op man exam 2 ch 11s

27. The number-one reason driving outsourcing for many firms is to focus on core competencies.

False (Advantages and disadvantages of outsourcing, moderate)

25. A client firm should not include its home country when conducting a country risk assessment.

False (Methodologies for outsourcing, moderate)

21. U.S. government data suggest that foreigners outsource far fewer services to the U.S. than American companies send abroad.

False (Outsourcing trends and political repercussions, moderate)

22. The term renewal has been created to describe the return of business activity to the client firm.

False (Outsourcing trends and political repercussions, moderate)

14. Core competencies are good candidates for outsourcing.

False (Strategic planning and core competencies, easy)

15. The theory of competitive advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

False (Strategic planning and core competencies, moderate)

18. The term "India price" has become the global benchmark—interchangeable with "lowest price possible."

False (Strategic planning and core competencies, moderate) {AACSB: Multiculture and Diversity}

19. The term "Mexico price" has become the global benchmark—interchangeable with "lowest price possible."

False (Strategic planning and core competencies, moderate) {AACSB: Multiculture and Diversity}

11. Some business activities, such as human resources and legal processes, cannot be outsourced.

False (What is outsourcing?, moderate)

2. Offshoring is the practice of procuring from foreign external sources services or products that are normally part of an organization.

False (What is outsourcing?, moderate)

4. Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.

False (What is outsourcing?, moderate)

7. A firm that outsources its internal business activities is called the outsource provider.

False (What is outsourcing?, moderate)

8. A firm that provides outsourcing activity is called the client firm.

False (What is outsourcing?, moderate)

1. Some organizations use outsourcing to replace entire purchasing, information systems, marketing, finance, and operations departments.

True (Introduction, moderate)

24. The factor-rating method is an excellent tool for dealing with both country risk assessment and source provider selection problems.

True (Methodologies for outsourcing, easy)

26. Nearshoring is the practice of choosing an outsource provider in the home country or in a nearby country.

True (Methodologies for outsourcing, moderate)

20. U.S. government data suggest that foreigners outsource far more services to the U.S. than American companies send abroad.

True (Outsourcing trends and political repercussions, moderate)

23. Research indicates that of all the reasons given for outsourcing failure, the most common is that the decision was made without sufficient understanding of the options through quantitative analysis.

True (Risks in outsourcing, moderate)

13. An organization's unique skills, talents, and capabilities are referred to as its core competencies.

True (Strategic planning and core competencies, easy)

16. The theory of comparative advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

True (Strategic planning and core competencies, moderate)

17. The term "China price" has become the global benchmark—interchangeable with "lowest price possible."

True (Strategic planning and core competencies, moderate) {AACSB: Multiculture and Diversity}

12. Nearly any business activity can be outsourced.

True (What is outsourcing?, moderate)

3. Outsouring is the practice of procuring from external sources services or products that are normally part of an organization.

True (What is outsourcing?, moderate)

5. Offshoring is the practice of moving a business process to a foreign country but retaining control of it.

True (What is outsourcing?, moderate)

6. A firm that outsources its internal business activities is called the client firm.

True (What is outsourcing?, moderate)

it is simply an extension of the long-standing practice of subcontracting production activities.

True (What is outsourcing?, moderate)

10. Outsourcing has expanded to become a major strategy in business due to the continuing move toward specialization in an increasingly technological society.

True (What is outsourcing?, moderate) {AACSB: Use of IT}

41. Outsourcing manufacturing is also known as a. license manufacturing b. sublease manufacturing c. concurrent manufacturing d. hollow manufacturing e. contract manufacturing

e (What is outsourcing?, moderate)

40. Which of the following is the number-one reason driving outsourcing for many firms? a. cost savings b. gaining outside expertise c. improving operations and service d. focusing on core competencies e. gaining outside technology

a (Advantages and disadvantages of outsourcing, moderate)

33. Which term has become interchangeable with "lowest price possible?" a. "China price" b. "Mexico price" c. "India price" d. "Russia price" e. "Korea price"

a (Strategic planning and core competencies, moderate){AACSB: Multiculture and Diversity}

30. Outsourcing is simply an extension of the long-standing practice of a. subcontracting b. importing c. exporting d. postponement e. e-procurement

a (What is outsourcing?, easy)

35. What term has been created to describe the return of business activity to the client firm? a. renewal b. backsourcing c. reversal d. reversesourcing e. insourcing

b (Outsourcing trends and political repercussions, moderate)

38. The practice of choosing an outsource provider in the home country or in a nearby country is referred to as a. homeshoring b. homesourcing c. nearshoring d. nearsourcing e. backsourcing

c (Methodologies for outsourcing, moderate)

36. Which of the following statements is most accurate? a. Nearly all outsourcing relationships do not last beyond two years. b. Nearly all U.S. firms that outsourced processes to India have backsourced them. c. Approximately half of all outsourcing agreements fail. d. Outsourcing is a relatively risk-free activity. e. More than 90% of outsourcing agreements succeed.

c (Risks in outsourcing, moderate)

32. What theory states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can? a. theory of competitive advantage b. theory of core competencies c. theory of comparative advantage d. theory of outsourcing e. theory of offshoring

c (Strategic planning and core competencies, moderate)

29. What is the practice of moving a business process to a foreign country but retaining control of it? a. exporting b. farshoring c. offshoring d. outsourcing e. backsourcing

c (What is outsourcing?, moderate)

39. Which of the following is not an advantage of outsourcing? a. cost savings b. gaining outside expertise c. improving operations and service d. outsourcing core competencies e. gaining outside technology

d (Advantages and disadvantages of outsourcing, easy)

37. According to research, which of the following is the most common reason cited for outsourcing failure? a. core competencies identified as non-core b. erratic power grids in foreign countries c. unable to control product development, schedules, and quality d. decisions made without sufficient understanding of the options through quantitative analysis e. political and exchange rate uncertainty

d (Risks in outsourcing, moderate)

31. Which of the following is not true regarding core competencies? a. They may include specialized knowledge. b. They may represent a small portion of an organization's total business. c. They may include proprietary technology or information. d. They may be good candidates for outsourcing. e. They may include unique production methods.

d (Strategic planning and core competencies, moderate)

34. The term "China price" has become interchangeable with a. negotiated price b. fixed exchange rates c. price of the lowest quality item d. lowest price possible e. price multiplier based on the Hong Kong stock exchange level

d (Strategic planning and core competencies, moderate) {AACSB: Multiculture & Diversity}

MULTIPLE CHOICE 28. What is the practice of procuring from external sources services or products that are normally part of an organization? a. nearshoring b. farshoring c. offshoring d. outsourcing e. backsourcing

d (What is outsourcing?, moderate)