Management Information System (MIS) Practice Exam

Which statement would strengthen the decision for TransCorp to outsource payroll processes?

1. Companies in other countries can do the same amount of work at a comparable cost.

2. Outsourcing has become a trend among most firms in developed nations.

3. Companies in other countries are more efficient in all aspects of work, along with lower cost.

4. The firm is enjoying good profit margins.

The correct answer is: Companies in other countries are more efficient in all aspects of work, along with lower cost.

The chosen statement enhances the case for TransCorp to outsource payroll processes by emphasizing two critical factors: efficiency and cost. By stating that companies in other countries are not only more efficient but also offer lower costs, it suggests a clear financial incentive for outsourcing. Efficiency typically relates to higher productivity levels, which can result in faster processing times and fewer errors—both vital for payroll management. Outsourcing to more efficient firms can also lead to better-quality results, enhancing overall organizational performance. The mention of lower costs implies that TransCorp could achieve significant savings on operational expenses, which is a primary consideration for businesses evaluating outsourcing options. This strategic decision could free up internal resources, allowing TransCorp to focus on core business activities rather than administrative functions, ultimately improving profitability and operational effectiveness. The other statements, while providing some supportive context for outsourcing, do not effectively encapsulate the strong financial and operational merits that the selected statement highlights. For instance, merely indicating that outsourcing is a trend does not directly address the specific benefits TransCorp might experience, such as improved efficiency and cost savings.