Which of the following is NOT an outsourcing business structure?

• A. Network orgs
• B. Virtual org
• C. Market mechanism
• D. Franchising

Answer: (D)

Outsourcing involves a firm handing over activities to external providers rather than doing them in-house, often to access specialized skills, reduce costs, or improve focus on core activities. Network organizations form a web of external partners and suppliers that work together through contracts to deliver the final product or service. Virtual organizations rely on information technology to coordinate dispersed experts and external suppliers. Market mechanisms source goods and services through competitive external markets, with decisions driven by price signals.

Franchising, by contrast, is a licensing arrangement that lets another party operate a business using the franchisor’s brand, systems, and support. The franchisee runs an independent business, following the established model, rather than outsourcing internal activities to external providers. So franchising isn’t an outsourcing structure.