Question

Which of the following is not a good reason to make a vertical integration/disintegration decision? Do it yourself if co...

Which of the following is not a good reason to make a vertical integration/disintegration decision?

Do it yourself if coordinating is difficult

Don’t pay for something you can do yourself

Do use a valuable and rare resource

Don’t do it yourself, if you might change what you want.

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Answer #1

Last option is not a good reason for vertical integration

If you are certain that you might want to have changes in the desired good, and this change cannot be mentioned or narrated in the contract, it is better to do it yourself instead of vertically integrating with some other firm. This is because then there will be problems related to hold up.

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