A firm that engages in strategic outsourcing typically
A) increases its internal transaction costs.
B) reduces its level of vertical integration.
C) reduces its level of external transaction costs.
D) increases its level of horizontal integration.

Question

Quizplus · Accepted Answer

An alternative to vertical integration is strategic outsourcing, which involves moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain. A firm that engages in strategic outsourcing reduces its level of vertical integration.

A Firm That Engages in Strategic Outsourcing Typically