Study the flow chart and identify the labels (1) and (2).
| A bank in the USA earlier answered its customers’ telephone calls through its own department. | → | (1) The bank now hires this regular service from a company in India. | → | (2) The Indian company receives and makes calls on behalf of the bank through telecom and Internet links. |
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (1) Outsourcing, (2) Business process outsourcing (call centre)
Label (1) is outsourcing. The bank now hires a regular service from an external source in another country, in place of its own department.
Label (2) is business process outsourcing, a call centre. The Indian company receives and makes calls on behalf of the foreign bank.
Foreign direct investment means a foreign firm investing in buildings, equipment and organisations in India. Foreign institutional investment comes as stocks, bonds or other financial assets. Neither is a service hired from abroad.
NCERT (2026-27): “Outsourcing: This is one of the important outcomes of the globalisation process. In outsourcing, a company hires regular service from external sources, mostly from other countries, which was previously provided internally or from within the country (like legal advice, computer service, advertisement, security — each provided by respective departments of the company). As a form of economic activity, outsourcing has intensified, in recent times, because of the growth of fast modes of communication, particularly the growth of Information Technology (IT). Many of the services such as voice-based business processes (popularly known as BPO or call centres), record keeping, accountancy, banking services, music recording, film editing, book transcription, clinical advice or even teaching are being outsourced by companies in developed countries to India. …” Glossary: “Business Process Outsourcing (BPO) – Outsourcing of business processes (activities constituting a service) by companies to other companies. This term is frequently associated with outsourcing of such activities (e.g. receiving and making calls on behalf of other companies popularly known as call centres), by foreign companies to Indian companies in the field of IT-enabled services.” |