University of Houston

MBA 6205

Chapter 9: Core Competencies and Outsourcing

Multiple Choice

1)_is the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies.

1. 21. innovative constraint

1. 5. second tier competency

1. 23. corporate skill

1. 10. core competency

2. All except one of the following are key questions for identifying core competencies:

17. Does the identified skill set contribute significantly to what the customer perceives as the organization’s value-added?
18. Does the business derive most of its revenue based on products or services that exhibit the core competency?
19. Is the business particularly good as the skill set?
20. Is the skill set broad enough that it allows the opportunity to enter many diverse markets or businesses?

3.                      is the process of moving an aspect of production, service, or business function from within an organization to an outside supplier.

21. Insourcing

5. Outsourcing

23. Make-or-buy

10. Supply chain collaboration

4. The term “privatization” with regard to supply chain management refers to when               .

1000. a government or a public agency chooses to outsource
14. a government or a public agency chooses to insource
15. a government agency chooses to outsource
16. a public agency chooses to outsource

5. All of the following are business examples of outsourcing except                  .
   20. 3PL
   21. vertical integration

1. 5. offshoring

1. 23. contract manufacturing

6. 3PL involves using a supplier to provide                      services. U) marketing

5. design

23. logistics

10. contract manufacturing

7. Outsourcing products or services to a different country is referred to as               .

1000. third party services
14. offloading O) offshoring

P) logistics

8. The decision to insource or outsource is referred to as a (an)               .

1000. offshore decision
14. make-or-buy decision
15. business decision
16. contract manufacturing

9 The following lists the most significant reasons for outsourcing except                  .

1. 1000. reduce operating costs
   14. creates a variable cost structure
   15. improve skills
   16. limited manufacturing capacity

10. Identify from the following list a major strategic risk associated with outsourcing. U) outsourcing landed cost is usually higher than insourcing cost
    5. the business looses sight of market trends

1. 23. supplier is purchased by a competitor

1. 10. cost of supplied material is passed on to the customer

11. All of the following are phases of a quality outsourcing process except                  .

21. conduct an outsourcing analysis

5. establish and manage the outsourcing relationship W) establish the mission: generate and screen ideas

X) obtain agreement of the design/development team

12. The definition of a total cost of ownership is the direct cost of                      .

1000. materials, labor, overhead, and inventory
14. materials, labor and overhead
15. materials, labor, and energy
16. materials, labor, energy, overhead, transportation, inventory, quality, obsolescence and capital

13. Potential outsourcing decisions must always be analyzed from a                  perspective and not only from the perspective of whether the organization will reduce its costs.

21. purchasing

5. management

23. tactical.

10. strategic

14. Buyers involved in outsourcing need to develop a different skill set, directed more at

                    the supplier and maintaining the relationship rather than contractual compliance.

1. monitoring
2. involving
3. managing D) visiting

15. Companies may decide to insource previously outsourced activities based on the dynamics of the market and their                                                 strategy.

21. supplier

5. competitive

23. financial

10. global

16. Analyzing outsourcing versus retaining an activity internally is often referred to as the                   

decision.

1. offshoring
2. purchasing
3. buy
4. make-or-buy

17. The new skill set required by purchasing agents in support of outsourcing includes all of the following except                                        .

18. improving communication with the supplier
19. developing metrics for soft performance issues
20. listening to the supplier’s concerns

D) contract management and negotiation skills

18. Ongoing evaluation and                     are important to keep an outsourcing arrangement on track, and stay in tune with the organization’s changing needs.

21. management

5. feedback

23. audit

10. arms length relationship

19.                        supply involves having one or a handful of distributors handle all of the items, rather than ordering from a huge number of manufacturers or small distributors.

21. Outsourced

5. Integrated

23. Insourced X) Global

20. When a firm wants to outsource but cannot find a qualified supplier, it may engage in              , the process of recruiting a supplier to provide an item or service.

1. 1000. outsourcing
   14. BPO
   15. reverse marketing
   16. 3PL

TRUE/FALSE

21. The concept of core competencies is applicable to the service sector as well as the manufacturing sector.  

22. Core competencies are not based on one simple factor, but how a whole host of decisions and internal competencies work together to provide products and services customers value.  

23. Outsourcing is no longer growing in importance and incidence every day.  

24. Insourcing is the process of moving an aspect of production, service, or business function from within an organization to an outside supplier.  

25. Firms may outsource activities that they feel are not core competencies.  

26. When the government or a public agency chooses to outsource, it is called privatization.  

27. Contract manufacturing involves a third party that makes an end product or major components under another company’s brand.  

28. Third-party logistics involves using a supplier to provide some combination of logistics activities such as transportation, warehousing, procurement, manufacturing, inventory management, and customer service.  

29. Offshoring is another name for outsourcing within the same country.  

30. Companies outsource to conserve capital, reduce operating costs and to focus on the core business.  

31. Assuming the business outsource a strategic activity, is it possible to lose your position in the market?  

32. Tactical risk is a long-term, perhaps irreversible, risk that may occur as a company loses the knowledge it once had related to its core activities.  

33. Strategic risks are short-term risks that occur when an organization relies on a supplier for capacity, but not necessarily knowledge.  

34. Some managers believe that the strategic risk of making a bad outsourcing decision is so high that it can make or break a company.  

35. Reverse marketing is the process of recruiting a supplier to provide an item or service.  

36. There are many potential risks associated with outsourcing that need to be identified and investigated both in the feasibility phase of outsourcing and during the make-or-buy analysis phase.