Deck 13: Outsourcing

Question 1

In an outsourcing arrangement,what typically happens to the employees who currently do the outsourced function in-house?

A)They are fired.
B)They quit or retire.
C)They move to another company.
D)They transfer to other functions.

Answer 1

D

Question 2

According to the textbook,why were 30 percent of outsourcing arrangements NOT renewed?

A)because of an incompetent outsourcer
B)because cost savings were not achieved
C)because employees resisted change
D)because productivity suffered

Answer 2

B

Question 3

Which of the following HR functions is most likely to be outsourced by organizations?

A)HR planning
B)HR strategy
C)pension administration
D)restructuring

Answer 3

C

Question 4

What percentage of HR professionals resist outsourcing because they worry about losing their jobs?

A)one-tenth
B)one-quarter
C)one-third
D)one-half

Question 5

Why are specialized outsource vendors more efficient in their offering of training than many organizations?

A)Outsourcers can achieve economies of scale.
B)Outsourcers can charge for every transaction.
C)Outsourcers can maximize their capital.
D)Outsourcers can provide uninterrupted service.

Question 6

What can a company do to reduce the risk of an outsourcing company entering the market and becoming a competitor?

A)outsource non-core work
B)erect strategic blocks
C)establish trust
D)monitor the outsource arrangement

Question 7

Which of the following characteristics is NOT typically used to help determine whether an organization should outsource?

A)reliance on technology
B)routine activity frequently undertaken
C)cost-effectiveness
D)accessibility from remote sites

Question 8

What is the first step in managing outsourcing?

A)cost-benefit analysis
B)selecting the vendor
C)negotiating the contract
D)monitoring the arrangement

Question 9

When rumours of potential outsourcing plans surface in an organization,what might managers expect next?

A)productivity losses
B)customer service disruptions
C)media attention
D)more formal communication

Question 10

Why do large organizations rarely outsource their entire HR departments?

A)Outsourcers specialize in market niches and so no one company does all functions.
B)Organizations do not wish to relinquish total control over all HR functions.
C)Organizations have different cultures than their outsourcing vendors.
D)Outsourcers need to be monitored,and this extra time has associated costs.

Question 11

When selecting a vendor,an organization needs a description of the responsibilities to be outsourced and an invitation to potential providers to present their proposal for carrying out the job.What is this called?

A)vendor checklist
B)supplier sequencing
C)request for proposal
D)sender request

Question 12

What are the two most frequent causes of outsourcing problems?

A)reduction of costs,vendor incompetence
B)excessive time,lack of technology
C)organizational politics,reduced employee morale
D)poor service definition,weak management processes

Question 13

Which core competency does Nike retain in-house while outsourcing nearly everything else?

A)product design
B)financial analysis
C)customer service
D)employee recruitment

Question 14

Which organizational activity performs better than outsourcing with respect to cost savings?

A)management by objectives
B)balanced scorecard
C)re-engineering
D)continuous improvement

Question 15

Why do cost overrides with outsourcing occur more frequently than projected?

A)Information technology is deemed a compatible system
B)Client demands are outside of the standard vendor package
C)Organizations are inexperienced with vendor selection
D)Vendors will make contracts that are biased in their favour

Question 16

Why have many western nations outsourced activities to India?

A)increasing pool of outsourcing companies
B)large English-speaking population
C)relatively stable legal system
D)committed and loyal workforce

Question 17

What function does a stay-back team perform?

A)It negotiates the outsourcing contract
B)It conducts a cost-benefit analysis
C)It monitors the outsourcing arrangement
D)It selects the outsourcing vendor

Question 18

Which of the following is NOT a function of the evaluation team in an outsourcing decision?

A)analyzing bids
B)applying due diligence
C)choosing the vendor
D)negotiating the contract

Question 19

Why is it important to outsource transactional work?

A)It adds value to non-core activities.
B)It frees up management's time.
C)It reduces transaction time.
D)It is repetitive,predictable,and easily duplicated.

Question 20

A core competency can be defined in four different ways.Three of those definitions are: (1)activities traditionally performed internally; (2)activities critical to business success; (3)activities creating current or potential competitive advantage.What is the fourth way that core competency can be defined?

A)activities that will influence future growth
B)activities that will increase profitability
C)activities that will result in innovation
D)activities that will reduce debt load

Question 21

What are two primary risks associated with outsourcing?

A)increased costs and displaced workers
B)impact on public and private relations
C)service and security
D)loss of strategic and operational control

Question 22

What is one service risk to an organization in having a company provide outsourcing arrangements?

A)The vendor might have a less personal relationship with employees.
B)The outsourcer might allow changes to the contract.
C)The vendor might limit certain proprietary technology.
D)The outsourcer might have a disruption of service.

Question 23

According to the textbook,why did CIBC make the decision to outsource major portions of its HR functions?

A)to downsize employees and increase efficiency
B)to avoid capital expenses and increase cultural fit
C)to cut costs and increase productivity
D)to improve service and increase automation

Question 24

Which of the following is a key reason why an organization would outsource?

