When a Company Uses a Network Structure to Implement Outsourcing

question 36

Multiple Choice

When a company uses a network structure to implement outsourcing,

• A) many firms along the value chain can easily cooperate.
• B) bureaucratic costs are increased.
• C) the cost of the outsourced functions increases.
• D) organizational culture is an important control mechanism.
• E) many firms along the value chain can easily cooperate and bureaucratic costs are increased.

---

Definitions:

Depreciation

The accounting process of allocating the cost of a tangible or physical asset over its useful life, used to represent wear and tear or obsolescence.

Net Income

The amount of money remaining after all operating expenses, taxes, and deductions are taken out from total revenue.

Rental Property

Real estate property that is leased or rented to tenants, generating rental income for the owner.

Passive Loss Limitation

Tax rules that limit the amount of passive losses (from activities in which the taxpayer does not materially participate) that can offset other types of income.