What is outsourcing? Illustrate with suitable examples.
Solution:
Outsourcing is the process of contracting a business function or any specific business activity to specialized agencies mostly the non-core areas such as sanitation, security, household pantry, etc. are outsourced by the company. The company makes a formal agreement with the agency.
Company benefits in two ways.
1. It reduces its own cost
2. It uses the expertise of the firm which specializes in a particular kind of service.
Examples of outsourcing:
The establishments such as shops, malls, housing societies, offices, etc. outsource facilities like canteen, sanitation, security, etc. In the same way arrangements for the wedding, anniversary, birthday celebration can also be outsourced.
