The Big Risk of Employing an Outsourcing Strategy Is

question 103

Multiple Choice

The big risk of employing an outsourcing strategy is

• A)causing the company to become partially integrated instead of being fully integrated.
• B)hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.
• C)hurting a company's R&D capability.
• D)putting the company in the position of being a late mover instead of an early mover.
• E)increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.

---

Definitions:

Effective Interest Rate Method

The effective interest rate method is a technique for calculating the actual interest rate for a loan or financial product over time, considering the effects of compounding.

Interest Expense

The cost incurred by an entity for borrowed funds, often reflected in the payment of interest on loans or debt.

Carrying Value

The value of an asset as shown on a company's balance sheet, accounting for depreciation, amortization, and impairment, also known as the book value.

Present Value

Today's monetary worth of a prospective money sum or set of cash flow transactions, given a set rate of return.