Deck 12: Outsourcing: Managing Interorganizational Relations

Question 1

A partnering charter states the common goals for the project as well as the procedures that will be used to achieve these goals.

Answer 1

True

Question 2

It is a good idea to add a penalty clause to an outsourcing agreement to ensure that work is completed on time.

Answer 2

True

Question 3

In some countries, laws are considered to be guidelines that are not necessarily followed.

Answer 3

True

Question 4

It is rare in today's flat world to find important projects that are being completed totally in-house.

Question 5

Working in outsourcing teams, projects can be completed faster and more cheaply.

Question 6

When using the partnering approach to manage contracted relationships, each party's goals and objectives are similar but geared to what is best for them.

Question 7

In project negotiation each negotiator is out to win as much as he or she can for his or her side.

Question 8

When using the partnering approach to manage contracted relationships, access to each other's organization resources is available.

Question 9

Experience indicates that co-location of project teams is not worth the extra costs.

Question 10

Trust can be difficult to forge when interactions are limited and people come from different organizations.

Question 11

Co-location is less relevant for independent work that does not require ongoing coordination between professionals from different organizations.

Question 12

Principled negotiation emphasizes developing win / win solutions while protecting yourself against those who would take advantage of your forthrightness.

Question 13

Increased conflict and loss of coordination are typical disadvantages of outsourcing project work.

Question 14

In the traditional method of managing projects, total company involvement requires commitment from CEO to team members.

Question 15

Toyota and DaimlerChrysler collaborating with suppliers to develop new automobile platforms is an example of outsourcing.

Question 16

Project managers need to have the capability to manage customer expectations and perceptions.

Question 17

A prime consideration in choosing outsourcing vendors is to assess the fit with their project management system.

Question 18

Conflict is inevitable on a project; however, if it is handled effectively, it can elevate performance.

Question 19

In order to keep the customer happy and to keep perceptions about performance high, it is acceptable to falsely assure customers that everything is on track, especially if you feel that the problem will be resolved soon.

Question 20

Participants from different organizations working closely together at the construction site or in shared office space are an example of a virtual team.

Question 21

Which of the following is NOT an advantage of establishing a long-term partnership?

A) More efficient utilization of resources
B) Reduced administration costs
C) Improved innovation
D) Risk is eventually transferred to the other party
E) Improved performance

Question 22

Which of the following is NOT a key to successful partnering relationships?

A) Mutual trust
B) Jointly shared risk
C) Total company involvement
D) Independent project teams
E) Long-term commitment

Question 23

When negotiating, the tendency is to want to win! Why is this not a good approach when managing contracted relationships?

A) this approach inhibits the degree of trust and cooperation needed for the alliance to work.
B) a noncompetitive approach can bring about functional conflict.
C) this approach can cause dysfunctional conflict to rise and negotiations to break down.
D) because people will continue to work together after negotiations.
E) All of these are reasons a competitive approach to negotiation should not be used when managing contracted relationships.

Question 24

Outsourced projects are less about reduced costs and more focused on bringing the best talent available to get the job done.

Question 25

The following are differences between the partnering approach and the traditional approach to managing contracted relationships EXCEPT

A) mutual trust forms in the partnering approach where suspicion and distrust are prominent in the traditional approach.
B) contracts establish long-term commitments in the partnering approach while single project contracting is normal in the traditional approach.
C) access to each other's organization resources is available in the partnering approach but limited in the traditional approach.
D) risk is shared jointly among partners in a partnering approach but is transferred to the other party in the traditional approach.
E) the partnering approach entails significant time and energy while a handshake is satisfactory in the traditional approach.

Question 26

Advantages of outsourcing project work may likely include all of the following EXCEPT

A) shortened project duration.
B) reduced costs.
C) higher level of expertise.
D) reduced conflict.
E) increased flexibility.

Question 27

Why are extensive training and team building activities important when managing contracted relationships?

