Question

The process of contracting a business function to someone else is called as ______.

Options

• e-business

• outsourcing

• trading

Answer 1

The process of contracting a business function to someone else is called as outsourcing.

Explanation:

Outsourcing is the process of contracting out less important (i.e., non-core) business activities to external agencies. These external agencies are highly specialised and enjoy expertise in specific business activities, such as advertisement and promotion of products and post-sale services. By outsourcing less important business activities, firms can focus on important (i.e., core) activities.