Vertical Integration in the Manufacture of Component Parts Increases an Organization's

Multiple Choice

Vertical integration in the manufacture of component parts increases an organization's scope,and the resulting increase in organizational complexity can raise a firm's cost structure.Which of the following is NOT a reason for this?

A) Vertically integrated firms have to determine appropriate prices for goods transferred to subunits within the firm.
B) The greater the number of subunits in an organization,the greater the problems of coordinating and controlling those units.
C) The firm that vertically integrates into component part manufacture may find that because its internal suppliers have a captive customer in the firm,they lack an incentive to reduce costs.
D) Vertically integrated firms risk losing valuable proprietary production technology to competitors.