A) Extensive training and team building activities are not worth the effort because people issues will usually work themselves out over time.
B) So team members are provided with a theoretical understanding of the barriers to collaboration as well as the skills and procedures to be successful.
C) So conflict management processes can be put into place.
D) So teams can still function together when co-location is not important for project success.
E) So teams can identify difficult individuals and keep their distance during the project.

Question 28

The best defense against unreasonable, win / lose negotiators is having what Fisher and Ury call a strong BATNA.

Question 29

Disadvantages of outsourcing project work may likely include all of the following EXCEPT

A) increased conflict.
B) coordination breakdowns.
C) increased costs.
D) loss of control.
E) more internal morale issues.

Question 30

When you call your Internet provider to solve a technical problem and you end up talking to a technician in India or Romania, you have just experienced

A) telecommunications.
B) partnering.
C) outsourcing.
D) service shift.
E) bilingual customer service.

Question 31

When separating the people from the problem, negotiators don't react to the emotional outburst, but try to find the issues that triggered it.

Question 32

Best practices in outsourcing project work include all the following EXCEPT

A) well-defined requirements and procedures.
B) training and team-building activities.
C) well-established conflict management processes.
D) frequent reviews and status updates.
E) short-term, no-pressure outsourcing relationships.

Question 33

Key practices in the partnering approach to managing contracted relationships include

A) single project contracting.
B) risk being transferred to the other party.
C) access to each other's organizational resources.
D) structured communications.
E) independent project teams.

Question 34

Which of the following is the BEST way to ensure that cohesion and cooperation are not undermined, and the parties involved will be satisfied when the project is complete?

A) Long-term outsourcing relationships
B) Good negotiation practices
C) Well-established conflict management processes in place
D) Frequent review and status updates
E) Fair and incentive-laden contracts

Question 35

Which of the following is true in regard to negotiation when managing projects?

A) It is a competitive contest.
B) Each negotiator should win as much as he or she can for his or her side.
C) If project managers are not able to win negotiations, they will not be viewed as effective leaders.
D) Success is measured by how much is gained compared to the other party.
E) It cannot be viewed as a contest.

Question 36

Security issues on an outsourced project can be mitigated with a properly written contract.

Question 37

A value of 1.5 is the optimal target for the Met-Expectations model of customer satisfaction.

Question 38

The transferring of business functions or processes to other companies has traditionally been known as

A) subcontracting.
B) downsizing.
C) partnering.
D) joint venture.
E) outsourcing.

Question 39

Outsourced projects are susceptible to conflicts since people are unaccustomed to working together. Which of the following is a primary control mechanism for dealing with and resolving problems?

A) Arbitration
B) Escalation
C) Collaboration
D) Mediation
E) Regulation

Question 40

Which of the following is part of the traditional approach to managing contracted relationships?

A) Structured communications
B) Long-term commitment
C) Total company involvement
D) Shared risk
E) Mutual trust

Question 41

When interacting with the customer, it is important that the project manager

A) show the customer your knowledge on the subject by using technical terms.
B) speak slowly and in precise terms.
C) speak the language of the customer.
D) allow only one person from the project team to communicate with the customer.
E) ask the customer to repeat important details.

Question 42

When considering principled negotiation, keeping focus on the issues even when people become upset, frustrated, and even angry is an example of

A) separating people from the problem.
B) being honest and forthright.
C) focusing on interests, not positions.
D) inventing options for mutual gain.
E) using objective criteria.

Question 43

A key element to any conflict management process is

A) defined boundaries.
B) resolution.
C) escalation.
D) a charter.
E) a request for proposal.

Question 44

Which of the following is NOT an element of good negotiation?

A) Be hard on the problem, soft on the people
B) Conflict on a project can be good
C) Negotiation is not a contest
D) Seek first to understand, then to be understood
E) Avoid dealing with unreasonable people

Question 45

When considering principled negotiation, when one person identifies options that are of low cost to them but of high interest to the other party, this is an example of

A) separating people from the problem.
B) being honest.
C) focusing on interests, not position.
D) inventing options for mutual gain.
E) when possible, using objective criteria.

