Question

A major reason outsourcing is effective is that a. few firms possess superior capability in all primary and support activities. b. it permits unlimited access to capital resources. c. competitors do not have access to the same external sources. d. it increases the innovative potential of the firm.

Answer 1

Answer: Option A

Explanation: Outsourcing refers to business practice in which the company transfers some of the activities, which were earlier performed by its own employees, to another company or an individual.

This transfer of work is done for mainly two reasons. The first is for cheap labor cost and the second is for the benefit of specialization.

Hence from the above we can conclude that the correct option is A.