Question

Most companies cite cost cutting as the main reason for global sourcing.

a) True
b) False

Answer 1

The statement is true. Companies often engage in global sourcing to reduce costs and increase profitability.

Step-by-step explanation:

The statement "Most companies cite cost cutting as the main reason for global sourcing." is True.

Companies often engage in global sourcing to reduce costs by taking advantage of lower labor costs, cheaper production facilities, or tax incentives offered by other countries. By relocating production or outsourcing certain tasks to countries with lower costs, companies can save money and increase their profitability.

For example, companies may choose to establish manufacturing plants in countries where labor costs are lower, allowing them to produce goods at a lower cost. Likewise, companies may outsource some business functions, such as customer service or data processing, to countries with lower wages, reducing their operational expenses.