Which statement about vertical integration in an uncertain environment is most likely true?
A) Backward vertical integration is best for all firms.
B) Vertical integration is best for multinational corporations.
C) Outsourcing is best for firms with significant specificities.
D) Outsourcing will lead to far less performance ambiguities.
E) Outsourcing is best for firms without significant specificities.

Question

Quizplus · Accepted Answer

Outsourcing is generally more advantageous for firms without significant asset specificities because it allows them to leverage the specialized capabilities of suppliers and avoid the costs and complexities of vertical integration. Firms with significant specificities might benefit more from vertical integration to protect their investments and ensure control over critical processes.

Which Statement About Vertical Integration in an Uncertain Environment Is