Clothing Company Should Have Kept Their Domestic Operations Within The Country

Instead of relying only on domestic workers, many companies also outsource some of their labor into foreign markets. This practice can have negative effects on the economy overall, individual businesses can often benefit from this practice. Outsourcing offshore can allow companies to tap into foreign markets and expand their businesses.

* Labor outsourcing is a good strategy to decrease the labor cost. But it associates with many issues. Once outsourcing is done, the MNC cannot just stay behind. The MNC should carefully supervise on the working conditions, safety, wages, working hours, gender discrimination and human rights violations. If any of these factors going wrong and leads to sweatshop conditions, it directly affect on the reputation of the MNC. If once the name or the brand is blacklisted, it is very hard to repair the damage. Therefore, the risk of outsourcing is high.

Many businesses in United States manufacture their product overseas. This involves manufacturing products outside United States where the labor cost is cheaper. Because of cheap labor, it is often more economical for a U.S. company to manufacture overseas and pay the shipping costs than to manufacture in the United States. For a company, the savings may be substantial. However, there are negative impacts on U.S. employment, as many jobs in the United States are being outsourced and replaced by overseas positions. The manufacturers outsource production projects to save time, money or resources. The manufacturing is outsourced so as to remain competitive and maintain a steady work flow. Without outsourcing, manufacturing costs could escalate to the point at which no product would sell and all employees would have no work. Outsourcing comes

• The enormous surplus of labor in China imperils workers worldwide as international competition puts incessant downward pressure on wages and working conditions, leading the apparel and textile industries to favor the cheapest and most Draconian producers.

Although globalization allows for most products to be produced at a more efficient rate, it also has the capability to mar the economies of municipalities in first world countries. In Pietra Rivoli’s book The Travels of a T-Shirt in the Global Economy, she discusses the different viewpoints of opposing sides of an on-going battle to reduce the amount of tariffs and quotas put on the textile industries of foreign countries. For decades the textile industry in America has been on a noticeable decline, with outsourcing to third-world countries to blame. Although both faction’s viewpoints on the benefits of such outsourcing, both realize that there is only one way to gain the results they seek; which is to petition to the congressmen, including high ranking officials such as the president, in Washington D.C.

Specifically, companies are transferring these services overseas as in the case of call and help center services or companies are ordering manufacturing supplies from overseas at a much cheaper price than they could obtain them inside the U.S. Outsourcing is a term that is often used interchangeably with off shoring (Bhagwati, Panagariya, & Srinivasan, 2004).

     The exporting of American jobs is an issue that is important and will become increasingly so as more and more white collar jobs are shipped overseas. American companies in the past few decades have been sending American jobs overseas paying residents of other countries pennies on the dollar what they had paid American workers to do. This saves the companies millions of dollars on labor costs but costs Americans precious jobs.

If the labor market is no concern to you then maybe the environment is. Many foreign countries have little to no regulations on their manufacturing facilities to protect the environment. The drawback of this makes it difficult for American companies to compete. Paying fines or accumulating additional costs to meet energy standards is not cost effective. This can affect the

Most companies use this method of outsourcing to save money. There are some positive and negatives to this aspect of outsourcing in the developing nations. The companies are not being fair to their employees internationally. They do not have to provide medical insurance and benefits and they do not have to pay their employees the minimum wage. Several states updated their minimum wage requirement during the last decade. In the year from 2001 to 2003, Hartford and Meriden, Connecticut, Gainesville, Florida, Minneapolis, Burlington, Vermont, all required their city contractors to pay a wage of at least $9 if no benefits are given (McCrate, 2006). The minimum wage appear to be negligible compared with that of the U.S. The foreign companies that are competing with each other for outsourced manufacturing or service jobs are getting even lower wages. Many developing countries do not have a minimum wage requirement for the companies they are working for. United State wage and hour laws have no extraterritorial application. If a US citizen is working in France, then they would not be subject to any state or federal U.S. wage and hour laws. They would be limited to the number of hours they could work like only 35 hours per week in France. The continued abuses by the corporations not only hurt USA workers, our nation as

Although the Chinese apparel manufacturers would lose profitability due to rising cotton prices and competition from emerging countries, they stand to gain the most from the removal of U.S. quotas and tariffs. According to the author, in 2007, 95% of the 20 billion garments Americans made were purchased overseas. Due to U.S. trade barriers, China’s share of the U.S. apparel import was only 30%. Once these barriers were removed, Chinese apparel would flood the American market due to their low cost and dominance in garment manufacturing. Experts predict that China could eventually supply 85% of U.S. apparel. As they increase their market share in the

In analyzing the second reason listed for why outsourcing is used; ‘inability to attract the highest caliber of employees to job functions that may be peripheral to the organization’s core discipline’, companies employ a different kind of outsourcing tactic. This reason leads to offshore outsourcing solutions. If a company cannot attract high caliber domestic employees to job functions secondary to their main function then they seek help where labor may be less expensive and more efficient.

Labor costs in the United States are much higher than in many parts of the world. Consequently, the costs of production for labor-intensive manufacturing can be significantly reduced by moving factories overseas mainly to third world countries this is a common practice of Nike who outsource there manufacturing to other companies in countries such as Thailand and Indonesia.[ ]

Assume that you are executive of a large U.S. multinational cooperation planning to open a new manufacturing plants in China and India to save on labor cost. What factors should you consider when making your decision? Is labor outsourcing to developing countries a legitimate business strategy that can be handled without risk of running into a sweatshop scandal?

Locations for outsourcing jobs is very important as companies need to decide what is going to be the cheapest option but also the most beneficial in terms of maintaining their remaining clients and customers, there tends to be quite high volume complaints when it comes to outsourcing jobs, problems can arise often due to language barriers, so choosing the best location

The cost is kept low with labor and the production. This helps competing in the export trading world. “I am telling, in textile nobody can beat Bangladesh in price and quality”