All of the following are reasons for outsourcing work except...

Question

Options

• AYour company doesn't have excessive capacity for the work
• BYour company doesn't possess the skills needed for the work
• CYour company isn't concerned about protecting the information associated with the work
• DLabor rates in the foreign countries are comparable to your company's labor rate

• A
  4% (1)
• B
  4% (1)
• D
  92% (23)

Explanation

If labor rates in foreign countries are comparable to your own company's rates, there is no cost advantage to outsourcing - eliminating the most common financial justification. This means it is NOT a reason to outsource. The other options are all valid outsourcing drivers: lacking internal capacity (A) forces you to seek external resources; lacking the required skills (B) means you need specialized expertise you don't have; and not having confidentiality concerns (C) removes a common barrier to outsourcing, making it a viable option. Comparable labor costs provide no incentive to outsource.

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