Question

Why do organizations outsource?

1) To reduce costs
2) To focus on core competencies
3) To access specialized skills and expertise
4) All of the above

Answer 1

Organizations outsource to reduce costs, focus on core competencies, and access specialized skills and expertise, often facilitated by globalization and trade agreements such as NAFTA which make it easier and more cost-effective. Option 4

Step-by-step explanation:

Organizations choose to outsource for several key reasons. Firstly, to reduce costs, as outsourcing can lead to significant savings, particularly when operations are moved to regions with a lower cost of living and labor.

Secondly, outsourcing allows organizations to focus on core competencies, honing in on their primary business functions and improving efficiency. Lastly, it provides access to specialized skills and expertise that may not be available internally; by outsourcing, companies can leverage knowledge and technology from around the globe.

As globalization advanced in the 1990s, with trade agreements such as NAFTA facilitating cross-border business, outsourcing and offshoring have become prevalent strategies for multinational corporations seeking to stay competitive in a global market. Option 4