Question 1

When one firm tries to take advantage of another firm that has made a transaction-specific investment, by causing a brief delay in business because a product has no other use is known as a(n)___.

Accepted Answer

The answer of When one firm tries to take advantage...

Question 2

Activities closer to the beginning of the industry value chain are referred to as _________.

Accepted Answer

A)  middle activities
B)  forward activities
C)  upstream activities
D)  downstream activities

Question 3

In the context of the primary reasons for vertical integration in companies, which of the following statements is true of coordination?

Accepted Answer

A)  The greater the interdependence between activities, the more a company should vertically integrate.
B)  Activities that require high levels of coordination are known to be modular in nature.
C)  The greater the interdependence between activities, the more a company should rely on outsourcing.
D)  Activities that require low levels of coordination are known to be reciprocal in nature.

Question 4

Which of the following best illustrates reciprocal interdependence?

Accepted Answer

A)  Designing and manufacturing nuts and bolts
B)  A golf team
C)  Product development teams
D)  Designing and manufacturing automobile components

Question 5

In the context of the three Cs of vertical integration, some activities require lower levels of coordination than others to be successful because the activities _________.

Accepted Answer

A)  are modular in nature
B)  do not involve huge investments
C)  are not very important in the value chain
D)  are performed by highly-skilled professionals

Question 6

What is the main difference between a company that is vertically integrated and a company that is vertically specialized?

Accepted Answer

The main difference between a company th...

Question 7

In the context of vertical integration, when is flexibility most valuable?

Accepted Answer

In the context of vertical integration, ...

Question 8

Which of the following is a primary characteristic of a transaction-specific asset?

Accepted Answer

A)  It has the ability to generate value only when used for several purposes together.
B)  It is an intangible asset whose value is very hard to evaluate.
C)  It is an asset that can be transported or transferred with ease.
D)  It can generate maximum value only when used for a particular purpose.

Question 9

Identify a true statement about activities that are sequentially interdependent.

Accepted Answer

A)  They require low levels of coordination because of their sequential nature.
B)  They require team members to meet together more regularly and consistently to coordinate their work.
C)  They require individuals to be responsive to the needs of those performing related activities.
D)  They require individuals to communicate their own requirements frequently.

Question 10

Identify a reason why companies choose to make versus buy.

Accepted Answer

A)  They have the capability to perform an activity better than other firms.
B)  They lack the marketing capability to build a brand that will differentiate its products.
C)  Coordinating multiple activities in the value chain is always easy.
D)  It offers the flexibility to make changes to any activity in the value chain.

Question 11

What are some of the advantages of outsourcing?

Accepted Answer

Outsourcing refers to the practice of hi...

Question 12

Which of the following statements is true of subcontractors?

Accepted Answer

A)  They are contracted to create customized inputs for a firm.
B)  They are contracted to oversee the production process of a firm.
C)  They are responsible for the production capacity of a firm.
D)  They are responsible for the profitability of a firm.

Question 13

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips. Yellow Express LLC is _________.

Accepted Answer

A)  diagonally integrated
B)  vertically integrated
C)  horizontally diversified
D)  vertically specialized

Question 14

DHC Inc. is a television manufacturing company. The components of the televisions are manufactured separately by different companies around the globe. Later, these components are tested and then assembled to get the finished products in house by DHC Inc. In the context of the degree of coordination, this scenario best illustrates _________.

Accepted Answer

A)  sequential interdependence
B)  reciprocal interdependence
C)  modular interdependence
D)  extensive interdependence

Question 15

Identify a danger of vertical integration.

Accepted Answer

A)  Loss of flexibility to quickly make changes to a business
B)  Loss of capabilities to create a new product
C)  Loss of creativity to create a unique product
D)  Loss of control over the activities of the value chain

Question 16

A car has to go through several different levels of manufacturing processes before it can be painted. The painting process cannot be initiated until a car is externally assembled and then inspected. This type of interdependence can be best termed as _________.

Accepted Answer

A)  extensive interdependence
B)  modular interdependence
C)  reciprocal interdependence
D)  sequential interdependence

Question 17

Adia, the chief executive officer (CEO) of Touch Works Corp., believes that outsourcing would be a disadvantage to her company. She states that she would not be able to control the finances and assets of her company if work gets outsourced. Which of the following statements strengthens Adia's belief?

Accepted Answer

A)  Outsourcing would maximize the capital investment that Touch Works Corp. would require to grow.
B)  Outsourcing would prevent Touch Works Corp. from contracting out activities to industry specialists.
C)  Touch Works Corp. would be forced to focus on a wide range of activities.
D)  Touch Works Corp. would lose the ability to innovate and create competitive advantage.

Question 18

Outsourcing is advantageous when _________.

Accepted Answer

A)  there is high technological uncertainty in an industry
B)  a high degree of coordination is required between activities
C)  a firm does not have an established brand image to protect
D)  a firm is operating at a loss and is on the verge of a shutdown

Question 19

Cygnus Bank is a banking and financial services company. It offered a large sum of money and a chance to receive employment to the programmers who could create software that would help enhance employee productivity. Which of the following types of crowdsourcing did Cygnus Bank use?

