Value Tot Inc. had earlier hired two other organizations to handle its accounts. However, recently it decided to manage all its activities within the organization and took over the accounting processes. This scenario best exemplifies:
A) outsourcing.
B) offshoring.
C) vertical integration.
D) critical path method.

Question

Quizplus · Accepted Answer

Vertical integration refers to a situation where a company brings in-house activities previously handled by third-party contractors or suppliers. In this scenario, Value Tot Inc. decided to manage all its accounting processes, which were earlier handled by two other organizations, suggesting the company is vertically integrating the accounting activities. The other options, outsourcing and offshoring, refer to the transfer of specific business processes to external vendors, while critical path method is a project management tool used to plan and execute complex projects.