When Considering Outsourcing, What Should Firms Be Sure to Avoid

question 51

Multiple Choice

When considering outsourcing, what should firms be sure to avoid?

• A)Losing control of noncore activities that don't distinguish the firm
• B)Allowing outsourcing to develop into a substitute for innovation
• C)Giving the outsourcing partner opportunities to become a strong competitor
• D)Allowing employees transferred to the outsourcing partner to rejoin the firm
• E)Adverse corporate tax implications of asset transfers to the outsourcing partner

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Definitions:

Monetary Reward

A financial benefit given as payment, incentive, or compensation for services rendered or achievements.

Bailment Created

The legal relationship established when personal property is transferred from one party to another under an agreement for a specific purpose.

Simple Delivery Service

A basic service that transports goods from one location to another without additional services or complexities.

Act of God

A natural and unavoidable catastrophe that interrupts the expected course of events and is not caused by human intervention.