Final answer:
Having one or more of a firm's activities performed by another firm or individual is referred to as outsourcing. Outsourcing involves contracting work out to external parties, potentially in other countries, to reduce costs. Offshoring is when a firm moves its operations to a foreign country for cheaper labor, not to be confused with outsourcing.
Step-by-step explanation:
Having one or more of a firm's activities performed by another firm or individual is referred to as outsourcing. Outsourcing is the process where jobs are contracted to an outside source, which could be in another country. It enables companies to reduce costs by hiring outside contractors to perform tasks that were previously conducted internally. Examples of services that are commonly outsourced include customer service, accounting, payroll, human resources, and data processing services.
On the other hand, offshoring refers to a company moving its own operations overseas to take advantage of cheaper labor markets, rather than contracting them out. Both practices have been influenced by globalization and trade agreements such as NAFTA, allowing goods to be produced in places like Mexico or Asia and then sold in the U.S. market. An example of offshoring is clothing corporations shutting down their U.S. factories and relocating them to China.