Question

Explain briefly suitability of outsourcing to captive units and to third party service providers.

Answer 1

If the task of performing some activity is common and sufficiently large to all subsidiaries of a parent company to be done at a centralised place. It may be beneficial to outsource it to a captive unit whereas if the activity is to be done at a smaller scale, to be done by different independent service provider then the firm may resort to third-party outsourcing.