Critics of Companies That Use Outsourcing Contend That Shifting Responsibility

question 31

Multiple Choice

Critics of companies that use outsourcing contend that shifting responsibility for performing value chain activities to outside specialists

• A)has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies.
• B)can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outside suppliers, and short of the resource strengths to be a master of its own destiny.
• C)results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners.
• D)slows down decision-making on key strategic issues because outside suppliers have to be consulted first.
• E)lowers the morale of company employees, dampens a company's ability to implement best practices, and results in greater bureaucracy and slower decision-making.

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Definitions:

Inflation

An economic condition characterized by an overall increase in prices and decrease in the purchasing value of money.

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the amount of money in circulation.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services.

Typical Consumer

A typical consumer represents an average or standard unit of analysis in economic models, used to predict behavior patterns in the marketplace.