Why did business leaders begin the practice of vertical integration?
A. Big companies could grow by merging w/ other companies or acquiring them.
B. Factory workers could start in low positions and work their way up management.
C. Large corporations could control the cycle of a product from creation to sale.
D. Small companies could grow so that they could compete with the larger companies.
I think it’s A but I want to be sure.
Well shucks
You are correct, the practice of vertical integration was driven by the desire of big companies to grow by merging with or acquiring other companies. This allowed them to expand their operations and gain control over various stages of the production process, from raw materials to the final sale of products. This strategy was commonly employed by large corporations to achieve economies of scale and enhance their market power. So, the correct answer is A.
To determine the correct answer to the question about why business leaders began the practice of vertical integration, let's analyze the options:
A. Big companies could grow by merging w/ other companies or acquiring them.
This statement is correct. Vertical integration involves a company expanding its operations by merging with or acquiring other companies in the different stages of the supply chain. This allows for growth and control over the entire production process.
B. Factory workers could start in low positions and work their way up management.
This option is not directly related to vertical integration. It seems to focus more on the potential for upward mobility for workers within a company, rather than the motivations behind vertical integration.
C. Large corporations could control the cycle of a product from creation to sale.
This option is correct. Vertical integration allows large corporations to have control over all the stages of a product's lifecycle, ranging from production to distribution. By owning and managing each step, they can ensure efficiency, quality control, and potentially increase their profits.
D. Small companies could grow so that they could compete with the larger companies.
This option is partially correct. While vertical integration can allow small companies to grow and compete with larger companies to some extent, it is not the primary motivation behind the practice.
Based on the analysis, the correct answer to the question is C. Large corporations could control the cycle of a product from creation to sale.