Question 1

Audio Component Outsourcing (Scenario) 
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following would be most important to determine in deciding whether to outsource some of Echo's value-chain activities?

Accepted Answer

A)   What are the long-term strategic goals and objectives of Echo?
B)   Do engineers working in Echo have the ability to speak one or more European languages?
C)   Are Echo employees generally afforded a high degree of workplace freedom?
D)   Does Echo intend to increase its annual budget for innovation?E) B) and D)
F) All of the above

Question 2

In a short essay, explain how global sourcing can contribute significantly to a firm's ability to achieve its strategic goals. Why is "achievement of strategic goals" actually the best rationale for global sourcing?

Accepted Answer

The strategic view of global sourcing-ca...

Question 3

Offshoring is a process of creative destruction; according to this view, firms' innovative activities tend to make mature products obsolete over time.

Accepted Answer

A) True 
 B)False

Question 4

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

Accepted Answer

A)   offshoring
B)   contract manufacturing
C)   cause marketing
D)   captive sourcingE) C) and D)
F) B) and C)

Question 5

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

Accepted Answer

A)   configuration of value-adding activity
B)   internalization
C)   visual merchandising
D)   disintermediationE) B) and C)
F) None of the above

Question 6

Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________.

Accepted Answer

A)   encouraging firms to train unskilled labor through extensive training programs
B)   allowing firms to free expensive analysts, engineers, and managers from routine tasks to spend more time on high-value-adding activities
C)   relaxing quality standards
D)   installing a system of rewards to motivate employeesE) B) and D)
F) None of the above

Question 7

Which of the following is true with regard to strategies for minimizing the risks of global sourcing?

Accepted Answer

A)   To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources.
B)   To maximize returns and minimize risks, management should outsource core business operations.
C)   Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes.
D)   Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations.E) A) and C)
F) All of the above

Question 8

Which of the following statements is true with regard to the R&D activities of a firm?

Accepted Answer

A)   As a strategic asset, R&D activities are of moderate importance to the firm.
B)   R&D activities are usually concentrated at home.
C)   R&D activities have a low likelihood of being internalized.
D)   R&D activities have a high likelihood of being outsourced.E) B) and D)
F) B) and C)

Question 9

When outsourcing, managers can minimize the risk of creating employee tension by ________.

Accepted Answer

A)   increasing the number of junior managers for foreign assignments
B)   increasing the annual training budget
C)   sending domestic managers to foreign countries for training
D)   reaching a consensus of managers and laborE) B) and D)
F) A) and D)

Question 10

Providing after-sales service is typically the activity of a supplier.

Accepted Answer

A) True 
 B)False

Question 11

The more diverse the firm's global supply chain, the lesser the cost of logistics.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar?

Accepted Answer

A)   The probability of intellectual property laws being enforced would significantly decrease in Japan.
B)   The U.S. company will experience additional cost savings in using the services of the Japanese company.
C)   Outsourcing business operations to Japan would become less expensive.
D)   The U.S. company will experience higher costs in using the services of the Japanese company.E) B) and D)
F) B) and C)

Question 13

Which of the following is a major challenge often faced by focal firms that engage in global sourcing?

Accepted Answer

A)   no control over the quality of outputs
B)   domestic management of local distribution
C)   increased costs of business travel
D)   lower-than-expected cost savingsE) A) and D)
F) None of the above

Question 14

Global Sourcing Debate (Scenario)
Prof. Sean Peterson's class of international business has been studying the controversies surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B. Group A was assigned the task of defending global sourcing, whereas Group B was assigned the task of arguing against global sourcing.
-How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.

Accepted Answer

Managers must decide between internaliza...

Question 15

Business activities that would most likely be offshored are characterized by ________.

Accepted Answer

A)   high-value-adding activities that contribute more productively to increasing company performance
B)   services related to critical, long-term research projects and product development
C)   routine tasks that do not relate to the firm's primary service or product
D)   functions related to the firm's core competencies and strategic assetsE) None of the above
F) B) and C)

Question 16

Which of the following activities is highly important to firms as a strategic asset?

Accepted Answer

A)   manufacturing of parts
B)   customer service
C)   sales and distribution
D)   marketing and brandingE) A) and B)
F) A) and C)

Question 17

Firms usually internalize those value-chain activities they consider part of their core competencies.

