In the context of this proposal, what are the transaction costs that would need to be considered by the directors?

An insurance group is contemplating a proposal to outsource its customer call centre. The centre is currently managed as an internal function. Before taking a strategic decision, the group directors are assessing not only the long term operating costs but all the transaction costs associated with a change to an external provider.

In the context of this proposal, what are the transaction costs that would need to be considered by the directors? Select ALL that apply.
A . Contract drafting and negotiations
B . Incentive payments for call centre staff
C . Enforcing the terms of the contract
D . Setting and monitoring service standards

View Answer

Answer: A,C,D