Outsourcing Risks Include Breaches in Intellectual Property, Provider Shirking, and Opportunistic

Outsourcing risks include breaches in intellectual property, provider shirking, and opportunistic renegotiation. The combination of contractual incompleteness, asset specificity, and uncertainty gives rise to these risks when firms pursue external sourcing. Outsourcing organizations must have a clear _____________________.

A) legally binding contract
B) understanding of the contract
C) understanding of true supplier intentions
D) definition of supplier roles and responsibilities
E) understanding of the supplier's role and responsibilities