What is meant by outsourcing in a business context?

Outsourcing, in a business context, refers to the practice of subcontracting work or services to external firms or individuals rather than handling them in-house. This approach allows companies to leverage external expertise, reduce costs, or focus on core business activities by outsourcing non-core functions. For example, a business might outsource its customer service operations to a specialized firm that can provide that service more efficiently or at a lower cost than the company could achieve on its own.

The other options do not accurately capture the essence of outsourcing. Hiring additional employees would imply expanding internal resources rather than relying on external partners. Eliminating departments is more about downsizing and cutting costs than engaging with outside firms. Investing in new technologies implies a focus on internal improvements, rather than outsourcing tasks to external organizations. Thus, the correct choice highlights the strategic move businesses make to utilize external resources for operational efficiency and cost-effectiveness.