Every firm operates within a particular market environment in which revenues are obtained. In the market environment, companies interact with customers, employees, suppliers and competitors. Customers expect to receive value from a firm’s products. This means that a firm should offer products that have certain level of quality, at reasonable prices along with good customer service compared to its competitors’ products and customer service. Companies should establish close relationships with their suppliers because product quality, price and timeliness of delivery depend on material resources provided by suppliers.

Employees are very important in helping firms to become more effective. Frontline workers (those who have direct contacts with customers such as salespeople) should be given responsibility, authority, and freedom to do their jobs in order to quickly meet customers’ needs and expectations, i.e. to empower employees. In the market environment, firms need to be able to compete effectively and to distinguish themselves from their competitors to drive enough revenues for their survival and to prosper.

The correct answer is C.