Question : Outsourcing refers to the practice of:
Option 1: Contracting work to external organizations or individuals
Option 2: Nationalizing industries and services
Option 3: Restricting trade and investments
Option 4: Regulating the labor market
Correct Answer: Contracting work to external organizations or individuals
Solution : The correct answer is (a) Contracting work to external organizations or individuals
Outsourcing refers to the practice of contracting work to external organizations or individuals, often in different locations or countries. It involves delegating certain tasks, processes, or functions to third-party entities that specialize in those areas.
Companies may choose to outsource certain aspects of their operations for various reasons, including cost savings, access to specialized skills, increased efficiency, and flexibility. By outsourcing non-core activities or tasks to external parties, organizations can focus on their core competencies and allocate resources more effectively.
Outsourcing can involve a range of activities, such as IT services, customer support, manufacturing, back-office operations, and administrative tasks. It allows companies to leverage the expertise and cost advantages offered by external providers, which may be located in countries with lower labor costs or specific skills.
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