Which of the Following Scenarios Supports the View That a Company

question 5

Multiple Choice

Which of the following scenarios supports the view that a company should engage in outsourcing?

• A)Zenith Corp., a publishing house, which needed a high capital investment to grow because it contracted most of its peripheral activities to other companies
• B)FRC Inc., an apparel company, which fears the loss of a strong hold over its prime activities if it does not perform them in house
• C)AutoLuxe LLC, an automobile company, which has the flexibility to contract processes to another company at a fast rate
• D)Innovator Inc., a software company, which foresees that its employees will have less work and more time under their disposal for leisure activities if it lets other suppliers help perform its activities

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Definitions:

Economic Efficiency

A state in which resources are allocated in the most effective manner, maximizing the production of goods and services without wasting resources.

Representative Democracy

A system of government where citizens elect representatives to make decisions and enact laws on their behalf.

Balanced Budget Amendment

A proposed amendment to the U.S. Constitution requiring that the federal government not spend more than its income.

Shortsightedness Effect

A situation where decision-makers prioritize immediate benefits over long-term gains, potentially leading to suboptimal outcomes.