Question 46

Mathematically, customer satisfaction is a function of the extent to which perceived performance exceeds expectations. A customer satisfaction ratio of .95 indicates that a customer is

A) very satisfied.
B) slightly satisfied.
C) neutral-expectations were met.
D) slightly dissatisfied.
E) very dissatisfied.

Question 47

The following are ways a project manager can manage a customer's expectations and perceptions EXCEPT

A) avoid the temptation to oversell the virtues of the project to win approval.
B) make sure to develop a well-defined scope statement.
C) delay communicating problems that you feel can be resolved without involving the customer.
D) share significant risks that might disrupt project execution.
E) make sure that customer interactions are handled in a competent and professional manner.

Question 48

Principled negotiation emphasizes developing win / win solutions while protecting yourself against those who would take advantage of your forthrightness. Which of the following is NOT one of the key points of principled negotiation?

A) Use objective criteria when possible
B) Be honest and forthright
C) Focus on interests, not positions
D) Separate the people from the problem
E) Invent options for mutual gain

Question 49

Co-locating staff for a project is a good strategy to

A) reduce travel time.
B) reduce team friction.
C) reduce overhead cost.
D) increase MBWA.
E) increase project duration.

Question 50

When considering principled negotiation, revealing why you are trying to achieve something instead of demanding what you want or need is an example of

A) separating people from the problem.
B) being honest.
C) focusing on interests, not position.
D) inventing options for mutual gain.
E) when possible, using objective criteria.

Question 51

When considering principled negotiation, both buyers and sellers relying on the blue book to establish price parameters of a used car would be an example of

A) focusing on interests, not positions.
B) inventing options of mutual gain.
C) being honest and forthright.
D) using objective criteria.
E) separating the people from the problem.

Question 52

What does the acronym BATNA stand for?

A) Best alternative to a negotiated agreement
B) Be able to negotiate an agreement
C) Better ability to negotiate an agreement
D) Best ability to have a negotiated agreement
E) Better agree than no agreement

Question 53

Ultimate success of the project is determined by

A) whether the project was completed on time.
B) whether the customer is happy.
C) whether the project meets specifications.
D) whether the project was under budget.
E) whether the project served the purpose it intended.

Question 54

Long-term partnerships will provide all the following EXCEPT

A) improved communication.
B) more efficient utilization of resources.
C) reduced communication requirements.
D) lower administrative costs.
E) improved innovation.

Question 55

Which of the following is suggested as the best target for a customer satisfaction ratio?

A) 1.00
B) 1.05
C) 1.10
D) 1.20
E) 1.50

Question 56

What is the fundamental difference between a fixed-price and a cost-plus contract?

A) On fixed-price contracts partnering is used while it is not used for cost-plus contracts.
B) On fixed-price contracts macro estimates are used while micro estimates are used for cost-plus contracts.
C) No scope changes are made on fixed-price contracts while scope changes are allowed for cost-plus contracts.
D) On fixed-price contracts the cost is set in advance while for cost-plus contracts it is established after the project is completed.
E) On fixed-price contracts contractors are used while on cost-plus contracts no external contractors are used.

Question 57

The result of team building among the project's participants that states their common goals for the project as well as the procedures that will be used to achieve these goals is a

A) signed contract.
B) legal partnership agreement.
C) project plan.
D) partnering charter.
E) responsibility matrix.

Question 58

Customer satisfaction can be quantified by

A) perceived performance divided by actual performance.
B) actual performance divided by expected performance.
C) perceived performance divided by expected performance.
D) actual performance divided by perceived performance.
E) expected performance divided by actual performance.

Question 59

Regarding outsourcing, the most effective way to avoid problems with schedules and deadlines is to

A) develop detailed schedules.
B) hold frequent status reviews.
C) add a penalty clause to the contract.
D) hold frequent conversations with the outsourcer.
E) build extra time into the schedules that the outsourcer is not aware of.

Question 60

Which of the following is NOT a reason to have a BATNA?

A) It increases the chance that you will win the negotiation.
B) It gives you the power to walk away.
C) It can reduce how dependent you are on the other party.
D) It increases the likelihood of coming to a win / win agreement.
E) It is a good defense against unreasonable win / lose negotiators.

Question 61

Projects are more prone to conflict when outsourcing project work. The primary control mechanism for dealing with and resolving problems is known as _________.

A) de-escalation
B) conflict resolution
C) escalation
D) mutual dialogue
E) communication

Question 62

Outsourcing project work requires

A) the need to reduce costs.
B) willingness to accept an inferior product.
C) strong management and leadership.
D) a very focused scope.
E) a willingness to work with people outside the country.

Question 63

Contracting project services can increase a firm's _________ by no longer being constrained by their own resources.

A) pliability
B) moldability
C) creativity
D) flexibility
E) innovativeness

Question 64

The team-building sessions often conclude with the creation of a partnering _________ signed by all of the participants.

A) contract
B) communication agreement
C) legal document
D) charter
E) collaboration agreement

Question 65

When using the partnering approach to manage contracted relationships, ________ is shared jointly among the partners, which encourages innovation and continuous improvement.

A) opportunity
B) risk
C) vision
D) communication
E) collaboration

Question 66

Since different participants do not share the same values, priorities, and culture, projects are more prone to interpersonal ___________ when outsourcing.

A) conflict
B) communication
C) competition
D) contracting
E) consistency

Question 67

Whether a client is dissatisfied or delighted with a project is not based on hard facts and objective data but on perceptions and _________.

A) understanding
B) comprehension
C) expectations
D) discernment
E) appreciation

Question 68

In order to be even moderately successful at managing relations, a project manager needs to be skilled at managing customer ___________ and ____________ .

A) expectations; perceptions
B) budget; schedule
C) fears; concerns
D) jargon; competency
E) surveys; feedback

Question 69

In the traditional approach to managing contracted relationships, ________ are structured and guarded.

A) communications
B) innovations
C) inventions
D) patents
E) collaborations

Question 70

The term __________ has traditionally been applied to the transferring of business functions or processes to other, often foreign, companies.

A) offshoring
B) off-campus
C) off-premises
D) outsourcing
E) contracting

Question 71

Not only can contracted project work be cheaper, it can also be done __________.

A) faster
B) with better quality
C) with less conflict
D) with less complexity
E) All of these alternatives are correct.

Question 72

In the traditional approach to managing contracted relationships, _________ project contracting is normal.

A) multiple
B) dual
C) single
D) creative
E) sequential

Question 73

An organization that has identified an opportunity for long-term outsourcing can expect

A) better communication.
B) lowered administrative costs.
C) improved utilization of resources.
D) increased lead times.
E) All of these alternatives are correct.

Question 74

A company no longer has to keep up with technological advances. High levels of __________ and technology can be brought onto a project by using contracted services.

A) skill
B) expertise
C) proficiency
D) know-how
E) consulting

Question 75

When using the partnering approach to manage contracted relationships, mutual ________ forms the basis for strong working relationships.

A) respect
B) collaboration
C) communication
D) creativity
E) trust

Question 76

Outsourcing project work to a supplier with questionable labor practices can cause a situation called

A) deterministic deliverables.
B) outsourced experience.
C) political hot potato.
D) realized risk.
E) loss of control.

Question 77

Advantages to outsourced project work can include

A) better project control.
B) better expertise.
C) faster time to market.
D) making in-house expertise more competitive.
E) both better expertise and faster time to market.

Question 78

Cost __________ is a major advantage of outsourcing project work because companies can secure competitive prices for contracted services, especially if the work can be outsourced offshore.

A) clarity
B) certainty
C) reduction
D) depletion
E) variance

Question 79

When outsourcing project work, coordination __________ are intensified by physical separation with people working in different buildings, different cities, if not different countries.

A) accommodations
B) details
C) issues
D) conflicts
E) breakdowns

Question 80

More and more companies are using online _________ to collect data from all project participants about the quality of working relations.

A) questionnaires
B) surveys
C) interviews
D) focus groups
E) measurement instruments