Final answer:
Contracting out organizational tasks to outside agencies commonly known as outsourcing, involves hiring external contractors to perform tasks that a company's own employees used to handle, often resulting in reduced costs and changes in the job market.
Step-by-step explanation:
Contracting out organizational tasks to outside agencies to reduce costs is referred to as outsourcing. This practice involves hiring external contractors to perform tasks that were previously handled internally by the company's own employees. Outsourcing can often involve contracting with companies in other countries, a strategy that can further reduce costs due to differences in wages and operating expenses.
The term offshoring refers to the process of moving some of a company's operations to other countries to take advantage of cheaper labor markets. While outsourcing and offshoring can lead to cost savings for companies, they have also caused significant shifts in the job market, contributing to structural unemployment and the polarization of job opportunities.
Outsourcing has expanded beyond manufacturing to include services such as customer support and technical services, illustrating the globalized nature of modern business operations.