What is Outsourcing?

• A. Involves business outsourcing domestically to save money
• B. Involves business moving overseas to save money in labor costs and/or avoid strict regulations
• C. Involves reducing government regulation domestically
• D. Involves increasing production at home

Answer: (B)

Outsourcing is when a company contracts out a task, production, or service to another firm instead of doing it in-house. This is often done to save money, access specialized skills, or free up resources to focus on core activities. The chosen description fits best because it highlights moving work overseas to cut labor costs and sometimes benefit from a different regulatory environment—both common reasons for outsourcing, especially offshoring. Outsourcing can also happen domestically, but the overseas approach is a classic and widely used form. The other statements describe things that aren’t outsourcing (changing domestic regulations or increasing production at home).