What does outsourcing allow firms to do?
A) It allows them to shed functions the firm doesn't perform well in order to focus on its strengths.
B) It allows them to gain more control over the firm's supply chain.
C) It allows them to practise vertical integration.
D) It allows them to set up shop in any country in the world.

Question

Quizplus · Accepted Answer

Outsourcing allows firms to delegate functions that are not their strengths to specialized service providers who can perform those tasks more efficiently and effectively. This frees up resources for the firm to focus on its core competencies and areas of expertise.

Answer: C
 Outsourcing is not related to vertical integration, which involves a firm expanding its operations by integrating different stages of the value chain. Outsourcing focuses on delegating specific functions to external vendors, rather than expanding the firm's operations.

Answer: D
 While outsourcing may involve working with vendors in other countries, it does not necessarily allow firms to set up shop anywhere in the world. Setting up operations in a foreign country would require additional investments and resources beyond outsourcing.

What Does Outsourcing Allow Firms to Do