If an Organization's Competitive Strategy Relies on Long-Term Relationships with the Clients

question 146

Multiple Choice

If an organization's competitive strategy relies on long-term relationships with the clients who purchase the organization's goods and services,the organization should reward its employees from its executives to its sales staff with incentives based on

• A) quarterly sales.
• B) annual profits.
• C) prices of its stocks in daily trading.
• D) a rolling five-year measure of financial performance.

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Definitions:

User Cost

Refers to the cost associated with the consumption of a good which decreases its remaining value for future use.

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

Marginal Product

The additional output produced as a result of employing one more unit of a particular input, assuming all other inputs remain constant.

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in the production of goods or services.