Question

Which of the following is true concerning to the IO perspective?

• Industry structure determines firm conduct which in turn determines firm’s performance
• Industry structure determines firm performance which in turn determines firms conduct
• Industry conduct determines firm structure which in turn determines firm’s performance
• Industry performance determines firm conduct which in turn determines firms’ structure.

Answer 1

Solution=

For the above question - 1st Statement is true.

Reason=

The concept Structure-Conduct-Performance explores the relationship between the organizational environment, behavior, and performance. The (SCP) paradigm asserts that supply and demand conditions in an industry determine its structure. The competitive environment created by this industry structure affects the behavior of companies and, conversely, dictates the performance of the industry.

This is why concerning to Industrial Organization Industry structure determines firm conduct which in turn determines firm’s performance is True.

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