Question

Which of the following defines outsourcing?

• A. It means capturing a new market where companies can sell their products to make more profit.
• B. It refers to the process of investing in skill development programs for the employees of the companies.
• C. It refers to the practice of reducing costs by transferring portions of work to outside suppliers rather than completing it internally.
• D. It means hiring people in foreign countries and shifting them to the company headquarters after training.

Answer 1

The correct option is C It refers to the practice of reducing costs by transferring portions of work to outside suppliers rather than completing it internally.

Outsourcing is a business strategy adopted by MNCs. It refers to the process of supplying raw materials, services, or semi-finished products for the production of the final product or service from outside the company. The primary motive of outsourcing is to reduce the production cost and maximise the profit.