It Would Be Simply Too Costly for an Airline to Pursue

question 54

Multiple Choice

It would be simply too costly for an airline to pursue a backward integration strategy and enter the airplane manufacturing business. Which of the following theories for explaining a firm's competitiveness is most likely to give executives such insights?

• A) Resource-based theory
• B) Enactment
• C) Transaction cost economics
• D) Environmental determinism
• E) Institutional theory

---

Definitions:

Restricted Fund Method

An accounting principle used by non-profit organizations, where donations or grants are kept in separate accounts and are spent only according to donors' stipulations.

Capital Fund

A financial resource that is used for the purchase of fixed assets or for significant investment in a business, not consumed in normal operations.

Restricted Contribution

A donation given to an organization with explicit limitations on its use by the donor.

Fixed Assets

Fixed assets, also known as non-current assets, are long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash within a year.