Final answer:
Outsourcing refers to the practice of contracting with outside vendors to perform certain functions or tasks on a permanent basis, helping companies to streamline operations and reduce costs.
Step-by-step explanation:
The practice of contracting with outside vendors to handle specified functions on a permanent basis is known as outsourcing. This involves a company hiring an outside firm to perform tasks it once performed internally, which can encompass a variety of services such as accounting, human resources, or customer support. Outsourcing can also occur internationally, which is sometimes referred to as offshoring, where a company moves some of its operations to another country.
Historically, the use of outsourcing has increased as companies seek cost-effective measures to handle non-core business functions. Large corporations and even governments have turned to vendors to provide necessary services, which has allowed them to streamline operations and reduce the cost related to maintaining in-house staff for such tasks. Trade agreements and globalization have facilitated this shift, enabling companies to find economic advantages in the global labor market.