Question 1

In an outsourcing arrangement, what typically happens to the employees who currently do the outsourced function in-house?
A) They are fired.
B) They quit or retire.
C) They move to another company.
D) They transfer to other functions.

Accepted Answer

In an outsourcing arrangement, it is common for the employees who currently do the outsourced function in-house to be transferred to other functions within the company rather than being fired, quitting or retiring, or moving to another company. This helps to retain valuable employees and maintain a positive work culture.

Question 2

Why are specialized outsource vendors more efficient in their offering of training than many organizations?
A) Outsourcers can achieve economies of scale.
B) Outsourcers can charge for every transaction.
C) Outsourcers can maximize their capital.
D) Outsourcers can provide uninterrupted service.

Accepted Answer

Specialized outsource vendors can achieve economies of scale since they can offer their training services to multiple organizations, allowing them to spread their costs over a larger customer base. This allows them to offer their services at a lower cost than if each organization were to offer training in-house.

Question 3

Why do cost overrides with outsourcing occur more frequently than what is projected?
A) Information technology is deemed a compatible system.
B) Client demands are outside of the standard vendor package.
C) Organizations are inexperienced with vendor selection.
D) Vendors will make contracts that are biased in their favour.

Accepted Answer

Cost overrides with outsourcing occur more frequently when client demands are outside of the standard vendor package. This can happen when the client requests additional or customized services beyond what was initially agreed upon, leading to additional costs.

Question 4

What percentage of HR professionals resist outsourcing because they worry about losing their jobs?
A) one-tenth
B) one-quarter
C) one-third
D) one-half

Accepted Answer

According to the article, "Around a third (31%) of HR professionals worry that outsourcing could lead to them losing their job."

Question 5

Which of the following is NOT a function of the evaluation team in an outsourcing decision?
A) analyze bids
B) apply due diligence
C) choose vendor
D) negotiate contract

Accepted Answer

The evaluation team typically analyzes bids, applies due diligence, and chooses a vendor, but negotiating the contract is usually handled by a separate team or legal department.

Question 6

A core competency can be defined in four different ways. Three of those definitions are: as an activity traditionally performed internally; activities critical to business success; and activities creating current or potential competitive advantage. What is the fourth way that core competency can be defined?
A) activities that will influence future growth
B) activities that will increase profitability
C) activities that will result in innovation
D) activities that will reduce debt load

Accepted Answer

The fourth way that core competency can be defined is as activities which are difficult for competitors to imitate or find substitutes for, and can therefore offer a sustained competitive advantage.

Question 7

When rumours of potential outsourcing plans surface in an organization, what might managers expect next?
A) productivity losses
B) customer service disruptions
C) media attention
D) more formal communication

Accepted Answer

The answer of When rumours of potential outsourcing plans surface...

Question 8

What can a company do to reduce the risk of an outsourcing company entering the market and becoming a competitor?
A) outsource non-core work
B) erect strategic blocks
C) establish trust
D) monitor the outsource arrangement

Accepted Answer

Erecting strategic blocks can involve various measures such as signing non-compete clauses, establishing intellectual property rights, or limiting the scope of the outsourcing agreement. This can help prevent the outsourcing company from using the knowledge and resources gained through the partnership to enter the market as a competitor. The other options (A, C, D) may be important for managing the outsourcing arrangement but do not directly address the risk of competition.

Question 9

Which core competency does Nike retain in-house while outsourcing nearly everything else?
A) product design
B) financial analysis
C) customer service
D) employee recruitment

Accepted Answer

According to the statement, Nike retains product design in-house while outsourcing nearly everything else.

Question 10

Why do large organizations rarely outsource their entire HR departments?
A) Outsourcers specialize in market niches and so no one company does all functions.
B) Organizations do not wish to relinquish total control over all HR functions.
C) Organizations have different cultures than their outsourcing vendors.
D) Outsourcers need to be monitored and this extra time has associated costs.

Accepted Answer

The answer of Why do large organizations rarely outsource their...

Question 11

Which of the following characteristics is NOT typically used to help determine whether an organization should outsource?
A) reliant on technology
B) routine activity frequently undertaken
C) achieves cost-effectiveness
D) deliverable from remote sites

Accepted Answer

Achieving cost-effectiveness is not typically used to help determine whether an organization should outsource.

Question 12

Why have many western nations outsourced activities to India?
A) increasing pool of outsourcing companies
B) large English-speaking population
C) relatively stable legal system
D) committed and loyal workforce

Accepted Answer

One of the main reasons why many western nations outsource activities to India is because of the country's large English-speaking population. This allows for clear communication between the outsourcing company and the service provider in India. The other options may also be factors, but they are not the primary reason why outsourcing is done in India.

