Question

The strategic view of global sourcing suggests that ________.

A) just as firms achieve gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, they also obtain the means to turn around failing businesses, speed up innovation, restructure operations, and fund otherwise-unaffordable development projects
B) firms that procure supplies from foreign subsidiaries are more likely than not to lose ground to competitors who primarily bank on their own resources
C) a strong legal environment is not the prerequisite for increasing efficiencies by relocating strategic operations abroad
D) the firms' innovative activities tend to make mature products obsolete over time"

Answer 1

Global sourcing is a strategic corporate endeavor that goes beyond seeking just lower labor costs; it includes a range of factors such as efficiency gains, innovation, restructuring operations, and access to reliable suppliers, among others, while also influencing the dynamic of comparative advantages in international trade.

Step-by-step explanation:

The strategic view of global sourcing suggests that firms achieve gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, as well as obtaining the means to turn around failing businesses, speed up innovation, restructure operations, and fund development projects that would otherwise be unaffordable. Thus, global sourcing is not solely about the costs of labor or capital, or regulatory environments, but rather encompasses a myriad of strategic decisions made by firms in efforts to maintain competitiveness. These include considering proximity to reliable suppliers, customer bases, quality of infrastructure, tax levels, and governance quality. Furthermore, the shift toward global sourcing can alter the traditional comparative advantages countries hold by introducing dynamic changes in how economies of scale and specialized learning affect worker productivity, thereby outlining a landscape that requires flexibility and adaptation to ongoing changes in global markets.