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Globalization and its impact
Globalization and its impact
Effects of outsourcing in america
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With globalization moving labor to developing countries became usual practice for big corporations in the 20th century. They use it to cut on the cost of production and workers in the developing country are happy to be able to work and provide for their families. The companies are often vilified for exploiting the workers and providing poor working conditions. In the article “The Noble Feat of Nike,” Johan Norberg shares her research on factory workers in Vietnam and offers their point of view on outsourcing. A young Nike worker, Norberg interviews, explains that the conditions in the factories are far better than in the sunny humid fields. She is satisfied with the wages, and is grateful for the lifestyle she can now afford. Her new income allowed her to buy a car and fix her house, and her son doesn’t have to work instead of going to school, like every middle class family in America.
American prosperity was built on the backs of middle class families with one or both parents working in the manufacturing and living their American dream. When companies moved big portion of their manufacturing to China these workers had to be displaced to different jobs that were created as a result of the higher profits companies earned and invested back in the economy. The new jobs often needed training, but were better paid, and at the same time consumers enjoyed the price cuts in the products they were buying. Economists call it win-win situation where more jobs are created in the U.S., the economy benefits from the companies’ higher profits and people from developing countries have a chance for better life. However the lives of the families of the workers that lost their jobs to offshoring have changed irreversibly. U.S. companies more than d...
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...New York: AMACOM, 2005. Kindle file.
MacDonald, Liz. “Companies Stashing Profits Overseas.” Fox Business. Fox News Network, LLC. 11 Mar. 2013. Web. 23 Apr. 2014.
Norberg, Johan. “The Noble Feat of Nike.” The New World Reader: Thinking and Writing about the Global Community. Ed. Gilbert H. Muller. 4th ed. Boston: Wadsworth, 2014. Print.
“Offshoring.” Encyclopedia Britannica. 2014. Encyclopedia Britannica Online. Web. 14 Mar. 2014.
“Offshoring. No Big Deal?” Industrial engineer: IE 44.6 (2012): 16. EBSCOhost. Web. 22 Apr.
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Schafer, Lee. “Solution to skill gap is investment in training.” Star Tribune 18 Sep. 2013: D.1. ProQuest. 23 Apr. 2014.
Taylor, Timothy. “In Defense of Outsourcing.” CATO Journal. Vol. 25.2. (Spring 2005): 367-377. EBSCOhost. Web. 14 Mar. 2014.
“Worker Displacement: 2007-2009.” Targeted News Service. 26 Aug 2010. ProQuest. Web. 20 Mar. 2014.
In today’s world, increasing big companies open factories in developing countries but many people said it is unethical and the factories are sweatshops. Most of the sweatshops were opened in east Asia and third-world countries and regions. The companies open the sweatshops in order to get more benefits is a kind of very irresponsible behavior. For example, Apple's factories in China are not good and unethical. Audit finds
Since 1990 after Vietnamese government removal of control over the economy, it has doubled and it has cut poverty in half and helped make Vietnam into a more modernized and progressive country. He also looks into why Nike Company works better overseas, and that is due to worker satisfaction. He comes to a conclusion that the effect of globalization is not necessary a bad thing it helps third country’s quite a lot in the development process in trying to modernize and later maybe possible to compete with the first world country’s for later generations in my thought. As the author puts in “The Noble Feat of Nike” the job comes with a regular wage, which is three times the minimum wage for a state owned enterprise that also comes with free or subsidized meals, free medical services and training and education. Now in 2003 ...
Corporations in the United States have proved time and time again that they are all about profit and not about what is good for America. One example of this is the fact that many corporations have factories in other countries, or buy from other corporations that do. Nike (an athletic shoe and clothing company) produces most of their shoes and apparel in factories in other countries, including Japan, South Korea, Indonesia, China, Vietnam and Malaysia. According to Nike’s factory disclosure list released May 2011, only 49 of it’s over 700 factories are located in the U.S. (Nike, Inc.) This means that thousands of jobs that could be filled by needy Americans are instead being filled by workers in other countries. This reason that Nike and other corporations outsource is very simple, it is very cheap to do so. In an excerpt from Jeffrey St. Clair's book “Born Under a Bad Sky” the author describes the vast differences between Nike’s production costs and retail prices. “In Vietnam, it costs Nike only $1.50 to manufactu...
