Which statement best captures the effect of outsourcing on strategic focus?

• A. Outsourcing saves cost and time and allows focus on strategy.
• B. Outsourcing reduces the company's ability to compete.
• C. Outsourcing eliminates the need for training.
• D. Outsourcing always increases internal headcount.

Answer: (A)

Outsourcing frees scarce internal resources to concentrate on strategic priorities. By shifting routine or non-core activities to external experts, a company can often lower costs and shorten delivery times, which in turn lets leadership devote more energy to high-value work such as differentiating capabilities, innovation, and long-term planning. This realignment of effort is what strengthens strategic focus and, when done well, supports broader competitive goals.

The other statements don’t fit as well: outsourcing doesn’t inherently reduce competitiveness; it can enhance it by enabling faster, more focused execution. It doesn’t eliminate the need for training—there’s still a need to train staff to manage the external relationship and ensure smooth interfaces. And it doesn’t always increase internal headcount; in fact, it often reduces headcount for the outsourced functions.