Question

What is the business practice called, where companies reduce their permanent workforce and assign work to smaller firms or individual workers at home?

• A. Liberalisation
• B. Outsourcing
• C. Disinvestment
• D. Mechanisation

Hint:

Look for the word that means giving work to outside firms or home workers.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question describes a business practice. A company cuts its permanent staff. It then hands some of its work to smaller firms, or to workers who work from their homes.
We need the term that names this practice.
This topic comes from the chapter on globalisation and the changing world of work in India.

Step 2: Key Idea:
When a company gives a part of its work to an outside firm or person instead of doing it with its own regular staff, the practice is called outsourcing.
It lowers the cost of labour for the company. It also makes jobs less secure for workers, because the work moves to contract and home-based labour.

Step 3: Check Option 1, Liberalisation:
Liberalisation means the government reduces control and restrictions on trade and industry. It is a government policy of opening the economy.
It is not a practice that a single company follows with its workforce. So this option is wrong.

Step 4: Check Option 2, Outsourcing:
Outsourcing matches every part of the description. The firm shrinks its permanent workforce. It passes work to smaller units or to home workers.
This option is correct.

Step 5: Check Option 3, Disinvestment:
Disinvestment means the government sells its share in public sector companies. It has nothing to do with sending work to smaller firms or home workers.
This option is wrong.

Step 6: Check Option 4, Mechanisation:
Mechanisation means using machines in place of human labour. The question speaks about giving work to other firms and people, not about using machines.
This option is wrong.

Final Answer:
Outsourcing is the practice described, so option 2 is correct.
\[ \boxed{\text{Option 2: Outsourcing}} \]