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Outsourcing is the transfer of responsibility for the execution of any of a company's recurring internal activities or processes to another company. The outsourcing of component production has been historically well established in manufacturing industries such as automobiles and airplanes (Sako, 2003). Outsourcing became popular in the services sector in the late 1980s when firms began relying on specialist companies for ongoing IT support rather than hire employees with IT skills. In essence, the vendor rents its skills, knowledge, technology, and manpower for an agreed-upon price and period to perform functions that the client no longer wants to perform (Adler, 2003). [ABSTRACT FROM AUTHOR]

A merger refers to the amalgamation of two independent corporate entities into a single one (eg. Daimler/Chrysler), whereas an acquisition refers to the absorption of one corporate entity into another (eg. Cisco/Stratacom). Mergers and acquisitions (M&A) are among the most dramatic and visible manifestations of corporate strategy. With a single deal, the strategic course of the organizations involved can be altered permanently. Capital market reactions may create enormous changes in shareholder value and the careers of individual managers at all levels may be profoundly affected. [ABSTRACT FROM AUTHOR]