• C) This form of organization increases the security of long-term employment for employees.
• D) Virtual organizations may reduce management's control over the corporation's activities.
• E) It reduces the potential for opportunistic actions by partners.

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Definitions:

Administrative Costs

Expenses related to the general operation of a business, including office management, clerical work, and executive salaries, that do not directly contribute to production or sales.

Sales Organization

A sales organization is the structure of the team within a business that is responsible for selling the company’s products or services, including roles, policies, and strategies to achieve sales goals.

Duplication Of Selling

The strategy of selling the same product or service multiple times or through various channels, often to maximize profit or market penetration.

Consultative Selling

A sales approach emphasizing the identification and addressing of customer needs and problems, establishing a consultative relationship rather than making a direct sale.