Question

What is outsourcing and how does it reduce risk? Not how does it work, how does it work to reduce risk?

Answer 1

Outsourcing means that when services are transferred from one business entity to another business entity and they are done by other business entities in exchange of certain fees and commissions and outsourcing is also done by various business entities because it will be helping in lowering of the cost as they will not have to install the overall equipments anf outsource their jobs to other business entities and they will also not have to share their confidential information.

Outsourcing will be reducing the risk because it will leading to transferring of the risk to the other entities and other entities will be doing the job in place of the main entity in exchange of the the commission so all these entities to whom job has been outsourced are liable to finish the work and they will be bearing the risk of Business and it will also mean that the business will not have to share with their intellectual properties and confidential assets so they can transfer the jobs to other entities and get it done in a low cost and low risk.