If a company is considering switching production to a country where wage costs are lower, to what other factors will it need to take into account before doing so?

1.- If a company is selecting switching exertion to a responsibility where wage costs be urinate, to what other factors will it want to take into account before doing so?Research has shown that the overall number one reason and motive for switching work to other countries is to reduce costs. In markets with limits in product musical note price competition is more definitive, as well as being able to offer almost identical products at lower price. This has typically been the case with consumer products. A number of studies get down also identified quality and availability as vituperative aspects (Cho & Kang, 2000)Switching toil to a lower wage rural appears to be a good strategy for firms seeking to extradite got its costs. An establishment would need to comp argon the labour cost per social unit produced compared to the exist mess, also it is important to see if the workers are creative at the new location. Firms would face problems such(prenominal)(prenominal) as raising costs, dispersal costs and even more taxes. in that location are both positive and negative aspects included in Global sourcing. It underside lead to improved competitive usefulness through lower costs and better geographical availability. The risks exist that firms could get into problems with transportations, technology, orphic information leaking out, and that the cost reductions may not be as great as expected (Worthington and Britton, 2006). Further, firms whitethorn meet problems as transportation problems, technological and capacity weaknesses in production, and lack of watchfulness systems. Additionally, features such as languages barriers, customs and dole out politys are close to of the factors that a firm would need to consider before abject its production to another country. The transportation and logistics networks are perhaps not as reliable as in the home country, which may cause unexpected delays (Cho & Kang, 2000; Smith, 1999). For firms movi ng their production to another country, it i! s important to be aware of how their business relationships and networks could be affected too. There might be ethical problems, such as the room the workers are treated, in some countries workers are exploited and not paid well. 2. - Will change magnitude environmental standards imposed by government on businesses inevitably upshot in high business costs?For some businesses, increased environmental standards reckon to be an opportunity instead of a threat, as doorman argues that the government creates barriers, because it restricts competition through the granting of monopolies and standards. Industries such as utilities are considered natural monopolies because it has been more efficient to have one voltaic company provide power to a locality than to allow for many electronic companies to compete in a local market. Additionally, firms that face high environmental complaisance costs may lose market share to those check in slight regulated jurisdictions. New opportuni ties arise for firms to design their pollution by using less-regulated suppliers (Barton et al. 2007).

In other words, those split of the commodity ambit that generate most pollution brook be located in developing countries where environmental regulation is less stringent. all the hypotheses referred to so far are essentially pessimistic in that they assume that there is a contest between stricter environmental regulation and competitiveness. The Porter hypothesis claims that, on the contrary, environmental regulation can, and often does, lead to economic benefits and and so to increased competitiveness. If t hat were broadly the case, then the concerns raised ! above would be quite crazy (Barton et al. 2007). References:Cho, J. & Kang, J. (2000). Benefits and challenges of Global sourcing: perceptions of U.Sapparel retail firms. International selling Review, Vol. 18, No. 5, pp. 542-561. Smith, J. M. (1999). distributor point selection for global purchasing. European Journal of Purchasing& publish Management, 5. pp. 117-127Worthington, I and Britton, C (2006), The blood Environment fifth discrepancy PearsonEducation Limited, Essex. Porter, Michael E. Competitive Strategy: Techniques for analysing industries and competitorsJonathan Barton, Rhys Jenkins, Anthony Bartzokas, Jan Hesselberg, and Hege Knutsen(2007) ?environmental enactment and industrial scrap in Pollution-intensive Industries? in Industrial Innovation and Environmental Regulation Edited by Saeed Parto and brent Herbert-Copley If you want to get a full essay, order it on our website: Order CustomPaper.com

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