Which term means transferring certain business functions outside of the organization so that the company can focus on core activities?

Which term means transferring certain business functions outside of the organization so that the company can focus on core activities?

• A. Overseas premium
• B. Overhead
• C. Ownership interest
• D. Outsourcing

Answer: (D)

Outsourcing is the practice of having external vendors handle business functions that aren’t part of the organization’s main offerings. By transferring these tasks outside the company, leadership can concentrate internal resources on what the business does best—its core activities—while the outsourcing partner supplies the required skills and capacity. This approach often yields cost savings, access to specialized expertise, and greater flexibility to scale operations up or down. The other terms don’t fit the concept: overseas premium isn’t a standard HR term for relocating work; overhead refers to ongoing internal costs of running the business; ownership interest is about equity in another entity.

Outsourcing is the practice of having external vendors handle business functions that aren’t part of the organization’s main offerings. By transferring these tasks outside the company, leadership can concentrate internal resources on what the business does best—its core activities—while the outsourcing partner supplies the required skills and capacity. This approach often yields cost savings, access to specialized expertise, and greater flexibility to scale operations up or down. The other terms don’t fit the concept: overseas premium isn’t a standard HR term for relocating work; overhead refers to ongoing internal costs of running the business; ownership interest is about equity in another entity.