Chapter 11
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
A client firm should not include its home country when conducting a country risk assessment.
False
A firm that outsources its internal business activities is called the outsource provider.
False
A firm that provides outsourcing activity is called the client firm.
False
Core competencies are good candidates for outsourcing.
False
Offshoring is the practice of procuring from foreign external sources services or products that are normally part of an organization.
False
Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.
False
Some business activities, such as human resources and legal processes, cannot be outsourced.
False
The number-one reason driving outsourcing for many firms is to focus on core competencies.
False
The term "India price" has become the global benchmark—interchangeable with "lowest price possible."
False
The term "Mexico price" has become the global benchmark—interchangeable with "lowest price possible."
False
The term renewal has been created to describe the return of business activity to the client firm.
False
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
U.S. government data suggest that foreigners outsource far fewer services to the U.S. than American companies send abroad.
False
A firm that outsources its internal business activities is called the client firm.
True
An organization's unique skills, talents, and capabilities are referred to as its core competencies.
True
Nearly any business activity can be outsourced.
True
Nearshoring is the practice of choosing an outsource provider in the home country or in a nearby country.
True
Offshoring is the practice of moving a business process to a foreign country but retaining control of it.
True
Outsourcing has expanded to become a major strategy in business due to the continuing move toward specialization in an increasingly technological society.
True
Outsourcing is not a new concept; it is simply an extension of the long-standing practice of subcontracting production activities.
True
Outsourcing is the practice of procuring from external sources services or products that are normally part of an organization.
True
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
Some organizations use outsourcing to replace entire purchasing, information systems, marketing, finance, and operations departments.
True
The factor-rating method is an excellent tool for dealing with both country risk assessment and source provider selection problems.
True
The term "China price" has become the global benchmark—interchangeable with "lowest price possible."
True
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
U.S. government data suggest that foreigners outsource far more services to the U.S. than American companies send abroad.
True
Outsourcing is simply an extension of the long-standing practice of a. subcontracting b. importing c. exporting d. postponement e. e-procurement
a
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
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
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
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 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
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
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
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
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
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
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
Outsourcing manufacturing is also known as a. license manufacturing b. sublease manufacturing c. concurrent manufacturing d. hollow manufacturing e. contract manufacturing
e