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Procurement > MODULE 5 > Flashcards

MODULE 5 Flashcards

1
Q

TITLE OF MODULE 5?

A

OUTSOURCING, RISK MANAGEMENT, AND PURCHASING STRATEGIES

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2
Q

True or False: Companies have been grappling with how to exploit their competitive advantage since the Industrial Revolution.

A

TRUE

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3
Q

True or False: The model for most of the 20th century was a small integrated company that could “own, manage, and directly control” its assets.

A

FALSE

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4
Q

True or False: The rallying cry in the 1950s and 1960s was for companies to specialize in their core business.

A

FALSE

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5
Q

True or False: By diversifying, companies expected to protect profits, even though expansion required multiple layers of management.

A

TRUE

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6
Q

True or False: Bloated management structures were not a handicap for organizations trying to compete globally in the 1970s and 1980s.

A

FALSE

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7
Q

True or False: Many large companies developed a new strategy of focusing on their core business in order to increase their flexibility and creativity.

A

TRUE

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8
Q

True or False: Identifying critical processes and deciding which could be outsourced was not a part of the strategy of focusing on core business.

A

TRUE

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9
Q

True or false: Outsourcing was recognized as a business strategy before 1989.

A

FALSE

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10
Q

True or false: Most organizations can be self-sufficient and do not need to outsource any functions.

A

FALSE

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11
Q

True or false: Publishers often purchase composition, printing, and fulfillment services from external suppliers.

A

TRUE

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12
Q

True or false: Outsourcing support services was the first stage in the evolution of outsourcing.

A

FALSE

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12
Q

True or false: Outsourcing support services was the first stage in the evolution of outsourcing.

A

FALSE

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13
Q

True or false: In the 1990s, organizations started outsourcing functions necessary to run a company but not related to the core business.

A

TRUE

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14
Q

True or false: Managers contracted with service companies to deliver accounting, human resources, and plant maintenance as a matter of “good housekeeping”.

A

TRUE

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15
Q

True or false: Outsourcing key functions does not affect cost savings.

A

FALSE

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16
Q

True or false: Managers do not seek to improve their finances by outsourcing components.

A

FALSE

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17
Q

True or false: The current stage of outsourcing is the outsourcing of core competencies.

A

FALSE

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18
Q

True or false: Outsourcing core functions is considered anathema in modern business.

A

FALSE

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19
Q

True or false: A core competency is defined as any function that gets close to customers.

A

TRUE

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20
Q

True or false: Outsourcing some core functions may be a good strategy in some cases.

A

TRUE

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21
Q

True or false: Some organizations outsource customer service because it is not important.

A

FALSE

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22
Q

True or false: Eastman Kodak’s decision to outsource its IT systems was not revolutionary.

A

FALSE

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23
Q

True or false: Eastman Kodak was the only major corporation to outsource its IT systems.

A

FALSE

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24
Q

True or false: The focus in outsourcing today is more on ownership than on developing strategic partnerships.

A

FALSE

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25
Q

True or false: Organizations are likely to select outsourcing based on who can deliver more effective results for a specific function rather than on whether the function is core or commodity.

A

TRUE

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26
Q

True or false: Outsourcing is the use of internal resources to perform activities traditionally handled by outside staff.

A

FALSE

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27
Q

True or false: Outsourcing involves the contracting out of major functions to specialized and efficient service providers.

A

TRUE

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28
Q

True or false: Companies have not always hired contractors for particular types of work.

A

FALSE

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29
Q

True or false: The difference between outsourcing and subcontracting is insignificant.

A

FALSE

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30
Q

True or false: The most common reasons to outsource in earlier periods were strategic drivers.

A

FALSE

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31
Q

True or false: Outsourcing can help companies reduce and control operating costs.

A

TRUE

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32
Q

True or false: Outsourcing is only used when there are insufficient resources available internally.

A

FALSE

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33
Q

True or false: The main reason companies outsource is to free internal resources for other purposes.

A

FALSE

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34
Q

True or false: Understanding company goals and objectives is not a critical factor for a successful outsourcing program.

A

FALSE

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35
Q

True or false: Selecting any vendor is fine for a successful outsourcing program.

A

FALSE

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36
Q

True or false: Open communication with affected individual/groups is not necessary for a successful outsourcing program.

A

FALSE

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37
Q

True or false: Senior executive support and involvement is not important for a successful outsourcing program.

A

FALSE

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38
Q

True or false: There are only three main aspects to a typical outsourcing program.

A

FALSE

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39
Q

True or false: Program closure is not one of the main aspects of a typical outsourcing

A

FALSE

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40
Q

True or false: Final Agreement is one of the main aspects of a typical outsourcing program.

