A flexibility-based approach to vertical integration suggests that when the decision-making setting regarding a business activity is highly uncertain, firms should form a strategic alliance to enter this activity instead of vertically integrating.

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This statement is true, as a flexibility-based approach takes into account the uncertainty in a business activity and suggests that forming a strategic alliance would provide more flexibility and a lower risk approach compared to vertical integration.

A Flexibility-Based Approach to Vertical Integration Suggests That When the Decision-Making