The Strategy, Operations, and Organization of a Firm Must All

question 30

True/False

The strategy, operations, and organization of a firm must all be consistent with each other if the firm is to attain a competitive advantage and achieve superior profitability.

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Definitions:

Variable Costs

Expenses that change in proportion to the level of production or business activity.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Contribution Margin

The sales price minus the variable costs of a product, indicating how much selling one more unit adds to profit.

Variable Costs

Costs that vary directly with the level of production or volume of output, such as raw materials and direct labor.