Two major forms of Organizational restructuring

Question 1

Outsourcing

Answer 1

Outsourcing is a common practice that relies on paying a third-party business to perform a specific function that does not align with the main company’s ideals. This is used to take advantage of lower labor rates overseas, allowing companies to save money on labor-intensive work like customer service, technical support, and computer programming.

For example, a manufacturer might outsource security, food service, or payroll processing. They might do this to get better quality, lower costs, and freedom from having to manage something that is not its primary business.

Question 2

Offshoring

Answer 2

Offshoring is where a company establishes a foreign subsidiary and transitions from higher-paid American employees to lower-paid foreign employees. This practice is hotly debated among policymakers, economists, business people, and the general public.