Accepted Answer

A) True 
 B)False

Question 18

Audio Component Outsourcing (Scenario) 
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following, if true, most supports the argument in favor of global sourcing?

Accepted Answer

A)   There is no scarcity of qualified personnel in and around Boston.
B)   Studies show that by reconfiguring their value-chain systems or reengineering their business processes, companies can substantially improve their production efficiency and resource utilization.
C)   Camden Audio, Echo's most formidable rival, follows a strategy of product diversification.
D)   The rate of employee turnover at Echo has stabilized over the last decade.E) All of the above
F) B) and D)

Question 19

Distinguish between captive sourcing and contract manufacturing.

Accepted Answer

Captive sourcing refers to sourcing from...

Question 20

Back-office activities consist of downstream, customer-related services.

Accepted Answer

A) True 
 B)False

Exam 17: Global Sourcing

Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar?

Correct Answer
verified

In a short essay, explain how global sourcing can contribute significantly to a firm's ability to achieve its strategic goals. Why is "achievement of strategic goals" actually the best rationale for global sourcing?

Correct Answer
verified
The strategic view of global sourcing-ca...
View Answer

Correct Answer
verified

Which of the following is true with regard to strategies for minimizing the risks of global sourcing?

Correct Answer
verified

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

Correct Answer
verified

Providing after-sales service is typically the activity of a supplier.

Correct Answer
verified

Correct Answer
verified

Distinguish between captive sourcing and contract manufacturing.

Correct Answer
verified
Captive sourcing refers to sourcing from...
View Answer

The more diverse the firm's global supply chain, the lesser the cost of logistics.

Correct Answer
verified

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

Correct Answer
verified

Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________.

Correct Answer
verified

Back-office activities consist of downstream, customer-related services.

Correct Answer
verified

Which of the following is a major challenge often faced by focal firms that engage in global sourcing?

Correct Answer
verified

Which of the following statements is true with regard to the R&D activities of a firm?

Correct Answer
verified

Firms usually internalize those value-chain activities they consider part of their core competencies.

Correct Answer
verified

When outsourcing, managers can minimize the risk of creating employee tension by ________.

Correct Answer
verified

Offshoring is a process of creative destruction; according to this view, firms' innovative activities tend to make mature products obsolete over time.

Correct Answer
verified

Which of the following activities is highly important to firms as a strategic asset?

Correct Answer
verified

Correct Answer
verified
Managers must decide between internaliza...
View Answer

Business activities that would most likely be offshored are characterized by ________.

Correct Answer
verified

Exam 17: Global Sourcing

Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar?

Correct AnswerverifiedShow Answer

In a short essay, explain how global sourcing can contribute significantly to a firm's ability to achieve its strategic goals. Why is "achievement of strategic goals" actually the best rationale for global sourcing?

Correct AnswerverifiedThe strategic view of global sourcing-ca...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true with regard to strategies for minimizing the risks of global sourcing?

Correct AnswerverifiedShow Answer

If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.

Correct AnswerverifiedShow Answer

Providing after-sales service is typically the activity of a supplier.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Distinguish between captive sourcing and contract manufacturing.

Correct AnswerverifiedCaptive sourcing refers to sourcing from...View AnswerShow Answer

The more diverse the firm's global supply chain, the lesser the cost of logistics.

Correct AnswerverifiedShow Answer

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

Correct AnswerverifiedShow Answer

Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________.

Correct AnswerverifiedShow Answer

Back-office activities consist of downstream, customer-related services.

Correct AnswerverifiedShow Answer

Which of the following is a major challenge often faced by focal firms that engage in global sourcing?

Correct AnswerverifiedShow Answer

Which of the following statements is true with regard to the R&D activities of a firm?

Correct AnswerverifiedShow Answer

Firms usually internalize those value-chain activities they consider part of their core competencies.

Correct AnswerverifiedShow Answer

When outsourcing, managers can minimize the risk of creating employee tension by ________.

Correct AnswerverifiedShow Answer

Offshoring is a process of creative destruction; according to this view, firms' innovative activities tend to make mature products obsolete over time.

Correct AnswerverifiedShow Answer

Which of the following activities is highly important to firms as a strategic asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedManagers must decide between internaliza...View AnswerShow Answer

Business activities that would most likely be offshored are characterized by ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The strategic view of global sourcing-ca...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Captive sourcing refers to sourcing from...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Managers must decide between internaliza...
View Answer

Correct Answer
verified