CHAPTER 12

QUESTION BANK

2022 – ZA – Q8

8. ‘Information Technology (IT) is now core to an international business. As such it cannot

be outsourced.’ Assess this statement as follows, using illustrative examples:

a) Define information technology and outsourcing. (4 marks)

b) What are the reasons for and against outsourcing IT activities? (8 marks)

c) What core IT capabilities need to be kept in-house in today’s international business? (8

marks)

d) Is it better to offshore IT work to a captive centre, or to a third-party IT service supplier?

(5 marks)

2021 – Autumn

Question 7

`Global sourcing of production, and of business and IT services is risky and needs a
strategy and very disciplined management practices.' Discuss this statement as
follows, using illustrative examples:

(a) Define Ghemawat's Arbitrage strategy, offshore outsourcing, and captive centre. (6 marks)

(b) Discuss the major advantages sought, and the major risks likely when offshore outsourcing production.
(10 marks)

(c) What management practices support e_ective o_shore outsourcing of business and IT services?
(9 marks)

2021 – Zone B – Q2
2. ‘Global sourcing of production and offshore outsourcing business and IT services are common
practices, but many international businesses are now, in 2021, realising they have gone too far.’ Using
illustrative examples, discuss this proposition as follows:

a) Define ‘make-or-buy decision’ ‘captive centre’ and ‘outsourcing.’ (3 marks)

b) What factors should an international business consider when looking at building
a production operation in a foreign country? (11 marks)
c) Assess the major risks in offshore outsourcing business and IT services, and
how these risks can be mitigated. (11 marks)

2019 ZB Q2
2. Make-or-Buy decisions, outsourcing and offshoring are important aspects of carrying out
international business. Therefore discuss the following:
a) In the context of international business, describe what is meant by a ‘Make-or-Buy’ decision.
(2
marks)
b) Assess under what conditions a ‘Make’ or a ‘Buy’ decision is more appropriate. Use examples from
industries and services as appropriate to illustrate your answer.
(10 marks)
c) What factors make the offshore outsourcing of global services or production attractive to a firm?
(6
marks)
d) What risks in offshore outsourcing should a firm take into account and try to mitigate?
(7 marks)

2018 ZA Q1:

1. ‘Global sourcing is a key part of any international business strategy.’ Discuss

using illustrative examples throughout:
a) In the context of international business, describe what is meant by a
‘Make-or-Buy’ decision. (2 marks)
b) Assess under what conditions a ‘Make’ or a ‘Buy’ decision is more appropriate. Use relevant examples
from service and/or manufacturing industries to support your answers. (8 marks)
c) Define outsourcing and offshoring, and assess the advantages a firm seeks by offshoring or offshore
outsourcing its back-office services (for example IT, human resources, procurement) to a country like
India or the Philippines. (7 marks)
d) What risks in offshore outsourcing should a firm take into account and how can these risks be
mitigated? (8 marks)

2017 ZB Q2:
2. ‘Global sourcing is a key part of any international business strategy. Make-or-buy, outsource and
offshoring are three key decision areas.’ Discuss this statement under the following headings, using
illustrative examples throughout:
a) In the context of international business, describe what is meant by a ‘Make-or-Buy’ decision.
(2 marks)
b) Assess under what conditions a ‘Make’ or a ‘Buy’ decision is more appropriate. Use relevant examples
from service and/or manufacturing industries to support your answers.
(9 marks)
c) What risks in offshore outsourcing should a firm take into account and how can these risks be
mitigated? (6 marks)
d) What factors make the offshore outsourcing of global services or production attractive to a firm?
(4 marks)
e) What are the advantages of establishing a captive centre offshore? (4 marks)

2016 ZA Q6:

7. ‘Offshore outsourcing of production and of back-office services is a vital but highly risky component
of international business strategy.’ Using illustrative examples, answer the following questions:

(a) Define outsourcing and assess why an international business would seek to outsource back-office
services or production. Use illustrative examples. (9 marks)
(b) What risks and challenges will an organisation incur when offshore outsourcing? Use illustrative
examples. (7 marks)
(c) How can these risks and challenges be reduced and managed? Use illustrative
examples to support your points. (9 marks)

2015 ZB Q4:

4. Offshore outsourcing of production and of business and IT services has greatly increased in the last 25
years. For business and IT services OR production, address this issue under the following headings:
(a) Define outsourcing and discuss, using examples, why an international business would seek to
outsource business and IT services or production. (9 marks)
(b) What risks and challenges is an organization likely to incur when offshore outsourcing? Use
illustrative examples. (7 marks)
(c) How can these risks and challenges be reduced and managed? Use illustrative examples to support
your points. (9 marks)

2014 ZA Q7
7. (a) In the context of international business, describe what is meant by a ‘Make-or-Buy’ decision.
(3 marks)
(b) Assess under what conditions a ‘Make’ or a ‘Buy’ decision is more appropriate. Use
examples from industries and services as appropriate to illustrate your answer.
 (10 marks)
(c) What factors make the offshore outsourcing of global services or production attractive to a firm?
(6 marks)
(d) What risks in offshore outsourcing should a firm take into account and try to mitigate?
(6 marks)