Outsourcing

Definition

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees and staff. It is often pursued to reduce costs, access specialized expertise, or free internal resources for other purposes.

Related terms

Globalization:

The process by which businesses or other organizations develop international influence or start operating on an international scale, often leading to more opportunities for outsourcing.

Comparative Advantage:

An economic principle that states countries should produce and export goods and services they can produce most efficiently and import goods they cannot produce as efficiently.

Supply Chain Management:

The management of the flow of goods and services, involving the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption