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FSOT Full Test Bank

Category - Management

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Which of the following is a strategic risk associated with outsourcing?

Loss of non-vital skills
Loss of critical skills
Reduced personnel cost
Decreased personnel flexibility

Explanation

Answer: B - The loss of critical skills is a strategic risk associated with outsourcing. If the contracting company goes out of business, starts working for a competitor or asks for unreasonable terms, a company that has lost in-house critical skills could be in a dangerous strategic position.

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