Final answer:
The value chain is a model that describes the stages of producing a product and can lead to increased effectiveness in organizations through specialization and innovation. The split-up value chain allows for intricately specialized production stages across different countries. It is TRUE that leveraging the value chain helps organizations become more effective.
Step-by-step explanation:
The concept you are referring to is known as the value chain, a model that outlines the full range of activities required to create a product or service. For businesses, understanding their value chain is crucial to enhancing efficiency and obtaining a competitive advantage. By dissecting the iPhone's production process as an example, it becomes clear how the value chain operates. The iPhone's value chain includes designing in the United States, sourcing components from Korea, assembling in China, and marketing back in the United States.
Advancements in communication, information sharing, and transportation have facilitated the splitting up of the value chain, allowing for different segments of production to be completed in various locations, often across countries. This intricate level of specialization enables firms to focus intensely on specific parts of the process, leading to increased innovations and economic gains through intra-industry trade. At its core, the value chain supports an organization's effectiveness by promoting learning, specialization, and the development of economic scales.
To answer the question directly, it is TRUE that the value chain can help organizations become more effective by allowing them to specialize and innovate on particular parts of the production process.