Final answer:
Management should outsource activities where the firm is relatively weak to focus on core competencies and improve efficiency and competitiveness.
Step-by-step explanation:
To maximize returns, management should outsource those activities in which it is relatively weak. Outsourcing allows a company to focus on its core competencies, the areas where it has the greatest knowledge, expertise, and ability to create competitive advantages.
By outsourcing non-core activities, firms can often cut costs and improve efficiency.
This strategy has been adopted across various sectors including manufacturing, customer service, and even white-collar jobs like technical support and clerical work.
Although outsourcing has led to the decline of certain types of jobs, particularly in developed countries, it continues to be a strategic tool for optimizing business performance.
The choice to outsource is often driven by the desire to streamline operations and focus on the avenues that significantly contribute to a firm's success.
It is advisable for businesses to outsource tasks that are outside their primary area of expertise to enhance overall productivity and ensure that critical success factors receive the necessary attention and resources.