With the constant quest for greater profitability, American companies are reaching further and further around the globe for opportunity. Factories are being built in third world countries, and sales efforts continue to increase in the world’s fastest growing economies like China and Brazil. Consumer products corporations, especially, are seeking out the cheapest and most efficient method of production, and many are beginning to look to Indonesia for answers. According to the Indonesian Footwear Association, “sports footwear produced in Indonesia is expected to soar roughly 25 percent to $1.6 billion since 2007,” (Abelson 1). One of the American companies leading the global initiative, New Balance Athletic Shoe Inc., alone expects to increase its number of shoes manufactured in Indonesia to almost 6 million pairs over the next couple years (Abelson 1). This vast migration of manufacturing facilities is lead not only by the hunger for corporate profits, but also by the new international system of globalization. This system destroys international barriers and allows for enhanced communication, efficiency and cultural understanding. When developing production operations in Indonesia, New Balance must be aware of both the cultural and geographical differences of the country, as explained by authors Thomas Friedman and David Landes, as well as the potential benefits and costs of globalization, explained by authors Amartya Sen and Paul Collier.
Prior to building its new factory in Tangerang, New Balance Athletic Shoe Inc. must be aware of all developmental barriers, including the cultural differences in religion and view of authority, and the geographical differences that influence employee pace of work and cause threat of potent...
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...rld, they often lose those ancient traditions passed down from generation to generation and we begin to experience Americanization through “western dominance and imperialism,” (Sen A2). In addition, Collier explains that “countries at the bottom coexist with the twenty-first century, but their reality is the fourteenth century,” (Coullier 3). As New Balance begins to build its new plant and hire the factory workforce, they must keep in mind that Indonesia is not as advanced as the US. Therefore, certain technologies and ideas be culture shock to the people.
Even though globalization has both benefits and costs, if New Balance can overcome the cultural and geographical differences and help preserve their employees’ culture and traditions, both the Indonesian people and the company will benefit.
Works Cited
Landes, David "The Wealth and Poverty of Nations"
When you go to the mall to pick up a pair of jeans or a shirt, do you think about where they came from? How they were made? Who made them? Most consumers are unaware of where their clothes are coming from. All the consumer is responsible for is buying the clothing from the store and most likely have little to no knowledge about how it was manufactured, transported, or even who made the clothing item and the amount of intensive labor that went into producing it (Timmerman, 3). In my paper, I will utilize the book Where Am I Wearing? by Kelsey Timmerman and the textbook Cultural Anthropology: A Toolkit for a Global Age by Kenneth J. Guest to examine globalization in the context of the clothing industry.
In China, Kelsey Timmerman spent time with a couple who worked at the Teva factory, traveled to the countryside to meet the couple’s son, insert name, who hasn’t seen his parents in three years due to his parents working long hours and it being expensive to take a train ride. In the US, the author visited one of a few clothing factories in the US to talk to the workers about his shorts, and the decrease of American garment factories. Timmerman wants the consumer to be more engaged and more thoughtful when mindlessly buying clothes. By researching how well the brands you want to buy from monitor their factories and what their code of ethics details, you can make a sound decision on if this is where you would want to buy your clothes. The author writes about brands that improve employers lives like SoleRebels, a shoe company who employs workers and gives them health insurance, school funds for their children, and six months of maternity leave. Brands like soleRebels that give workers benefits most factory workers have never even heard of help improve the lives of garment workers and future generations. From reading this book, Timmerman wants us to be more educated about the lives of garment workers, bridge the gap between consumers and manufacturers, and be a more engaged and mindful consumer when purchasing our
Each country has its own culture, with subcultures inside the dominant culture (Schaefer, 2009, p.69). “Culture is the totality of learned, socially transmitted custom, knowledge, material objects, and behavior” (Schaefer, 2009, p.57). Values, artifacts, and ideas are also part of culture (p57). With globalization there is the integration of these cultural aspects, as well as language, social movements, and ideas throughout the world (Schaefer, 2009, p.20). Internationalization helps with this integration. Internationalization is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures (Linfo, 2006). Numerous American retail firms have expanded to other countries. Many have been quite successful due to their internationalization. However, failure to study the culture, retail practices, and consumer market of the country they intend to expand to can be quite costly. Although Home Depot is one of the world’s largest home improvement stores, their expansion to Chile cost them enormous financial loss, resulting in their divestment (Bianchi & Ostale, 2006, section 1, para3). This paper will look at successful international expansion of Home Depot stores, analyze what mistakes were made in Chile, and make suggestions of what could have been done differently.
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...
This paper will give a brief introduction about the history of Nike Sweatshops which will shed the light on their public image and their manufacturing process. It will further move to the suggested alternatives, what facts impact them, their stakeholder and their impact on the economic as well as social basis. In the end, it will discuss if the given choices are legal and ethical or not.
Many people in our society today are constantly asking, "Why do sweatshops exist?" The answer to this question is that companies like Nike and Wal-Mart use sweatshops to produce their goods for a much cheaper rate, to reduce the cost of their products. The problem with sweatshops is that the workers are subject to hard work in often times poor conditions for minimal pay. But although many people may condemn sweatshops, there are some advantages that many people overlook when arguing against sweatshops and their practices.
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
The financial ramifications for the accidental cultural oversight may cost the company severely. In order to bounce back and win their loyal customers back, Footwear Bangladesh needs to strike back quickly and effectively. In addition, they will need to continue to promote their good name so as to not fall under any further scrutiny. This will involve planning and awareness of what is important to retaining their client base, including cultural sensitivities.
Jane Collins is currently a professor of rural sociology and women’s studies at the University of Wisconsin. She also has published a number of books and articles related to the apparel industry. Collins brought a great deal of knowledge to the writing of this book through her childhood experiences growing up in Virginia and her more then thirty years of research experience in Latin America. However, it could be said that having such extensive experience and narrowed knowledge of the industry may have affected the direction and perspectives found in this book.
Another area of concern is the discrepancy of differences in East Asian worker regulations and wages compared to the North American standards. Much speculation has gone toward attacking Nike for their blatant disregard of American labour ethics, but Nike is having difficulty explaining their justification of meeting offshore requirements. For example, the legal age in Indonesia was 14, an age at which compulsory Schooling has ended. Nike was criticized for apparently having girls at this age working in their factories (which wasn’t true), and was shunned for inhuman labour practices according to American standards.
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In reviewing the case of New Balance Athletic Shoe, Inc. it is clear that there are a few major problems that the company is facing. First of all, New Balance falls behind its other major competitors, Nike, Adidas and Reebok, in the area of marketing. Unlike its competitors, New Balance does not undertake celebrity endorsements. This puts them at a disadvantage when it comes to brand building. This also causes the company to lose out somewhat on gaining awareness on a global scale as it lacks endorsements in major sporting events. Most global brand names generate strong brand recognition through celebrity endorsements in sporting events that would give them the needed momentum to carry their brand name further into the global market.
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Nike has been accused of using child labor in the production of its soccer balls and shoes for Nike in Pakistan. While Pakistan has laws against child labor, the government has taken very little action to terminate it. It is said that only a boycott by the United States and other nations will have any impact on child-based industries. In addition, the U.S constitution states that child labor is an illegal and inhumane practice and any U.S. company found guilty practicing and encouraging it will be prosecuted. The World Trade Organization (WTO) prohibits member nations, like the United States, from discriminating against the importation of goods made by children.
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.