General contractor: is a group or individual that contracts with another organisation or individual (the owner) for the construction, renovation or demolition of a building, road or other structure.
One more example of a service organisation can be given. XYZ is one IT company doing good work. It may be engaged in outsourcing. The company may have more than 1,000 qualified employees. However, this manpower is inadequate due to increase in the volume of work. Here, the IT company may select some less important, simple and repetitive work and decide to get it done from other IT service providers. Regular contract will be made for providing the required services and the contractor will start supplying the services accordingly. In this case also sub- contracting is possible.
It may be noted that the concept of contracting, sub-contracting’ and outsourcing are rather identical. Human resource outsourcing (HRO) is gaining ground among Indian Corporates who are looking at expanding the scope of their service. HR is getting outsourced to third party providers who can offer the benefit of their special skills.
Contracting/sub-contracting offers benefits to both the parties. As a result, this practice is followed extensively in the business world including the construction activities of varied type.
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