Question

There is an increasing trend among many U.S. companies to outsource customer care services to places such as India because _____ in those countries.

		a. there is more capital
		b. the labor costs are lower
		c. there is better technology
		d. the quality of work is superior

2. The practice of offsets is common in which industry?

a. Local print media

b. Handicrafts

c. Commercial aerospace

d. Real estate

Which of the following companies would do well to pursue a global standardization strategy?

		a. A company manufacturing rubber tires
		b. A furniture manufacturer
		c. A clothing store
		d. A car manufacturer

Answer 1

1. B. the labor costs are lower

Explanation: The firms outsource various low skill and manual works to countries like India where labor cost is low.

2. C. Commercial aerospace

Explanation: In offsets, a purchasing entity demands that the seller not only provides the goods but also transfer additional technology, know-how and investment. It is very common in commercial aerospace.

3.A. A company manufacturing rubber tires

Explanation: The demand for rubber tire is more homogeneous across countries as compared to cars, clothes and furniture.