Which of the Following Is NOT a Reason Why Companies

question 9

Multiple Choice

Which of the following is NOT a reason why companies might use outsourcing to improve performance of strategy-critical activities?

• A) improving a company's chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence
• B) promoting quick establishment of a total quality culture
• C) speeding internal decision making and shortening the time it takes to respond to changing market conditions
• D) capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution
• E) helping decrease internal bureaucracies and flatten the organizational structure

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Definitions:

Net Profit Margin

A financial metric expressing the percentage of revenue that remains as profit after all operating and non-operating expenses have been deducted.

Gross Margin

The difference between revenue and cost of goods sold, which serves as a measure of a company’s manufacturing and distribution efficiency.

Return On Total Assets

A financial ratio that measures the profitability of a company relative to its total assets, indicating how efficiently a company uses its assets to generate profits.

Return On Equity

A metric that gauges the effectiveness of a firm in utilizing investments to drive earnings growth, determined by dividing net income by shareholders' equity.