When a company uses a network structure to implement outsourcing,
A) many firms along the value chain can easily cooperate.
B) bureaucratic costs are increased.
C) the cost of the outsourced functions increases.
D) organizational culture is an important control mechanism.
E) many firms along the value chain can easily cooperate and bureaucratic costs are increased.

Question

Quizplus · Accepted Answer

A network structure facilitates communication and coordination between firms in the value chain, making cooperation easier. This can lead to efficiencies and cost reductions. Bureaucratic costs may not necessarily increase as the network structure allows for greater flexibility and adaptability. The cost of outsourced functions may increase or decrease depending on the specifics of the outsourcing arrangement. Organizational culture may still play a role as a control mechanism, but it may be less important than other factors in a network structure. Therefore, choice A is the best answer.

When a Company Uses a Network Structure to Implement Outsourcing