A

TRUE

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41
Q

True or false: The Program Initiation Stage is concerned with implementing the outsourcing program.

A

FALSE

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42
Q

True or false: The purpose and scope of the outsourcing program are established during the Program Initiation Stage.

A

TRUE

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43
Q

True or false: The ideas and intentions about the outsourcing program are not documented during the Program Initiation Stage.

A

FALSE

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44
Q

True or false: The Program Initiation Stage is the final stage of the outsourcing program.

A

FALSE

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45
Q

True or false: The Program Initiation Stage involves drafting a contract based on the ideas and intentions of the outsourcing program.

A

TRUE

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46
Q

True or false: Service Implementation is concerned with developing ideas and intentions into a formal outsourcing program.

A

TRUE

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47
Q

True or false: Transferring staff is not one of the activities covered under Service Implementation.

A

FALSE

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48
Q

True or false: Service Implementation does not involve defining the Service Level Agreement (SLA).

A

FALSE

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49
Q

True or false: Service Implementation is not concerned with maintaining continuity of service during the hand-over phase.

A

FALSE

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50
Q

True or false: Quality of delivery and deadlines are not important during the hand-over phase of Service Implementation.

A

FALSE

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51
Q

True or false: The final Contract is produced during the Program Initiation stage.

A

FALSE

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52
Q

True or false: The draft contract is not amended during negotiations.

A

FALSE

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53
Q

True or false: The Final Agreement is produced on completion of the negotiation cycle.

A

TRUE

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54
Q

True or false: The negotiation cycle is not an important part of Final Agreement.

A

FALSE

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55
Q

True or false: Final Agreement does not involve any amendment to the draft contract.

A

FALSE

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56
Q

True or false: Program Closure involves continuing to argue lost causes.

A

FALSE

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57
Q

True or false: Formal filing of information is not required during Program Closure.

A

FALSE

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58
Q

True or false: It is not necessary for staff and companies to accept the new situation and move forward during Program Closure.

A

FALSE

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59
Q

True or false: Program Closure does not involve storing information for future reference.

A

FALSE

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60
Q

True or false: There is no need for a formal close down of the program in order to gain maximum benefit.

A

FALSE

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61
Q

True or false: There are simple criteria to conduct an outsourcing versus in-house analysis.

A

FALSE

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62
Q

True or false: Cost is the only consideration when deciding whether to outsource.

A

FALSE

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63
Q

True or false: Outsourcing allows organizations to be more efficient, flexible, and effective.

A

TRUE

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64
Q

True or false: Outsourcing does not help in reducing costs.

A

FALSE

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65
Q

True or false: One of the advantages of outsourcing is the ability to tap into best practices.

A

TRUE

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66
Q

True or false: Outsourcing does not involve knowledge transfer to permanent staff.

A

FALSE

67
Q

True or false: Outsourcing does not provide access to the flexibility and creativity of experienced problem solvers.

A

FALSE

68
Q

True or false: Outsourcing diverts focus from core competencies.

A

FALSE

69
Q

True or false: Business Process Outsourcing (BPO) involves the engagement of services from a first-party provider.

A

FALSE

70
Q

True or false: BPO can involve back-office activities such as payroll, accounting, and human resources.

A

TRUE

71
Q

True or false: BPO cannot involve front-office jobs such as customer service, sales, and marketing.

A

FALSE

72
Q

True or false: BPO can involve hiring remote writers, editors, or virtual assistants.

A

TRUE

73
Q

True or false: BPO slows down processes and decreases efficiency.

A

FALSE

74
Q

True or false: BPO allows companies to focus on their core services and competencies.

A

TRUE

75
Q

True or false: BPO does not help in improving customer satisfaction.

A

FALSE

76
Q

True or false: Companies find it impractical to hire a full-time position in-house because of the cost associated with doing so.

A

TRUE

77
Q

True or false: Business process outsourcing does not result in cost savings.

A

FALSE

78
Q

True or false: Outsourcing provides access to a bigger employment pool of talent.

A

TRUE

79
Q

True or false: Having a global presence through outsourcing increases trade opportunities.

A

TRUE

80
Q

True or false: Outsourcing does not reduce internal local labor and employment compliance obligations.

A

FALSE

81
Q

True or false: Outsourcing allows companies to leverage the skills of other specialist companies.

A

TRUE

82
Q

True or false: Outsourcing hinders the client company’s ability to focus on their core functions.