Timmerman suggests that “We share little with the people who make our clothes nowadays. We’re divided by oceans, politics, language, culture, and a complex web of economic relationships. It doesn’t affect our daily lives if they are overworked and underpaid as it did during the turn of the twentieth century,” thus demonstrating the inadequacy of outsourcing and the relationships between the corporation, factory workers, and the consumer (180). The dynamic between the corporations, factory workers, factory owners, and middle-men is complicated and tense due to the interactions, communication, and duties differentiating between each group. For the factory workers, they suffer working in hard conditions, though the workers are happy to have a job, they would rather endure the harsh stipulations for the means of production to make money to send to their families than to protest against their factory owners (Timmerman 7).
Large corporations such as Nike, Gap, and Reebok and many others from the United States have moved their factories to undeveloped nations; barely pay their employees enough to live on. Countries such as China, Indonesia, and Haiti have readily abundant cheap labor. There should be labor laws or an obligation of respecting workers to provide decent working conditions, fair wages, and safety standards.
"Nike." Columbia Electronic Encyclopedia, 6th Edition 1. Academic Search Premier, EBSCOhost (accessed November 6, 2009).
Linda Lim, a professor at the University of Michigan Business School, visited Vietnam and Indonesia in the summer of 2000 to obtain first-hand research on the impact of foreign-owned export factories (sweatshops) on the local economies. Lim found that in general, sweatshops pay above-average wages and conditions are no worse than the general alternatives: subsistence farming, domestic services, casual manual labor, prostitution, or unemployment. In the case of Vietnam in 1999, the minimum annual salary was 134 U.S. dollars while Nike workers in that country earned 670 U.S. dollars, the case is also the similar in Indonesia. Many times people in these countries are very surprised when they hear that American's boycott buying clothes that they make in the sweatshops. The simplest way to help many of these poor people that have to work in the sweatshops to support themselves and their families, would be to buy more products produced in the very sweatshops they detest.
In the U.S., critics of off-shoring argue, it eliminates jobs and exploits poor conditions in low wage countries. Others contend this practice has drained public tax coffers; eroding cash strapped Social Security, Medicare, workers compensation and other payroll-deduction funds (Konrad, 2004). Proponents of off-shoring believe it improves employment opportunities and overall domestic wealth. Their rationale, allowing other countries to produce and export complementary/intermediate products into the U.S., allows the U.S. to focus resources and capital on “higher” value added steps within the overall value chain. Higher value added steps, create jobs that pay more and make better use of resources. Greater, more effective utilization of resources enhances the nation’s overall w...
In recessions of the past the American worker was laid off with the impression they would be rehired as soon as demand for goods and services were presented again. Now people in jobs from computer programmers to telephone operators are losing their jobs and never returning to the same field again. The big issue here is that if we continue outsourcing specific jobs overseas we could erase a whole industry of job opportunity from the American people. Economists say the framework of the U.S. labor force has been changed due to past outsourcing of jobs by this country. The more outsourcing that continues the more our job force’s structure will change. As a result, the American worker can no longer wait to be rehired into the same job or profession. Using their time while unemployed, Americans are retraining themselves and attempt to step into an entirely different career.
Nike has been under a great deal of pressure to correct the misdoings that have been done regarding production facilities in the East. As Nike is responsible for these plants, their reputation has been tainted with increasing public debate about ethical matters. While Nike still promotes itself as one of the industry leaders in corporate social responsibility, workers in Asia are still forced to work excessively long hours in substandard environments and are not paid enough to meet the basic needs for themselves or their families. They are faced to a life of poverty and are unfortunate subjects to harassment and violent threats if they make any attempt to form unions or tell journalists about labour abuses in their factories. Phil Knight’s speech regarding Nike’s steps to improving human rights in Asian countries was a step in the right direction for Nike, but it would have been much more effective had Nike fully followed through with these initiatives.
