Which of the following is a disadvantage of modular organizations?
A) They cost significantly more to run than traditional organizations.
B) They are characterized by a loss of control that occurs when key business activities are outsourced to other companies.
C) They do not let companies share costs, and because members cannot combine their efforts to meet customers' needs, they are slow.
D) They are unstable and have temporary relationships in a network alliance.

Question

Which of the following is a disadvantage of modular organizations? 
A) ​They cost significantly more to run than traditional organizations. 
B) ​They are characterized by a loss of control that occurs when key business activities are outsourced to other companies. 
C) ​They do not let companies share costs, and because members cannot combine their efforts to meet customers' needs, they are slow. 
D) ​They are unstable and have temporary relationships in a network alliance.

Quizplus · Accepted Answer

Modular organizations rely on outsourcing key business activities to other firms, which can result in a loss of control over those activities. This can be a significant disadvantage, particularly if the outsourced activities are critical to the organization's success.

Which of the Following Is a Disadvantage of Modular Organizations