Outsourcing occurs when a firm:
A) buys one of its rivals.
B) merges with one of its suppliers.
C) enters into a joint venture with a rival.
D) hires another firm to perform value creation activities.
E) enters into contracts with two suppliers simultaneously.

Question

Quizplus · Accepted Answer

Outsourcing refers to the practice of hiring another firm to perform value creation activities. This is done to reduce costs, increase efficiency, and improve quality. Outsourcing can occur in various functional areas, such as manufacturing, accounting, marketing, and information technology. By outsourcing, firms can focus on their core competencies and strategic activities, while relying on specialized vendors to handle non-core functions.

Outsourcing Occurs When a Firm