Question 1

Identify an action managers could take to prevent a subcontractor from becoming a competitor.

Accepted Answer

A)  Take an equity stake in the supplier.
B)  Share tacit knowledge with suppliers.
C)  Choose a single supplier for outsourcing activities.
D)  Involve the supplier in the production process.

Question 2

Which of the following scenarios illustrates the concept of outsourcing?

Accepted Answer

A)  TechOn Inc., a company that buys raw materials from a supplier company
B)  BNX Corp., a company that procures raw materials and supplies them to a different company
C)  Virgo Corp., a company that contracts out a business activity to another company
D)  Red Inc., a company that sells all its assets to another company

Question 3

In the context of coordination, what is modular interdependence?

Accepted Answer

In the context of coordination within or...

Question 4

Which of the following is a disadvantage of outsourcing?

Accepted Answer

A)  It is difficult to focus on many different activities at once.
B)  A lack of control over critical assets or activities results.
C)  A firm does not have an established brand image to protect.
D)  Firms lack the flexibility to quickly make changes to the business model. B

Question 5

Lupus LLC is a company that sells personalized gift items. It reduces the cost of employing professional artists, designers, photographers, salespeople, and retailers by letting its members and other people submit their ideas for designs, quotes, and phrases on its e-commerce website. Which of the following types of crowdsourcing does Lupus LLC use?

Accepted Answer

A)  Crowdvoting
B)  Crowdinnovation
C)  Crowdtasking
D)  Crowdcreating

Question 6

Which of the following scenarios best illustrates the concept of vertical integration?

Accepted Answer

A)  NZB Corp., a company that sells all its assets to another company
B)  Hues Inc., a company that owns its supply chain for its raw materials and processes
C)  Scorpio LLC, a company that buys raw materials from a supplier company
D)  Blue Corp., a company that makes raw materials and supplies them to a different company

Question 7

Apex Electronics LLC requires many teams to work together intensively and in tandem with each other in order to effectively produce its products. A high level of coordination between the working teams is essential for the company to maintain the high quality of its products. This type of interdependence can be best termed as _________.

Accepted Answer

A)  sequential interdependence
B)  reciprocal interdependence
C)  limited interdependence
D)  modular interdependence

Question 8

Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases. It added new features in its suitcases such as water-resistance and extra storage space. The initiation by Browns Inc. to manufacture its own suitcases best illustrates _________.

Accepted Answer

A)  linked diversification
B)  backward integration
C)  forward integration
D)  assisted development

Question 9

Saturn LLC., a computer manufacturer, uses outdated technology to build specialized graphic cards for its computers. The company finds it difficult to upgrade its graphic card building technology to a newer version. However, Sun Products Inc., one of its competitors, upgrades itself to the new version with lesser difficulty. In this scenario, Saturn LLC is facing a _________.

Accepted Answer

A)  loss of frequency
B)  loss of focus
C)  loss of flexibility
D)  loss of facility

Question 10

Which of the following scenarios supports the view that a company should engage in outsourcing?

Accepted Answer

A)  Zenith Corp., a publishing house, which needed a high capital investment to grow because it contracted most of its peripheral activities to other companies
B)  FRC Inc., an apparel company, which fears the loss of a strong hold over its prime activities if it does not perform them in house
C)  AutoLuxe LLC, an automobile company, which has the flexibility to contract processes to another company at a fast rate
D)  Innovator Inc., a software company, which foresees that its employees will have less work and more time under their disposal for leisure activities if it lets other suppliers help perform its activities

Question 11

Having more flexibility, or being less vertically integrated, is more valuable when _________.

Accepted Answer

A)  a firm can create its own raw materials
B)  technology used is outdated
C)  the cost to perform an activity remains the same
D)  new technologies are innovated

Question 12

In the context of the three Cs of vertical integration, some activities or tasks require more coordination than others to be successful because _________.

Accepted Answer

A)  people performing the activity are not skilled
B)  those activities need no supervision
C)  of greater interdependence with other activities
D)  those activities are independent of each other

Question 13

Which of the following best illustrates modular interdependence?

Accepted Answer

A)  A firm in which team performance is based on individual activities that are pooled together
B)  A firm in which activities are based on the completion of preceding tasks by another firm
C)  A firm whose performance is achieved through a process of iterative knowledge sharing
D)  A firm whose performance is free of the results of individual activities in the value chain

Question 14

North Road LLC, an apparel company, found that its fashion supplies and accessories section was not generating much profit. Thus, the company contracted this section of its business to another company that designs and manufactures these products in a better way. The management of North Road realized that the employees of North Road could use the time to focus on other aspects that bring profit to the company. This scenario best illustrates _________.

Accepted Answer

A)  market penetration
B)  vertical integration
C)  horizontal diversification
D)  outsourcing D

Question 15

Which of the following statements is a characteristic of subcontractors?

