1. One major issue concerning outsourcing of manufacturing to developing countri
ID: 420194 • Letter: 1
Question
1. One major issue concerning outsourcing of manufacturing to developing countries is poor working condition and low wage. Some consider this as exploitation. Do you agree? Explain.
2. One source of market imperfection is asymmetric information. One problem that could arise as the result of asymmetric information is moral hazard. Discuss examples of moral hazard in your organization and what can be done to minimize it?
3. A controversial issue concerning multinational corporations operating in developing countries is poor working condition and low wage. Some consider this as exploitation of labor. Do you agree? Explain.
4. Property right, patent and copy right are prerequisites of economic growth. Discuss why this may be a concern for foreign firms operating in developing countries. Justify your answers, ideas and reasoning by using appropriate examples and references. A typical answer should be more than 200 words but no more than 500 words.
Explanation / Answer
Answer 1 & 3:
Though outsourcing a business to a developing countru has its own benefits to both a company who outsourced the work and the company who provided services to outsourced work, I think the one of the major issue concerning with this is that the developing country experiences poor working condition and low wage, and exploitation. Despite the fact that third party companies can often provide quality labour at a drastically reduced cost, there are sometimes moral issues that can accompany this type of labour. Outsourcing benefits corporations by cutting costs, increasing their profits and product quality. On the other hand, workers have shown displeasure at the deteriorating standard of working conditions. Often, they work many hours and receive low wages, especially in the manufacturing sector.
Lets take an example of Foxconn, the manufacturing company that makes products for Apple, Amazon, Hewlett Packard, and others, workers there often have to sleep in dormitories that have up to thirty people living in a three-bedroom flat. Workers also frequently have to work extremely long hours, to the tune of eighty hours per week. Furthermore, workers often have to stand, or are only allowed to use one third of a chair to sit on in order to keep them more focused. Life at these types of companies can be very difficult for the workers, and it is definitely something to consider when it comes to making business decisions for major corporations.
Answer 2:
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