Business Relocating to Third World Countries Pay Cheap Essay

Business Relocating to Third World Countries Pay Cheap - Essay Example(Vestring gutter et al, 2005) Source Bain & Company, 2005. Reasons on that point atomic number 18 several(prenominal) reasons attributing to this shift of both the service sector and the manufacturing factories to ternion globe countries. Apart from loud labour that is available, people in these countries have become a highly amend workforce in terms of manufacturing, R&D and engineering. Countries like India and China have succeeded in providing cheap labour while at the same time maintaining quality. Data shows that 77 global companies have impersonate shop in India. (Vestring Till et al, 2005) Cost of manufacturing in countries like Taiwan and Singapore is one twenty-five percent of the cost of manufacturing the same component in countries like Germany. Other reasons why some of these third valet countries attract off shoring of factories is that it enables these MNCs to expand market base. Having a ma nufacturing hub in Asia or Latin America helps them to cut transportation costs and engage in expanding business operations in these countries. Emerson for subject has put up shop in Asia and Mexico with its engineering and manufacturing being done at China, India and Philippines. Source Bain & Company, 2005 another(prenominal) major factor is the wide disparity in wages paid in the west and those in third world countries. A telephone line that would require 20-30 dollars/ hour to be paid in the West could be completed in about 1 dollar/hour in China. (Vestring Till et al, 2005) merciful right laws and adherence to such practices are also questionable in these countries. Severe lack of job opportunities, inflation and rising poverty indexes make employees work under harsh conditions without questioning authority. These have prompted obliging society to question whether this kind of manipulation and exploitation of... This report stresses that the ethics of companies off shoring factories to third world countries and managing their business by paying meagre salaries and violating several labour laws regarding minimum wages and working(a) hours are being debated constantly. It is true that to an extent the developed countries do not promote the growth of autochthonal industries as it would severely impact their business. Import duties in rich countries on a variety of goods are high which discourages third world countries in developing their own industry. This paper makes a conclusion that several multinational companies over the last decade have relocated their factories and businesses to third world countries. This to an extent has managed to promiscuous up the economy of these countries by generating employment and also creating foreign exchange. In the face of stiff tilt from emerging economies like China the concern of the business houses to look for cheaper avenues of manufacturing is true and needs to be considered. There are several examples of factories in third world countries running as per the stated labour laws of the fact nation but the number of companies doing it otherwise far exceeds those doing it ethically. It is therefore imperative that a fine remainder needs to be struck between these extremes since it ultimately boils down to the question of human dignity, basic rights of light wages, ethical business practices and whether you as a company or a consumer would want to be associated with a product that has been manufactured at the cost of anothers misery.