Question 13

What are the two most frequent causes of outsourcing problems?
A) reduction of costs; vendor incompetence
B) excessive time; lack of technology
C) organizational politics; reduced employee morale
D) poor service definition; weak management processes

Accepted Answer

Poor service definition and weak management processes are often cited as the most common causes of outsourcing problems. Without clear definitions of expected services and proper management processes in place, outsourcing relationships can suffer from miscommunication, misunderstandings, and lack of accountability.

Question 14

When selecting a vendor, an organization needs a description of the responsibilities to be outsourced and an invitation to potential providers to present their proposal for carrying out the job. What is this called?
A) vendor checklist
B) supplier sequencing
C) request for proposal
D) sender request

Accepted Answer

This process is usually referred to as a Request for Proposal (RFP). It is a formal document that outlines the project requirements, the scope of work, and the evaluation criteria. Potential vendors are invited to submit their proposals, which will be evaluated based on pre-determined criteria such as cost, quality, and experience. This allows organizations to compare different vendors and select the one that best meets their needs.

Question 15

Why is it important to outsource transactional work?
A) Because it adds value to non-core activities.
B) Because it frees up management's time.
C) Because it reduces transaction time.
D) Because it is repetitive, predictable, and easily duplicated.

Accepted Answer

Outsourcing transactional work allows organizations to focus on their core activities and reduce costs by delegating repetitive, predictable, and easily duplicated tasks to third-party service providers. This frees up time for management to focus on more strategic tasks and improves overall efficiency and productivity.

Question 16

According to the textbook, why were thirty percent of outsourcing arrangements not renewed?
A) Because of an incompetent outsourcer.
B) Because cost savings were not achieved.
C) Because employees resisted change.
D) Because productivity suffered.

Accepted Answer

The textbook states that thirty percent of outsourcing arrangements were not renewed because cost savings were not achieved.

Question 17

What function does a stay-back team perform?
A) negotiates the outsourcing contract
B) conducts a cost-benefit analysis
C) monitors the outsourcing arrangement
D) selects the outsourcing vendor

Accepted Answer

The stay-back team is responsible for monitoring the outsourcing arrangement to ensure that the vendor is meeting the agreed-upon service levels and deliverables. This is an important ongoing function to maintain the effectiveness of the outsourcing relationship. The other choices are not typically within the scope of the stay-back team's responsibilities.

Question 18

Which organizational activity performs better than outsourcing with respect to cost savings?
A) management-by-objectives
B) balanced scorecard
C) re-engineering
D) continuous improvement

Accepted Answer

Re-engineering is focused on redesigning the way work is done to better support the organization's mission and reduce costs, which can lead to significant cost savings compared to outsourcing.

Question 19

What is the first step in managing outsourcing?
A) cost-benefit analysis
B) selecting the vendor
C) negotiating the contract
D) monitoring the arrangement

Accepted Answer

Conducting a cost-benefit analysis is the first step in managing outsourcing as it helps in determining the potential benefits and risks associated with outsourcing and enables decision-makers to make informed decisions. Selecting the vendor, negotiating the contract, and monitoring the arrangement come later in the outsourcing process.

Question 20

Which of the following functions was NOT outsourced by TransCanada, a North American energy company?
A) disability management
B) exit interviews
C) pension administration
D) health and safety

Accepted Answer

Health and safety is a critical function that is typically managed internally by companies like TransCanada to ensure compliance with regulations and maintain control over safety standards.

Quiz 13: Outsourcing

In an outsourcing arrangement, what typically happens to the employees who currently do the outsourced function in-house?

Why are specialized outsource vendors more efficient in their offering of training than many organizations?

Why do cost overrides with outsourcing occur more frequently than what is projected?

What percentage of HR professionals resist outsourcing because they worry about losing their jobs?

Which of the following is NOT a function of the evaluation team in an outsourcing decision?

When rumours of potential outsourcing plans surface in an organization, what might managers expect next?

What can a company do to reduce the risk of an outsourcing company entering the market and becoming a competitor?

Which core competency does Nike retain in-house while outsourcing nearly everything else?

Why do large organizations rarely outsource their entire HR departments?

Which of the following characteristics is NOT typically used to help determine whether an organization should outsource?

Why have many western nations outsourced activities to India?

What are the two most frequent causes of outsourcing problems?

When selecting a vendor, an organization needs a description of the responsibilities to be outsourced and an invitation to potential providers to present their proposal for carrying out the job. What is this called?

Why is it important to outsource transactional work?

According to the textbook, why were thirty percent of outsourcing arrangements not renewed?

What function does a stay-back team perform?

Which organizational activity performs better than outsourcing with respect to cost savings?

What is the first step in managing outsourcing?

Which of the following functions was NOT outsourced by TransCanada, a North American energy company?