A)to produce deliverables
B)to undertake complex business activities
C)to improved service levels
D)to improve organizational knowledge activities

Question 25

What are two primary reasons why organizations outsource?

A)financial savings and strategic focus
B)strategic focus and restructuring
C)access to advanced technology and ability to service remote locations
D)improved internal and external service levels

Question 26

Once an organization has selected a vendor,what would be the next step in managing outsourcing?

A)cost-benefit analysis
B)reviewing policies
C)negotiating the contract
D)monitoring the arrangement

Question 27

What are two primary reasons why organizations outsource?

A)strategic and transactional focus
B)access to specialized expertise and advanced technology
C)access to specialized expertise and ability to service remote locations
D)organizational politics and restructuring

Question 28

What is one of the primary risks associated with outsourcing?

A)increased costs
B)decreased employee morale
C)impact on public relations
D)loss of strategic control

Question 29

What happened to Schwinn,a U.S.bicycle manufacturer?

A)Its outsourcing vendor,Giant Manufacturing in Taiwan,stole its confidential employee information,which resulted in many lawsuits against Schwinn.
B)Its outsourcing vendor,Giant Manufacturing in Taiwan,became insolvent and was unable to fulfill its annual order for Schwinn.
C)Its outsourcing vendor,Giant Manufacturing in Taiwan,became a competitor and damaged Schwinn's business.
D)Its outsourcing vendor,Giant Manufacturing in Taiwan,used lower quality materials to make Schwinn's bikes,which increased product defects.

Question 30

Which of the following outsourcing functions carries a potential risk of information being leaked?

A)payroll and benefits
B)software development
C)recruitment
D)pension administration

Question 31

What is an essential first step that an organization must undertake with its outsourcing vendor when negotiating the contract?

A)making sure that there is a termination clause
B)checking references using the vendor's current clients
C)establishing benchmarks for current service levels
D)projecting a budget for cost savings

Question 32

Once an organization has negotiated the outsourcing contract,what would be the next step in managing outsourcing?

A)cost-benefit analysis
B)selecting the vendor
C)reviewing policies
D)monitoring the arrangement

Question 33

Which of the following health and safety activities are most likely outsourced?

A)employee assistance and wellness programs
B)hazard recognition and risk assessment
C)health and safety policies and procedures
D)workplace hazard controls

Question 34

Which of the following HR functions is NOT likely to be outsourced by organizations?

A)training and development
B)strategic planning
C)benefits administration
D)recruitment

Question 35

Which of the following activities is most likely to be outsourced by organizations?

A)confidential activities
B)HR strategy activities
C)employee layoff activities
D)rule-based activities

Question 36

What other HR strategy provides a negative impact on employees similar to that of outsourcing?

A)acquisitions
B)restructuring
C)mergers
D)divestitures

Question 37

What was the public relations consequence for a catering company that had been outsourced by British Airways when 70 000 passengers were stranded at Heathrow Airport in the U.K.?

A)brand image damage
B)bankruptcy
C)no known consequences
D)decreased business

Question 38

Nike focuses on its competencies in product design and outsources other competencies.What is this competency product design called?

A)non-core competencies
B)worker competencies
C)core competencies
D)transactional competencies

Question 39

Which company reduced the headcount in its head office from 40 employees in 1994 to 12 employees today due to outsourcing?

A)TransCanada
B)Gow Corp.
C)Avenor
D)Pratt & Whitney

Question 40

What were two HR functions that Avenor Inc.of Montreal outsourced?

A)preliminary interviews and training needs analysis
B)pensions and payroll administration
C)program delivery and executive salary negotiations
D)wellness programs and strategic HR planning

Question 41

Considering the risks and limitations of outsourcing,it is estimated that few outsourced HR functions have been brought back in-house.What is the percentage of outsourced HR functions that are taken back by organizations?

A)1 to 20 percent
B)10 to 30 percent
C)20 to 40 percent
D)10 to 40 percent

Question 42

An organization's outsourcing impacted its customers' perceptions of service,which were directly impacted by the level of organizational commitment of employees.What risks did this organization carry as a result of outsourcing?

A)employee morale risks
B)security risks
C)reduced value risks
D)service risks

Question 43

Which of the following HR activities is NOT suitable for outsourcing?

A)benefits administration
B)HR strategy
C)administering personnel tests
D)payroll administration

Question 44

An organization found that outsourcing its employees' skills limited their ability to learn and exploit changes.What risks did this organization carry as a result of outsourcing?

A)employee morale risks
B)reduced value risks
C)service risks
D)security risks

Question 45

Which is one of the meanings of core competency?

A)activities currently performed internally
B)activities contributing directly to the bottom line
C)activities traditionally providing competitive advantage
D)activities influencing human behaviour

Question 46

An organization found that outsourcing its human resources function resulted in employee confidential personnel data not being kept private.What risks did this organization carry as a result of outsourcing?

