The manager of Steel Works learns of a new technological interdependency between the final stage of production and the distribution of the final product. If Steel Works currently contracts with another firm to distribute the product, which of the following is true?
A)The manager has less of an incentive to integrate forward.
B)The manager has less of an incentive to integrate backward.
C)The manager has more of an incentive to integrate backward.
D)The manager has more of an incentive to integrate forward.

Question

Quizplus · Accepted Answer

The new technological interdependency between the final stage of production and distribution suggests that closer coordination between these stages could lead to efficiencies or improvements. Integrating forward means taking control of the distribution process (moving closer to the end customer), which would allow the manager to better manage this interdependency. Hence, the manager has more of an incentive to integrate forward.

The Manager of Steel Works Learns of a New Technological