Question

Which of the following are reasons a company may outsource its operations?

1) to have greater control over its operations
2) to access specialized skills
3) to comply with foreign government regulations
4) to avoid trade barriers

Answer 1

A company may outsource its operations to access specialized skills, comply with foreign regulations, or avoid trade barriers, but not typically to gain greater control over its operations.

Step-by-step explanation:

Companies may choose to outsource operations for several reasons, which can include the desire to access specialized skills that are not available in-house or are more cost-effectively sourced from an external provider. Another reason for outsourcing is to avoid trade barriers, such as tariffs and quotas, by establishing operations in countries with more favorable trade agreements or lower barriers to market entry. Outsourcing can also be a strategic move to comply with foreign government regulations, which may be more easily met by partnering with local firms that have a better understanding of the legal landscape. It is not typically carried out to gain greater control over operations, as outsourcing often involves relinquishing some level of control to the third-party provider.