Describe forward and backward integration

What will be an ideal response?

• Forward Integration — where an organization sets up or buys its own distribution functions (e.g. a university publisher setting up its own bookstore

• Backward integration — where the organization sets up or buys out a supplier (e.g. a nursing home setting up a wholesale operation)
• Efficiencies, improved service or additional revenue are deciding factors in determining strategies

Business

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When discounting cash flows of the all-equity firm,

A) the revenues and expenses must be measured as they occur rather than on an incremental basis. B) there is no need to incorporate the risk premium of that the firm's stockholders would demand in the discount rate. C) all cash flows should be measured in the same currency. D) revenues and expenses should be measured on a pre-tax cash flow basis.

Business

When managers have an illusion of control bias, they often ________

A) centralize decision-making authority B) promote flat hierarchy of authority C) empower workers D) promote mutual adjustment

Business