What does "outsourcing" mean in an international business context?

In the context of international business, outsourcing specifically refers to the practice of hiring external firms to handle specific business processes, such as manufacturing, customer service, or IT services. This strategy allows companies to focus on their core competencies while leveraging the expertise and efficiency of specialized firms.

Outsourcing can also provide cost advantages, access to skilled labor, and flexibility in operations, making it a prevalent strategy among businesses looking to improve efficiency and reduce costs. This approach is increasingly common in a globalized economy, where companies can tap into resources from around the world.

The other options touch on related concepts but do not accurately define outsourcing. For example, acquiring foreign companies and relocating factories refers more to foreign direct investment and offshoring, respectively. Partnering with other firms for market expansion tends to focus on strategic alliances rather than the specific act of outsourcing. Thus, the correct definition centers on the external engagement of firms for particular tasks, aligning closely with the nature of outsourcing itself.