What is a common reason companies engage in outsourcing?

Companies often engage in outsourcing primarily to reduce costs and improve efficiency. Outsourcing allows businesses to delegate certain tasks or functions to external service providers, which can often be done at a lower cost than if the business were to handle those tasks in-house. This is frequently achieved by outsourcing to countries where labor and production costs are significantly lower.

By leveraging specialized expertise from these external providers, companies can also enhance operational efficiency. They can focus more on their core competencies while outsourcing non-core activities, resulting in a streamlined operation and the ability to respond faster to market demands.

The other options do not accurately capture the main rationale behind outsourcing. While increasing domestic employment is generally not a direct outcome of outsourcing, it can sometimes occur as companies grow due to cost savings, but it's not the primary aim. Eliminating competition is more of a strategic maneuver that businesses may consider in other contexts, but it doesn't align with the collaborative nature of outsourcing. As for creating new product designs, that typically requires in-house capabilities and innovation, which outsourcing doesn't inherently provide for, as it focuses more on existing processes rather than product development.