A

FALSE

83
Q

True or false: A realtor hiring a virtual assistant for appointment scheduling and customer inquiries is an example of business process outsourcing.

A

TRUE

84
Q

True or false: Telecommunication companies outsourcing customer service teams for technical and billing support is an example of business process outsourcing.

A

TRUE

85
Q

True or false: Small businesses outsourcing lead generation to gather more customers locally and overseas is not an example of business process outsourcing.

A

FALSE

86
Q

True or false: Hiring professionals locally for complex tasks can be expensive due to scarce demand.

A

TRUE

87
Q

True or false: Entrepreneurs and small teams may need additional training or a professional license to accomplish complex tasks.

A

TRUE

88
Q

True or false: Professional outsourcing is not a solution for tasks that require specialized skills or licenses.

A

FALSE

89
Q

True or false: Accountants and bookkeepers are hired only to comply with annual tax filing and income statements.

A

FALSE

90
Q

True or false: CAD operators and engineers cannot do building layout, including floor plans and mechanical designs.

A

FALSE

91
Q

True or false: Outsourcing marketing to professionals can lead to better management of promotions and marketing strategies.

A

TRUE

92
Q

True or false: Offshoring IT services is not a common type of outsourcing.

A

FALSE

93
Q

True or false: IT outsourcing involves contracting technology-related services and resources for a part or the entirety of an information technology business function.

A

TRUE

94
Q

True or false: Every business, regardless of its size, has no IT needs.

A

FALSE

95
Q

True or false: Alibaba outsourced software developers locally at first.

A

FALSE

96
Q

True or false: Slack’s platform interface is outsourced to a software development company in the United States.

A

FALSE

97
Q

True or false: Telecommunication companies have been outsourcing IT infrastructure to India and the Philippines to improve their capacity and better their services.

A

TRUE

98
Q

True or false: Multi-sourcing is commonly applied only in sectors of high specialism and/or complexity.

A

TRUE

99
Q

True or false: Multi-sourcing involves combining outsourcing output from dedicated specialized companies to create a finished product.

A

TRUE

100
Q

True or false: Multi-sourcing does not require a comprehensive strategy and a network of governance and relationships.

A

FALSE

101
Q

True or false: Multi-sourcing forms teams that are not focused on achieving business goals.

A

FALSE

102
Q

True or false: Making your own products in-house is a cost-effective option.

A

FALSE

103
Q

True or false: The cost of raw materials and factory workers can be high if you make your own products in-house.

A

TRUE

104
Q

True or false: Outsourcing the manufacturing process can help you reduce costs.

A

TRUE

105
Q

True or false: You still need to pay for infrastructure and equipment if you outsource the manufacturing process.

A

FALSE

106
Q

True or false: Labor costs are not a concern if you outsource the manufacturing process.

A

FALSE

107
Q

True or false: Apple designs and manufactures its products in China.

A

FALSE

108
Q

True or false: H&M and Zara produce their clothing products in their own factories.

A

FALSE

109
Q

True or false: Ikea outsources the manufacturing of their furniture to China to reduce costs.

A

TRUE

110
Q

True or false: Outsourcing allows tasks to be completed faster and with better quality output due to specialized expertise and equipment.

A

TRUE

111
Q

True or false: Outsourcing supporting processes can help organizations focus more on strengthening their core business process.

A

TRUE

112
Q

True or false: Outsourcing can mitigate risks by allowing the organization to shift certain responsibilities to the outsourced vendor who is a specialist in risk-analysis.

A

TRUE

113
Q

True or false: Outsourcing can increase recruitment and operational costs.

A

FALSE

114
Q

True or false: Outsourcing HR, Payroll and Recruitment services can expose confidential company information to a third-party.

A

TRUE

115
Q

True or false: Choosing the wrong outsourcing partner can result in stretched delivery time frames, sub-standard quality output, and inappropriate categorization of responsibilities.

A

TRUE

116
Q

True or false: Hidden costs can be a serious threat when signing a contract for outsourcing across international boundaries.

A

TRUE

117
Q

True or false: An outsourced vendor may lack complete focus on an organization’s tasks due to catering to the needs of multiple organizations at a time.

A

TRUE

118
Q

True or false: The Oxford English Dictionary definition of risk only includes negative consequences.

A

FALSE

119
Q

True or false: The Institute of Risk Management defines risk as the combination of probability and consequence.

A

TRUE

120
Q

True or false: ISO Guide 73 is a guide to risk management definitions.

A

TRUE

121
Q

True or false: The IIA defines risk as the certainty of an event occurring.

A

FALSE

122
Q

True or false: Health and safety professionals define risk as a combination of likelihood and magnitude.

