19–7. Advanced Interconnect Manufacturing Inc. (AIM) is an independent company. It was previously owned by one of its major customers before being purchased by five managers

(with the help of outside investors). AIM assembles wire harnesses for use in machines such as copiers and x-ray machines. The vice president of the company claims that the company is more efficient because “as an independent company, AIM doesn’t have to share any of its major customer’s corporate overhead.” As he notes, the company’s CEO doesn’t get paid by us.”

a. Evaluate the vice president’s explanation for the increased efficiency of AIM since the ownership was changed.

b. Give an alternative explanation for the increased efficiency.