A virtual corporation runs the risk that its outsourcing contractors renege on the arrangement, and take over the role of the virtual corporation as well, including all the profits.

Question

Quizplus · Accepted Answer

Outsourcing contractors may have access to intellectual property, customer information, and other vital resources of the virtual corporation. If they choose to break off the contract and compete with the virtual corporation, they may have a significant advantage in terms of resources and knowledge. Hence, there is a risk of the outsourcing contractor taking over the role of the virtual corporation and reaping all the profits.

A Virtual Corporation Runs the Risk That Its Outsourcing Contractors