Which One of the Following Statements About Outsourcing the Performance

question 20

Multiple Choice

Which one of the following statements about outsourcing the performance of value chain activities to outside specialists is false?

• A) Outsourcing support services often has cost-saving benefits but outsourcing primary value chain activities has the disadvantages of raising fixed costs,reducing variable costs,and making it harder to develop distinctive competencies.
• B) Outsourcing critics contend that shifting responsibility for performing value chain activities to outside specialists can hollow out a company's knowledge base and capabilities,leaving it at the mercy of outsider suppliers,and short of the resource strengths to be a master of its own destiny.
• C) Outsourcing the performance of certain value chain activities to able suppliers can add to a company's arsenal of capabilities and contribute to better strategy execution.
• D) The real debate surrounding outsourcing is not about whether too much outsourcing risks loss of control but about how to use outsourcing in a manner that produces greater competitiveness.
• E) Outsourcing can enable a company to heighten its strategic focus and concentrate its full energies and resources on even more competently performing those value chain activities that are at the core of its strategy and for which it can create unique value.

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Definitions:

Statement of Owner's Equity

A financial document that details the changes in the equity of a company over a specific period, including investments, withdrawals, and earnings.

Owner's Equity

The ownership stake of shareholders or owners in a company's assets, after all debts have been subtracted.

Transactions

Business dealings or events that affect the financial position of a company, recorded in the accounting records.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time.