Cultural and Ethical Issue of Globalization
Cross-Cultural Perspective: The Cultural and Ethical Issue of Globalization
Many American companies that are outsourcing jobs to other countries create a problem in the economy of the Unites States and also creates a cultural effect in a global scale. To this day, The United States had lost millions of manufacturing jobs compared to two decades ago (Heffner, 2012). Americans can no longer compete to international manufacturers, which put the United States economy in doom. There are many factors involved as to why American companies’ decides to do its manufacturing business outside of the United States. The most obvious reason is the cost of labor. International wages from third world countries cost way less than wages in the United States. For example, manufacturers in China get paid 33 cents an hour (Heffner, 2012). As a company, the cost of doing business outside of the Unites States is way cheaper than hiring workers in the United States, which would cost more than 20 folds. In addition to wages, outsourcing jobs outside of the United States would also save companies cost for payroll taxes, benefits, and dealing with unions that are common in The United States. Moreover, doing business outside the United States increases a company’s capital because the cost of labor wages and manufacturing are less, yet the sales remain the same. The cost of real estate and plant cost is less than in the United States. Companies don’t have to worry about maintenance, property taxes, insurance, and cost for operations (Samuels, 2013).
Although there are standards created by the International Labor Organizations when it comes to doing business in other countries, there are still fewer regulations set forth in other countries compared to regulations that are mandatory in doing business in the United States (Samuels, 2013). Companies will need to follow set rules and regulations in the United States, which means more paperwork, more taxes, worrying about workers rights,
Many American companies that are outsourcing jobs to other countries create a problem in the economy of the Unites States and also creates a cultural effect in a global scale. To this day, The United States had lost millions of manufacturing jobs compared to two decades ago (Heffner, 2012). Americans can no longer compete to international manufacturers, which put the United States economy in doom. There are many factors involved as to why American companies’ decides to do its manufacturing business outside of the United States. The most obvious reason is the cost of labor. International wages from third world countries cost way less than wages in the United States. For example, manufacturers in China get paid 33 cents an hour (Heffner, 2012). As a company, the cost of doing business outside of the Unites States is way cheaper than hiring workers in the United States, which would cost more than 20 folds. In addition to wages, outsourcing jobs outside of the United States would also save companies cost for payroll taxes, benefits, and dealing with unions that are common in The United States. Moreover, doing business outside the United States increases a company’s capital because the cost of labor wages and manufacturing are less, yet the sales remain the same. The cost of real estate and plant cost is less than in the United States. Companies don’t have to worry about maintenance, property taxes, insurance, and cost for operations (Samuels, 2013).
Although there are standards created by the International Labor Organizations when it comes to doing business in other countries, there are still fewer regulations set forth in other countries compared to regulations that are mandatory in doing business in the United States (Samuels, 2013). Companies will need to follow set rules and regulations in the United States, which means more paperwork, more taxes, worrying about workers rights,
References: Azam, F. (1999, June). NIKE: Nike Shoes and Child Labor in Pakistan. Retrieved from http://www1.american.edu/ted/nike.htm Boggan, S. (2001, October 20). 'We Blew It ' Nike Admits to Mistakes Over Child Labor. Retrieved from http://www.commondreams.org/headlines01/1020-01.htm Cushman, J. (1998, May 13). INTERNATIONAL BUSINESS; Nike Pledges to End Child Labor And Apply U.S. Rules Abroad. Retrieved from http://www.nytimes.com/1998/05/13/business/international-business-nike-pledges-to-end-child-labor-and-apply-us-rules-abroad.html Heffner, T. (2012, May 15). American Manufacturing Can No Longer Compete. Retrieved from httphttp://economyincrisis.org/content/american-manufacturing-can-no-longer-compete Samuels, D. (2013). Pros & Cons of Outsourcing Manufacturing Jobs. Retrieved from http://smallbusiness.chron.com/pros-amp-cons-outsourcing-manufacturing-jobs-40320.html The Poorest Countries in the World. (2013). Retrieved from http://www.gfmag.com/tools/global-database/economic-data/12147-the-poorest-countries-in-the-world.html#axzz2O7xjxV00