Which of the following statements is true of outsourcing?
A) It reduces economic risk by facilitating the purchase of large insurance policies.
B) It reduces production risk by eliminating delays in the timely receipt of needed parts.
C) It reduces political risk by enabling the company to avoid investing in plants and equipment abroad.
D) It reduces currency risk by allowing the company to invest the home currency on in-house production facilities.

Question

Quizplus · Accepted Answer

Outsourcing can reduce political risk by allowing a company to avoid the costs and risks associated with investing in physical assets like plants and equipment in foreign countries. This is because outsourcing involves contracting out certain business functions or processes to third-party providers, often in different countries, rather than the company having to establish and manage these operations directly abroad.

Which of the Following Statements Is True of Outsourcing