Critics of companies that use outsourcing contend that shifting responsibility for performing value chain activities to outside specialists
A)has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies.
B)can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outside suppliers, and short of the resource strengths to be a master of its own destiny.
C)results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners.
D)slows down decision-making on key strategic issues because outside suppliers have to be consulted first.
E)lowers the morale of company employees, dampens a company's ability to implement best practices, and results in greater bureaucracy and slower decision-making.

Question

Quizplus · Accepted Answer

Critics argue that outsourcing can result in a loss of internal knowledge and capabilities, leaving the company at the mercy of outside suppliers and limiting its ability to control its own destiny. This can be particularly problematic if the outside supplier experiences difficulties or goes out of business, as the company may not have the resources to quickly pivot and find alternative solutions.

Critics of Companies That Use Outsourcing Contend That Shifting Responsibility