Final answer:
Outsourcing refers to the practice of contracting with third-party companies outside the organization to deliver products or services to customers. It involves hiring labor from sources outside of the company or outside of the nation in which the company is located.
Step-by-step explanation:
Outsourcing refers to the practice of contracting with third-party companies outside the organization to deliver products or services to customers. It is the process of hiring labor from sources outside of the company or outside of the nation in which the company is located. Outsourcing can involve hiring contractors, sometimes abroad, to perform tasks that were once performed internally.
For example, a company may outsource customer service call centers to a third-party company located overseas in order to access cheaper labor markets. By doing so, the company can reduce costs and focus on its core competencies.
Outsourcing can have advantages such as cost savings, access to specialized skills, and increased flexibility, but it can also have drawbacks such as potential loss of control over quality and security risks.