Companies like Nike in contemporary times have outsourced the whole process of production and distribution to third world countries because of the availability of cheap labour. Which idea do such companies practice?

Post-Fordism

The correct answer is Option (2) → Post-Fordism

Post-Fordism is a term used to describe the shift from the rigid, standardized, and mass-production methods of the Fordist era to a more flexible, decentralized, and specialized system of production. Unlike the traditional Fordist model, where a company would own and operate the entire production process in one large factory, Post-Fordism is characterized by:

• Global Supply Chains: Companies focus on core competencies like design, marketing, and branding, while outsourcing manufacturing to a global network of suppliers and subcontractors, often located in countries with lower labor costs.

• Flexible Production: This model allows companies to quickly adapt to changing consumer demands and produce a greater variety of products in smaller, more specialized batches.

• Decentralized Control: The primary company acts as a hub, managing a network of other companies that handle different parts of the production process.

This business model enables companies to reduce costs and increase efficiency by leveraging the specific advantages of different regions, such as cheap labor or specialized resources, which is exactly the practice the passage describes.