Accepted Answer

A)  Crowdvoting
B)  Crowdinnovation
C)  Crowdtasking
D)  Crowdcreating

Question 20

What are the disadvantages to outsourcing?

Accepted Answer

Outsourcing can have several disadvantag...

Exam 7: Vertical Integration and Outsourcing

Activities closer to the beginning of the industry value chain are referred to as _________.

Correct Answer
verified

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips. Yellow Express LLC is _________.

Correct Answer
verified

Identify a reason why companies choose to make versus buy.

Correct Answer
verified

In the context of vertical integration, when is flexibility most valuable?

Correct Answer
Answered by ExamLex AI
In the context of vertical integration, ...
View Answer

What are the disadvantages to outsourcing?

Correct Answer
Answered by ExamLex AI
Outsourcing can have several disadvantag...
View Answer

What is the main difference between a company that is vertically integrated and a company that is vertically specialized?

Correct Answer
Answered by ExamLex AI
The main difference between a company th...
View Answer

Which of the following statements is true of subcontractors?

Correct Answer
verified

Which of the following best illustrates reciprocal interdependence?

Correct Answer
verified

Outsourcing is advantageous when _________.

Correct Answer
verified

In the context of the primary reasons for vertical integration in companies, which of the following statements is true of coordination?

Correct Answer
verified

When one firm tries to take advantage of another firm that has made a transaction-specific investment, by causing a brief delay in business because a product has no other use is known as a(n)___.

Correct Answer
verified

What are some of the advantages of outsourcing?

Correct Answer
Answered by ExamLex AI
Outsourcing refers to the practice of hi...
View Answer

Correct Answer
verified

Correct Answer
verified

Cygnus Bank is a banking and financial services company. It offered a large sum of money and a chance to receive employment to the programmers who could create software that would help enhance employee productivity. Which of the following types of crowdsourcing did Cygnus Bank use?

Correct Answer
verified

A car has to go through several different levels of manufacturing processes before it can be painted. The painting process cannot be initiated until a car is externally assembled and then inspected. This type of interdependence can be best termed as _________.

Correct Answer
verified

Which of the following is a primary characteristic of a transaction-specific asset?

Correct Answer
verified

In the context of the three Cs of vertical integration, some activities require lower levels of coordination than others to be successful because the activities _________.

Correct Answer
verified

Identify a danger of vertical integration.

Correct Answer
verified

Identify a true statement about activities that are sequentially interdependent.

Correct Answer
verified

Exam 7: Vertical Integration and Outsourcing

Activities closer to the beginning of the industry value chain are referred to as _________.

Correct AnswerverifiedShow Answer

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips. Yellow Express LLC is _________.

Correct AnswerverifiedShow Answer

Identify a reason why companies choose to make versus buy.

Correct AnswerverifiedShow Answer

In the context of vertical integration, when is flexibility most valuable?

Correct AnswerAnswered by ExamLex AIIn the context of vertical integration, ...View AnswerShow Answer

What are the disadvantages to outsourcing?

Correct AnswerAnswered by ExamLex AIOutsourcing can have several disadvantag...View AnswerShow Answer

What is the main difference between a company that is vertically integrated and a company that is vertically specialized?

Correct AnswerAnswered by ExamLex AIThe main difference between a company th...View AnswerShow Answer

Which of the following statements is true of subcontractors?

Correct AnswerverifiedShow Answer

Which of the following best illustrates reciprocal interdependence?

Correct AnswerverifiedShow Answer

Outsourcing is advantageous when _________.

Correct AnswerverifiedShow Answer

In the context of the primary reasons for vertical integration in companies, which of the following statements is true of coordination?

Correct AnswerverifiedShow Answer

When one firm tries to take advantage of another firm that has made a transaction-specific investment, by causing a brief delay in business because a product has no other use is known as a(n)___.

Correct AnswerverifiedShow Answer

What are some of the advantages of outsourcing?

Correct AnswerAnswered by ExamLex AIOutsourcing refers to the practice of hi...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cygnus Bank is a banking and financial services company. It offered a large sum of money and a chance to receive employment to the programmers who could create software that would help enhance employee productivity. Which of the following types of crowdsourcing did Cygnus Bank use?

Correct AnswerverifiedShow Answer

A car has to go through several different levels of manufacturing processes before it can be painted. The painting process cannot be initiated until a car is externally assembled and then inspected. This type of interdependence can be best termed as _________.

Correct AnswerverifiedShow Answer

Which of the following is a primary characteristic of a transaction-specific asset?

Correct AnswerverifiedShow Answer

In the context of the three Cs of vertical integration, some activities require lower levels of coordination than others to be successful because the activities _________.

Correct AnswerverifiedShow Answer

Identify a danger of vertical integration.

Correct AnswerverifiedShow Answer

Identify a true statement about activities that are sequentially interdependent.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
In the context of vertical integration, ...
View Answer

Correct Answer
Answered by ExamLex AI
Outsourcing can have several disadvantag...
View Answer

Correct Answer
Answered by ExamLex AI
The main difference between a company th...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Outsourcing refers to the practice of hi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified