Which statement about outsourcing is true?

Outsourcing refers to the practice of delegating certain business processes or functions to external companies or service providers. The correct statement is that outsourcing can apply to both services and manufacturing.

This reflects the versatility of outsourcing as a strategic approach, showing that companies can choose to contract out a wide range of activities, from manufacturing goods to providing services like customer support, IT services, or accounting. By being applicable to both sectors, outsourcing allows businesses to focus on their core competencies while leveraging external expertise and resources.

In contrast, the other options limit the scope of outsourcing. The first option incorrectly suggests that outsourcing is exclusive to manufacturing processes, which overlooks the significant role it plays in various service-oriented industries. The statement about reducing the need for skilled labor does not capture the complexity of outsourcing, as some outsourced jobs require high levels of expertise. Finally, claiming that outsourcing is always cheaper than in-house production can be misleading, as the cost-effectiveness of outsourcing can vary based on multiple factors such as the specific functions outsourced and the locations involved.