A)employee morale risks
B)security risks
C)service risks
D)reduced value risks

Question 47

An organization found that in outsourcing its human resources function sensitive information,such as employee performance reviews were shared.What risks did this organization carry as a result of outsourcing?

A)security risks
B)reduced value risks
C)employee morale risks
D)service risks

Question 48

An organization decided to focus on its core competencies,such as customer service,and contract out its secondary functions,such as benefits administration.Which of the following defined its core competencies?

A)activities that were best performed using technology
B)activities that both contributed to the bottom line and employee commitment
C)activities that created current or potential competitive advantage
D)activities that traditionally led to competitive advantage and growth

Question 49

Which of the following activities is NOT likely to be outsourced?

A)rule based
B)repetitive
C)frequently undertaken
D)unpredictable

Question 50

An organization decided to focus on its core competencies,such as innovation,and contract out its secondary functions,such as payroll administration.Which of the following defined its core competencies?

A)activities traditionally performed internally and critical to business success
B)activities representing a balance between both core work and non-core work
C)activities creating employee commitment and creativity
D)activities traditionally performed internally and influence employee productivity

Question 51

Which of the following activities is NOT likely to be outsourced?

A)predictable
B)strategic
C)able to be fully or partly automated by technology
D)able to be delivered by remote sites

Question 52

Which of the following HR activities is following a new trend that is being outsourced because of its complexity and need for confidentiality?

A)payroll
B)absence management
C)recruiting
D)benefits administration

Question 53

Which of the following HR activities is NOT suitable for outsourcing?

A)economics of scale
B)ancillary activities
C)routine activities
D)management decision activities

Question 54

Which of the following HR functions is most likely to be outsourced?

A)orientation
B)leadership development
C)training
D)employee relations

Question 55

Which of the following HR activities is suitable for outsourcing?

A)succession management
B)conducting HR surveys
C)administering personnel tests
D)layoffs,restructuring

Question 56

An organization found that outsourcing led to company information being leaked.What risks did this organization carry as a result of outsourcing?

A)service risks
B)security risks
C)reduced value risks
D)employee morale risks

Question 57

An organization's outsourcing led to the disintegration of the organization's culture.What risks did this organization carry as a result of outsourcing?

A)service risks
B)reduced value risks
C)employee morale risks
D)security risks

Question 58

Which of the following HR the functions is NOT likely to be outsourced?

A)temporary staffing
B)payroll
C)training
D)orientation

Question 59

Which of the following HR the functions is NOT likely to be outsourced?

A)training
B)employee relations
C)recruiting
D)benefits administration.

Question 60

Which of the following HR functions are most likely to be outsourced?

A)performance management
B)recruiting
C)succession management
D)organizational change

Question 61

Two disadvantages of outsourcing include the potential disintegration of an organization's culture and the loss of control over proprietary knowledge.

Question 62

Labour relations problems and a strike with the outsourced food catering supplier of British Airways left 70,000 passengers stranded at Heathrow Airport.What risks did British Airways carry as a result of outsourcing?

A)service risks
B)employee morale risks
C)security risks
D)reduced value risks

Question 63

Activities that are most likely to be outsourced include ones that are repetitive,predictable,and infrequent.

Question 64

Technology has been an important driver of the outsourcing trend.

Question 65

Outsourcing is a contractual relationship for the provision of business services by any available provider with relevant expertise.

Question 66

The major information risk to the HR department when using outsourcing is the potential for violations of confidential employee data.

Question 67

Outsourcing is a special organizational function that does not require a cost-benefit analysis.

Question 68

Typically a company will outsource its HR functions if the labour laws and regulations governing employees are too complex for the company's current level of expertise.

Question 69

The two most frequent causes of outsourcing problems are poor service definition and cost overruns.

Question 70

According to one survey in the textbook,about 80 percent of companies reported that outsourcing service agreements did not reduce overall costs.

Question 71

Non-core work is transformational work that is routine and standard and can easily be duplicated and replicated.

Question 72

An organization's restructuring and outsourcing resulted in displaced employees who felt resentful and retaliatory.What risks did this organization carry as a result of outsourcing?

A)security risks
B)reduced value risks
C)employee morale risks
D)service risks

Question 73

When selecting an outsourcing company,reference checks should be done to verify the quality of its previous work.

Question 74

Three reasons that organizations outsource are improved service levels,access to specialized expertise,and organizational politics.

Question 75

Recruiting is an HR function that is most likely to be outsourced.

Question 76

Quality improvement is typically cited as a benefit of outsourcing,and therefore it is written into the outsourcing contract.

Question 77

When HR activities are outsourced to foreign countries,this is called HRO,or human resources outsourcing.

Question 78

Outsourcing occurs when a company pays another company to do work for it.

Question 79

Two core functions that should be outsourced are employee relations and performance management.

Question 80

Because an outsourced function is not as visible to the employees as an in-house function,there may be issues of confidentiality.