Corporations have increasingly turned to "externalization" of functions to lower costs and improve profits. What is this?

Question

Quizplus · Accepted Answer

Externalization refers to corporations hiring specialized outside firms or engaging in strategic alliances to perform certain functions that were previously done internally. This is done in order to lower costs and improve profits by taking advantage of the expertise and economies of scale offered by these external firms. Moving operations abroad (option C) is a form of offshoring, which is different from externalization. Sending experts to other places (option A) may be part of a corporation's strategy, but it is not the sole definition of externalization. Closing in-house offices and hiring other firms to replace them (option B) is a form of outsourcing, which is related to externalization but not exactly the same thing.

Corporations Have Increasingly Turned to "Externalization" of Functions to Lower