Question

1. The role of managers in corporate level strategy is to:

1. Identify markets or industries in which a company should compete to maixmise long term profitability
2. Invent products that ensure the long run success of the company
3. Use their corporate power to ensure the profitability of functional level strategies
4. All the above
5. None of the above

2. outsourcing can add value to the product provided to the customers

true

false

Answer 1

The correct answer is a.

Corporate level strategy is nothing but the strategic decisions taken by the business that has direct effect on the entire organization. Example - A toy manufacturer producing only one line of toy is its corporate strategy. The three types of corporate level strategy include: -Value-creating strategy, Value-neutral strategy and Value-reducing strategy. The main purpose of corporate level strategy include: -

It guides all the individual business units that belong to the organization as a whole.

it synchronize various business level strategies and balance them in order to achieve the vision of the entire organization.

The answer is true.

Outsourcing refers to contracting the business activity to the third party in order to save cost. The business activities that can be outsourced include payroll, accounting, etc.

Outsourcing is of two types. They are:-

• Back office outsourcing - this include internal business function and organization services.. Example- billing.
• Front office outsourcing - this include customer service and deals with customer interaction.

The three factors that a firm should consider when making outsourcing decision are: -

• Cost saving and time saving - Business should consider whether outsourcing business process to the third party would provide cost advantage or not. In order to perform particular activity, organization needs to recruit, train, develop employees with specific skills which require both money and time. Outsourcing this activity to third party will help the organization to save money and time and to utilize the same on core business. Example - company outsourcing the telemarketing to third party who are expert in this field.
• Technology - The decision to outsource should also be made by analyzing the technology of vendor. Advanced technology would help in improving the quality of service because of the latest technology integrated in business process. This makes the organization efficient and effective. Example - company outsourcing market research activity to the third party which use latest technology to provide fast and accurate results.
• Human resource - Proper analysis of human resource is important to understand whether they are well-trained to execute the outsourced tasks successfully. The third party perform that particular task that has been outsourced by the organization as they have the skills that is required to fulfill that specific business activity. Since they are expert in this field, it will help in improving the speed and efficiency of the process. Example - helpdesk service are being outsourced to provide fast and quality service to the customers.