The Structure of a Firm Typically Has Almost No Effect

question 98

True/False

The structure of a firm typically has almost no effect on its strategy.

---

Definitions:

Direct Materials

Raw materials that can be directly linked to the production of finished goods in manufacturing.

Fixed Overhead

Fixed Overhead refers to the consistent, non-variable expenses incurred by a business, regardless of its level of production or sales activities.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportional relationship between fixed and variable costs.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, used to cover fixed costs and profit.