An Outsource Vendor Changes Its Strategic Direction

question 45

Multiple Choice

An outsource vendor changes its strategic direction. Under which of the following outsourcing risks can this be associated?

• A) de facto sole source
• B) superfluous chief information officer (CIO)
• C) diseconomies of scale
• D) loss of control

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Definitions:

Provincial Governments

The governing authorities of regions or provinces within a country, responsible for administering regional laws and policies.

Trust Companies

Financial institutions that act as agents for a trust to manage assets, execute trusts, and administer estates on behalf of their beneficiaries.

Agency Problems

Conflicts of interest between the principals (owners or shareholders) and agents (managers) of a company, often arising from differing motives or information asymmetry.

Control Problems

Issues that arise in contexts where one party (the principal) delegates tasks to another party (the agent), who may have different interests or information.