Read the given passage and answer the following questions.
Outsourcing or contracting out is giving work to an outside agency to improve efficiency and to reduce costs. When outsourcing involves transferring work to overseas locations, it is described by the term off-shoring, although both off-shoring and outsourcing are used together. Business activities that are outsourced include information technology (IT), human resources, customer support and call centre services and at times also manufacturing and engineering.
Data processing is an IT related service easily be carried out in Asian, East European and African countries. In these countries IT skilled staff with good English language skills are available at lower wages than those in the developed countries. Thus, a company in Hyderabad or Manila does work on a project based on GIS techniques for a country like U.S.A. or Japan. Overhead costs are also much lower making it profitable to get job-work carried out overseas, whether it is in India, China or even a less populous country like Botswana in Africa. Outsourcing has resulted in the opening up of a large number of call centres in India, China, Eastern Europe, Israel, Philippines and Costa Rica. It has created new jobs in these countries. Outsourcing is coming to those countries where cheap and skilled workers are available. These are also out-migrating countries.
Which is NOT a characteristic of a country providing outsourcing services?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Quality services are provided at high cost
The passage states: “In these countries IT skilled staff with good English language skills are available at lower wages than those in the developed countries. … Overhead costs are also much lower making it profitable to get job-work carried out overseas …”
Option (1) Availability of information technology skilled staff — A characteristic of such a country. These countries have staff skilled in IT, who can do work such as data processing.
Option (2) Workers having good English language skills — A characteristic of such a country. The skilled staff in these countries also have good English language skills.
Option (3) Quality services are provided at high cost — Not a characteristic of such a country. Work goes to these countries because it is done there at a low cost: wages are lower and overhead costs are much lower. The aim of outsourcing is to reduce costs, so a high cost would defeat its purpose.
Option (4) Lower wages than developed countries — A characteristic of such a country. Wages here are lower than in the developed countries, which makes the work cheaper.