Outsourcing

A situation whereby an organization pays an outside party to undertake one or more operating tasks such as recruiting or manufacturing rather than investing in the infrastructure to accomplish the task internally. From making every thing inside the company to buying more goods and services from outside if they are cheaper and better. More companies prefer to own brands rather than physical assets; they are decapitalizing. A few companies are moving towards outsourcing everything, making them virtual companies owning very few assets and therefore, earning extra ordinary rates of return.