A

TRUE

123
Q

True or false: Corporate objectives are always fully stated by most organizations.

A

FALSE

124
Q

True or false: Personal objectives set for staff in an organization tend to refer to routine operations.

A

FALSE

125
Q

True or false: Risk can be related to opportunity, hazard, or uncertainty.

A

TRUE

126
Q

True or false: Hidden costs are not a disadvantage of outsourcing.

A

FALSE

127
Q

True or false: Outsourcing always results in reduced operational and recruitment costs.

A

FALSE

128
Q

True or false: Risks are always associated with negative outcomes.

A

FALSE

129
Q

True or false: Risks can only result in uncertainty and never in positive outcomes.

A

FALSE

130
Q

True or false: Hazard risks are also known as speculative risks.

A

FALSE

131
Q

True or false: Control risks are also known as uncertainty risks.

A

TRUE

132
Q

True or false: Opportunity risks are also known as pure risks.

A

FALSE

133
Q

True or false: Every risk requires the same management or analysis approach.

A

FALSE

134
Q

True or false: Taking a proactive approach to risk and risk management will only lead to improvement in operations.

A

FALSE

135
Q

True or false: The events in the world financial system during 2008 had no impact on organizations’ interest in risk and risk management.

A

FALSE

136
Q

True or false: By considering risks involved in alternatives and delivering process changes effectively, processes will become less effective.

A

FALSE

137
Q

True or false: The risks associated with different strategic options can be fully analyzed to make better strategic decisions.

A

TRUE

138
Q

True or false: Stakeholders expect organizations to take full account of risks that may cause disruption within operations, but not failure to deliver strategy.

A

FALSE

139
Q

True or false: The likelihood and impact of a risk can be used to define the exposure presented by that risk.

A

TRUE

140
Q

True or false: As risk exposure increases, likely impact will decrease.

A

FALSE

141
Q

True or false: It is no longer acceptable for organizations to find themselves in a position where unexpected events cause financial loss and damage to reputation.

A

TRUE

142
Q

True or false: Risk management can only help reduce the damage caused by events that can cause disruption to normal efficient production operations.

A

FALSE

143
Q

True or false: The term “efficacious” refers to the fact that the strategy developed will be fully capable of delivering the required outcomes.

A

TRUE

144
Q

True or false: Hazard risks can have positive outcomes.

A

FALSE

145
Q

True or false: Hazard risk management is not related to the management of insurable risks.

A

FALSE

146
Q

True or false: Hazard risks can only cause disruption to normal operations.

A

FALSE

147
Q

True or false: Hazard risks are not related to business dependencies such as IT and other supporting services.

A

FALSE

148
Q

True or false: Theft and fraud are not significant hazard risks for many organizations.

A

FALSE

149
Q

True or false: Different organizations have the same attitudes to risk.

A

FALSE

150
Q

True or false: The attitude of an organization to risk is dependent on the sector and the nature of the marketplace.

A

TRUE

151
Q

True or false: An organization may be considered to be risk aggressive because it has decided to pursue a high-risk opportunity.

A

TRUE

152
Q

True or false: One of the major contributions from successful risk management is to ensure that strategic decisions are taken with all of the available information.

A

TRUE

153
Q

True or false: Improvement in decision-making processes is not one of the key benefits of risk management.

A

FALSE

154
Q

True or false: Hazard risks are the risks that can only enhance the achievement of the corporate mission.

A

FALSE

155
Q

True or false: Control risks are associated with uncertainty, and examples include the potential for legal non-compliance and losses caused by fraud.

A

TRUE

156
Q

True or false: Opportunity risks are the risks that are usually avoided by the organization.

A

FALSE

157
Q

True or false: Control risks are the easiest type of risk to describe.

A

FALSE

157
Q

True or false: Control risks are the easiest type of risk to describe.

A

FALSE

158
Q

True or false: Organizations with a large appetite for opportunity investment may have a small hazard tolerance.

A

TRUE

159
Q

True or false: Organizations should be tolerant of health and safety risks.

A

FALSE

160
Q

True or false: Organizations should take all appropriate actions to eliminate health and safety risks.

A

TRUE

161
Q

True or false: Organizations manage safety risks to the highest possible level.

A

FALSE

162
Q

True or false: Hazard risks do not result in unplanned disruption for the organization.

A

FALS

163
Q

True or false: Disruptive events should always be avoided, regardless of the circumstances.

A

FALSE

164
Q

True or false: The desired state in hazard risk management is to have no unplanned disruption or inefficiency.

A

TRUE

Procurement (6 decks)

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