Question

A purchases noncore business activities from outside companies. Which of the following would be considered true about modular organizations? Check all that apply. a. They allow for more control over key business activities when they are outsourced.b. They can consist of suppliers, specialists, or consultants.c. They allow companies to strengthen their competitive advantage.d. They are more expensive to run than traditional organizations.

Answer 1

Answer:

The correct answer is letter "B" and "C": They can consist of suppliers, specialists, or consultants; They allow companies to strengthen their competitive advantage.

Explanation:

Modular organizations are those that outsource part of their operations but connect all the units of work in such a way that does not affect the production process of the business. The company's subunits are composed of employees from different levels but managerial positions are always assigned in the parent organization.

Modular organizations mainly implement this approach in an attempt of reducing costs which could provide them a comparative advantage if the firm can produce at the lowest opportunity costs available.