Incentive problems do not arise when the firm uses ______uppliers.

Question

Quizplus · Accepted Answer

Incentive problems arise when suppliers have a dependent relationship with the firm, meaning they rely on the firm for a significant portion of their business. This can lead to conflicts of interest and reduced supplier motivation to provide the highest quality goods or services at the lowest cost. Independent suppliers, on the other hand, are not reliant on the firm and are more likely to act in their own self-interest, including providing high-quality goods and services at the lowest possible cost. Therefore, incentive problems are less likely to arise with independent suppliers.

Incentive Problems Do Not Arise When the Firm Uses ______Uppliers