If the mangers of Golden Bread, a large bakery, acquire a wheat farm to produce the flour for their bread, the managers of Golden Bread are likely to experience all of the following except which one?
A)the hold- up problem
B)an increase in managerial diseconomies
C)an increase in their required areas of expertise
D)an increase in the complexity of coordination of Golden Bread

Question

Quizplus · Accepted Answer

The hold-up problem typically occurs in situations where there are specific investments made in a buyer-supplier relationship, leading to a potential for opportunistic behavior by one party due to the dependency created by the other. In the case of Golden Bread acquiring a wheat farm, they are integrating vertically, which actually reduces the risk of the hold-up problem because they are taking control of a key supply chain component (the wheat farm) rather than being dependent on an external supplier for flour.

If the Mangers of Golden Bread, a Large Bakery, Acquire