Accepted Answer

A)  They are responsible for bringing in key functions to regulate a company.
B)  They have to assign and coordinate various projects of a company.
C)  They have 10 percent share in the profits accrued by a company.
D)  They create made-to-order contributions for a company.

Question 16

Briefly state the difference between outsourcing and insourcing.

Accepted Answer

Outsourcing and insourcing are two contr...

Question 17

As a danger of vertical integration, a(n)___ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

Accepted Answer

The answer of As a danger of vertical integration, a(n)___...

Question 18

The process where a firm contracts out a business process or activity to an external supplier is known as _________.

Accepted Answer

A)  outsourcing
B)  vertical integration
C)  horizontal diversification
D)  market penetration

Question 19

Green Solutions Corp. is a washing machine manufacturing company. When it initially started out, it had held contracts with a supplier who provided the company with finished washing machine parts. However, Green Solutions later started manufacturing the parts by itself and assembling its products within the company without having to seek supplier intervention. This scenario best exemplifies _________.

Accepted Answer

A)  vertical integration
B)  market penetration
C)  task specialization
D)  horizontal diversification A

Question 20

Which of the following is a danger for vertically-specialized companies?

Accepted Answer

A)  They offer their best product at the lowest price.
B)  They do not allow the firm to focus on making profits.
C)  They have the flexibility to quickly make changes to the business model.
D)  They go out of business if they cannot make enough profits.

Exam 7: Vertical Integration and Outsourcing

Identify an action managers could take to prevent a subcontractor from becoming a competitor.

Correct Answer
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Which of the following scenarios illustrates the concept of outsourcing?

Correct Answer
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In the context of coordination, what is modular interdependence?

Correct Answer
Answered by ExamLex AI
In the context of coordination within or...
View Answer

Which of the following is a disadvantage of outsourcing?

Correct Answer
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B

Correct Answer
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Which of the following scenarios best illustrates the concept of vertical integration?

Correct Answer
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Correct Answer
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Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases. It added new features in its suitcases such as water-resistance and extra storage space. The initiation by Browns Inc. to manufacture its own suitcases best illustrates _________.

Correct Answer
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Correct Answer
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Which of the following scenarios supports the view that a company should engage in outsourcing?

Correct Answer
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Having more flexibility, or being less vertically integrated, is more valuable when _________.

Correct Answer
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In the context of the three Cs of vertical integration, some activities or tasks require more coordination than others to be successful because _________.

Correct Answer
verified

Which of the following best illustrates modular interdependence?

Correct Answer
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Correct Answer
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D

Which of the following statements is a characteristic of subcontractors?

Correct Answer
verified

Briefly state the difference between outsourcing and insourcing.

Correct Answer
Answered by ExamLex AI
Outsourcing and insourcing are two contr...
View Answer

As a danger of vertical integration, a(n)___ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

Correct Answer
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The process where a firm contracts out a business process or activity to an external supplier is known as _________.

Correct Answer
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Correct Answer
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A

Which of the following is a danger for vertically-specialized companies?

Correct Answer
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Exam 7: Vertical Integration and Outsourcing

Identify an action managers could take to prevent a subcontractor from becoming a competitor.

Correct AnswerverifiedShow Answer

Which of the following scenarios illustrates the concept of outsourcing?

Correct AnswerverifiedShow Answer

In the context of coordination, what is modular interdependence?

Correct AnswerAnswered by ExamLex AIIn the context of coordination within or...View AnswerShow Answer

Which of the following is a disadvantage of outsourcing?

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Which of the following scenarios best illustrates the concept of vertical integration?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases. It added new features in its suitcases such as water-resistance and extra storage space. The initiation by Browns Inc. to manufacture its own suitcases best illustrates _________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following scenarios supports the view that a company should engage in outsourcing?

Correct AnswerverifiedShow Answer

Having more flexibility, or being less vertically integrated, is more valuable when _________.

Correct AnswerverifiedShow Answer

In the context of the three Cs of vertical integration, some activities or tasks require more coordination than others to be successful because _________.

Correct AnswerverifiedShow Answer

Which of the following best illustrates modular interdependence?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Which of the following statements is a characteristic of subcontractors?

Correct AnswerverifiedShow Answer

Briefly state the difference between outsourcing and insourcing.

Correct AnswerAnswered by ExamLex AIOutsourcing and insourcing are two contr...View AnswerShow Answer

As a danger of vertical integration, a(n)___ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

Correct AnswerverifiedShow Answer

The process where a firm contracts out a business process or activity to an external supplier is known as _________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Which of the following is a danger for vertically-specialized companies?

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
In the context of coordination within or...
View Answer

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B

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D

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Correct Answer
Answered by ExamLex AI
Outsourcing and insourcing are two contr...
View Answer

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A

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