Deck 9: Outsourcing

Question 1

China managed to attract foreign investment in the 1980s because the government loosened its policy of closed doors and actively pursued such investments.

Answer 1

True

Question 2

The term "outsourcing" denotes the contracting by a company of selected work, previously performed in-house, to a third-party vendor located overseas.

Answer 2

False

Question 3

Outsourcing of work by a company may be peripheral or integral to the business of the company.

Answer 3

True

Question 4

The term "off-shoring" refers to service jobs that are contracted to vendors overseas.

Question 5

Captive firms are transfer of jobs overseas to their own affiliates and managed by their own staff.

Question 6

Near-shoring has recently grown in importance because of the savings in logistics and inventory costs.

Question 7

IT off-shoring refers to off-shoring of jobs that are related to computer and Internet technology related services of the company.

Question 8

Y2K or the Year 2000 crisis refers to the slowdown in off-shoring in 2005 as a result of a global recession.

Question 9

Business Process Off-shoring (BPO) is a narrower form of outsourcing jobs overseas than Internet technology off-shoring (IT).

Question 10

Telemarketing and sales calls are considered examples of back office work that are off-shored to overseas companies.

Question 11

South Africa's long history with Germany gives it an advantage in offering off-shore services to Germany.

Question 12

Dalian in China has a large Japanese speaking population and therefore has an advantage in providing off-shore services to Japanese companies.

Question 13

A scandal involving excess levels of lead in toys led to a backlash of Chinese goods imported into the United States in 2007.

Question 14

A scandal involving excess levels of lead in toothpaste led to a backlash of Chinese goods imported into the United States in 2007.

Question 15

One positive impact of off-shoring to receiving countries is the increase in employment and income.

Question 16

One negative impact of off-shoring to receiving countries is the reduction in ancillary industries leading to a reduction in income and growth.

Question 17

One negative impact of off-shoring services to the sending country is the immediate loss of jobs and income.

Question 18

One positive impact of off-shoring services to the sending country is an increase in productivity and possible increase in employment over the long run.

Question 19

In joint venture agreements of off-shoring services, the term BOT stands for "build, operate and terminate."

Question 20

Indirect third party vendors are companies located domestically that will provide off-shoring services to domestic companies.

Question 21

China was able to attract overseas investments in the 1980s for the following reasons except

A) it had built a strong infrastructure
B) the government actively encouraged foreign investment
C) it had abundant natural resources
D) it became a member of the WTO
E) it abandoned the policy of closed doors to foreign investment.

Question 22

The term "outsourcing" refers to jobs that are contracted by a company to a third party

A) located overseas
B) located domestically
C) located domestically and overseas
D) that performs peripheral activities only
E) that performs only the core activities of the company only

Question 23

The outsourcing of work by a company to a third party vendor

A) must be peripheral to the business of the company
B) must be located in a foreign country
C) must be defined by a long-term contract
D) must be performed at the location of the third-party vendor.
E) None of the above

Question 24

The term "off-shoring" refers to jobs that are contracted to overseas vendors

A) in the areas of services
B) in the areas of manufacturing
C) in the areas of marketing
D) in the areas of services and manufacturing
E) in the areas of services and marketing

Question 25

Captive units refer to

A) overseas affiliates set up by the company to perform jobs for the company only
B) overseas affiliates set up by the company to perform jobs for a variety of companies
C) joint ventures set up by the company to perform jobs for the company only
D) joint ventures set up by the company to perform jobs for a variety of companies
E) none of the above

Question 26

Near-shoring has the following benefits, except

A) it reduces inventory costs
B) it reduces logistics costs
C) it reduces exchange rate uncertainly because currencies tend to move together
D) it makes management easier because of the dissimilar time zones
E) it makes management easier because of the similar time zones

Question 27

IT off-shoring jobs include the following except

A) Internet technology related services of the company
B) human resource related jobs of the company
C) customized and automated software for the company
D) web-related services for the company
E) none of the above

Question 28

The Y2K or the year 2000 crisis problem in the 1990s

A) reduced the demand of off-shoring services, especially from India
B) reduced the demand of off-shoring services, especially from China
C) helped spur the off-shoring of software relates services, especially in India
D) helped spur the off-shoring of software relates services, especially in China
E) none of the above

Question 29

Business Process Outsourcing or BPO refers to jobs off-shored that are performed for

A) back offices only
B) front offices only
C) payroll and administrative services only
D) back offices and payroll and administrative services only
E) back and front offices

Question 30

Telemarketing services that are off-shored include the following, except

A) sales calls made directly to customers
B) appointment setting calls
C) market research
D) recruitment of personnel for the company
E) lead generation

Question 31

Algeria, Tunisia and Morocco have an advantage in providing off-shore services to

A) United States
B) Germany
C) Australia
D) France
E) Japan

Question 32

Brazil and Dalian (in China) have an advantage in providing off-shore services to

A) United States
B) Germany
C) Australia
D) France
E) Japan

Question 33

A scandal involving China in 2007 led to a backlash in the United States because toys imported from there contained dangerous levels of

A) cyanide
B) lead
C) diethylene glycol
D) arsenic
E) glue

Question 34

When a company decides to off-shore, the following factors need to be considered, except

A) ensure work flow from offshore units is fully integrated into the domestic business units
B) recognize that the process of off-shoring is more complicated than domestic outsourcing
C) ensure off-shoring is consistent with its strategic objectives
D) ensure payments are always made in dollars
E) ensure organizational structure is in place to handle flow of communication

Question 35

A company should find it less troublesome to offshore services

A) if the services are core to the company's activities
B) if the domain expertise can easily be copied
C) if the domain expertise cannot easily be copied
D) cannot be scaled up if they are successfully implemented
E) none of the above

Question 36

The negative impacts of off-shoring to a receiving country is a(n)

A) increase in employment
B) increase in income
C) development in ancillary industries
D) growth of a large internal market as skills and talent are transferred overseas
E) an increase in inflation

Question 37

The positive impacts to the sending country of off-shoring services overseas are the following except

A) an increase in the employment rate in the long run
B) a decrease in prices leading to an increase in consumption
C) an increase in the rate of inflation
D) an increase in productivity for the company
E) none of the above

Question 38

The reasons to go offshore include the following except

A) lower cost
B) access to talent not available domestically
C) provide flexibility to management
D) market penetration
E) streamline supply chain management

Question 39

The 2007 PriceWaterhouseCoopers study showed that executives were reluctant to offshore services for the following reasons except

A) concern about public reaction
B) lack of skills in managing offshore
C) ethics of moving jobs overseas
D) government regulations
E) company favors using in-house employees

Question 40

A survey by Robert Half in January 2008 of fourteen hundred chief information officers shows that only ____ percent of them have sent technology jobs offshore.

A) 1 percent
B) 5 percent
C) 15 percent
D) 35 percent
E) 48 percent

Question 41

What are the differences between off-shoring, near-shoring, and in-shoring?

Question 42

What is the difference between Internet technology (IT) off-shoring and business process off-shoring (BPO)?

Question 43

What are the differences between back-office and front-office services that are sent off-shore by U.S. companies?

Question 44

What kinds of telemarketing services are usually off-shored overseas by U.S. companies?

Question 45

List some emerging countries that are able to provide specialized off-shoring services in languages other than English and identify the potential recipient countries.

Question 46

What are the advantages and disadvantages to receiving countries that provide off-shoring services?