Answer the following statement(s) true (T) or false (F)

Question

1. Core processes have a direct impact on an organization’s customers, are major cost drivers, and are essential for providing services.

2. Outsourcing service providers have a higher cost structure due to greater economies of scale, specialization, or expertise.
3. The fundamental costs of doing business in a developing country are higher than those in a developed country.
4. Substantive law is the part of the law that creates, defines, and regulates rights, including the law of contracts.
5. All countries have the same stance on the protection of corporate data, copyrights, patents, and trade secrets.

Answer 1

1.True
RATIONALE: A core business process is one that provides valuable customer benefits, is hard for competitors to imitate, and can be leveraged widely across many products and markets. It takes the unique knowledge and skills of the organization’s workers to operate these processes effectively. They have a direct impact on the organization’s customers, are major cost drivers, and are essential for providing services.
2.False
RATIONALE: Outsourcing service providers have a lower cost structure due to greater economies of scale, specialization, or expertise, which means they can perform the work at a much lower cost than their clients. In addition, the fundamental costs of doing business in a developing country are much lower than those in a developed country.
3.False
RATIONALE: The fundamental costs of doing business in a developing country—employee health care, retirement, and unemployment; taxes; and environmental and regulatory compliance—are much lower than those in a developed country. Such cost advantages tip the scales in favor of offshore outsourcing.
4.True
RATIONALE: Substantive law is the part of the law that creates, defines, and regulates rights, including the law of contracts.
5.False
RATIONALE: Various countries have widely divergent stances on the protection of corporate data, copyrights, patents, and trade secrets. An organization should consider whether the country has laws that will protect the firm’s intellectual property; also, it must determine whether the laws are actually enforced.