When Considering Outsourcing, What Should Firms Be Sure to Avoid

question 43

Multiple Choice

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

• A)Losing control of non-core activities which 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:

International Trade

The exchange of goods, services, and capital across international borders or territories, influenced by trade agreements and regulations.

Cross-border Flow

The movement of goods, services, capital, or labor across national borders, highlighting aspects of globalization and international trade.

Foreign Direct Investment

Investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Multinational Corporations

Large companies that operate and have assets in several countries, beyond their home country, to maximize global market presence.