1. When companies outsource key activities, an inherent risk is that the quality of the performance of the contractors is not up to the standards of the firm.

True

False

2. Organizations must have effective strategic controls if they are to successfully implement their strategies; thus, strategic controls monitors and corrects a firm's strategy and performance. There are two approaches to strategic control: (1) informal, and (2) behavioral control.

True

False

3. A holding company differs from a strategic business unit in that it does not hinge on similarities within the corporation's businesses. In addition, a holding company may offer an attractive cost savings feature with fewer duplications of personnel, thus lowering overhead costs.

True

False