More and more transnational corporations are setting up branches and factories in less developed nations. This essay will first suggest that reduced labour costs is the primary benefit of these companies, while bad publicity because of Human Rights abuses is the main drawback.
The main reason multinationals set up shop in poorer countries is because it is much cheaper for them to get their goods manufactured there, due to comparatively lower salaries. In an ever more competitive marketplace, it is simply unsustainable for most companies to pay Western wages when they can pay someone a fraction of the cost to do the same job. For example, the only reason an iPad or iPhone can be sold for less than $499 is that a worker in China can assemble the unit for approximately one-tenth what an American would expect to be paid.
Despite this economic benefit, Apple has recently come under scrutiny because of the appalling conditions in many of its Asian factories. Workers in their Foxconn plant in China had to work under such grim circumstances, including 15-hour shifts, pressure to meet unrealistic quotas and low wages, that several of them committed suicide by leaping off the factory roof. The New York Times reported that this resulted in a 12% drop in the sale of Apple products, especially after it was reported that Apple had installed nets to stop any employees killing themselves in the future.
In conclusion, huge global companies may reap the rewards of low operating costs in developing countries, but they should also keep in mind that they have a responsibility towards their workers and any infringements of their rights could negatively affect their image and stock price.
More and more transnational corporations are setting up branches and factories in less developed nations. This essay will
first
suggest that
reduced
labour
costs is the primary benefit of these
companies
, while
bad
publicity
because
of Human Rights abuses is the main drawback.
The main reason multinationals set up shop in poorer countries is
because
it is much cheaper for them to
get
their
goods
manufactured there, due to
comparatively
lower salaries. In an ever more competitive marketplace, it is
simply
unsustainable for most
companies
to pay Western wages when they can pay someone a fraction of the cost to do the same job.
For example
, the
only
reason an iPad or iPhone can
be sold
for less than $499 is that a worker in China can assemble the unit for approximately one-tenth what an American would
expect
to
be paid
.
Despite this economic benefit, Apple has recently
come
under scrutiny
because
of the appalling conditions in
many
of its Asian factories. Workers in their
Foxconn
plant in China had to work under such grim circumstances, including 15-hour shifts, pressure to
meet
unrealistic quotas and low wages, that several of them committed suicide by leaping off the factory roof. The New York Times reported that this resulted in a 12% drop in the sale of Apple products,
especially
after it
was reported
that Apple had installed nets to
stop
any employees killing themselves in the future.
In conclusion
, huge global
companies
may reap the rewards of low operating costs in
developing countries
,
but
they should
also
keep
in mind that they have a responsibility towards their workers and any infringements of their rights could
negatively
affect their image and stock price.