Many global companies like Nike, Inc. are seen as role models both in the market place as well as in society in large. That is why they are expected to act responsibly in their dealings with humanity and the natural world. Nike benefits from the global sourcing opportunities, therefore areas such as production and logistics have been outsourced to partner companies in low-wage countries like China, Vietnam, Indonesia and Thailand. As a result the company is limited nowadays to its core competencies of Design and Marketing.
Phil Knight started his shoe company by selling shoes from the back of his car. As he became more successful in 1972 he branded the name Nike. In the 1980’s Nike Corporation quickly grew and established itself as a world leader in manufacturing and distributing athletic footwear and sports' attire. The Nike manufacturing model has followed is to outsource its manufacturing to developing nations in the Asia Pacific, Africa, South and Latin Americas; where labor is inexpensive. It quickly became known for its iconic “swoosh” and “Just do it” advertisements and products. Its highly successful advertising campaigns and brand developed its strong market share and consumer base. But, the road has not always been easy for Nike; in the late 1990’s they went through some challenging times when their brand become synonymous with slave wages and child labor abuses. During this period, Nike learned that it paramount that the company understands its stakeholders’ opinions and ensures their values are congruent with their stakeholders. Nike learned that their stakeholders were concerned with more than buying low cost products; their customers were also concerned with ethical and fair treatment of their workers. Because Nike was unwilling to face the ethical treatment of its employees, the company lost its loyal customers and damaged its reputation. Nike has bounced back since the late 1990’s and revived its reputation by focusing on its internal shortfalls and attacking its issues head on. Nike nearly collapsed from its missteps in the late 1990’s. They have learned from their mistakes and taken steps to quickly identify ethical issues before they become a crisis through ethics audits. This paper is based on the case study of Nike: From Sweatsh...
With the increasing awareness and publicity of poor working conditions in subcontracted factories in East Asia, Nike has stimulated an uprising of activist and watchdog groups working toward seeing these conditions changed. With Nike in the negative spotlight, various organizations have revolved around generating a negative outlook on Nike’s practices of social irresponsibility. Certain campaigns such as the “National Days of Consciousness” and “International Day of Protest” were organized to educate people on the deplorable working conditions in Nike’s Asian manufacturing plants, and were designed to get more people involved in global employment issues.
Nike has plenty of critics, but some believe the company has done nothing wrong with the treatment of their workers. William Stepp, from Libertarian Mises Institute, believes that the benefits the workers are given at the factories improve their lives (Nike sweatshops, 2017). William backs his opinion by the fact the workers agreed to the wage and work hours before deciding to take the job (Nike sweatshops, 2017). The workers are supplied with benefits like free physicals, clinic and health services, uniforms, food, transportation, and entertainment; if the other part of the factory work is not as glamorous, the workers still receive better treatment from the factories than other jobs (Nike sweatshops, 2017). In addition, studies were conducted by the Global Alliance for Workers and Communities, and they discovered that 70% of Nike workers in Thailand would rate their supervisors as good, and that 72% thought they were paid fair wages (Nike sweatshops, 2017). If the workers believe they are being treated fairly, and that the factory job is more stable than farm work, is there really a problem. Many factory workers will migrate towards factories because the work is steady than farmland, and they can send money back to their families. The factories supply jobs to people who normally would not be able to find jobs that pay a decent and consistent wage (Nike sweatshops,
McCray, S. (2008, April 1). The Top 10 Problems With Outsourcing Implementations. TPI. Retrieved July 12, 2014, from http://www.tpi.net/pdf/papers/Top_10_Problems-with_Outsourcing.pdf