Term Paper: Multinational Corporations Around the Globe

Pages: 8 (2849 words)  ·  Bibliography Sources: 15  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper

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[. . .] Despite such systematic advantages, this management scheme can also limit the firm's potential sources of innovation. And while innovation in this type of productive environment is certainly not as abundant as in intellectually and technologically-based manufacturing firms, innovation does play a role in improving efficiency . However, knowing the authoritative nature of The Hangzhou Artsun Garment Company's operating model, innovations are most often initiated by executive bodies or even external entities (for instance when there is an equipment innovation initialized by a supplier).

In addition to the different directorial approaches utilized by The Hangzhou Artsun Garment Company and its American counterparts, the products produced by these firms differ greatly. The production process of The Hangzhou Artsun Garment Company requires a large facility with many low-skilled staff members. Whereas, Apple or Google's productive environment is typically located in an office setting and staffed with highly educated designers and engineers. Furthermore, while Apple and Google continue to rely on innovative mechanisms for the broadening of product lines, The Hangzhou Artsun Garment Company has been able to diversify its product lines and client base by assuming the additional role of satellite production facility for other global producers like Levi's (Colwell, 2002).

In knowing the essentiality of high levels of low-skilled labor in Hangzhou Artsun Garment Company's production process, this company has ideally located itself in mainland China (Global Sources, 2011). The ideality of this location is proven when examining the costs of labor around the world. In keeping within the comparison to United States, the wage differences are quite astounding. In fact, according to recent research, it has been determined that, "hourly compensation rates in China are approximately 3% of the level in the United States." Moreover, human rights legislation is not very stringent in this region, and thus employees are able to work longer shifts and production facilities are able to run for many more hours . As a result of these gaping discrepancies and exploitive tactics, The Hangzhou Artsun Garment Company and its domestic peers have been able to offer prices that other developed countries (like the United States) simply cannot compete with (Lett & Banister, 2006). Even when realizing significant transportation, distribution and customs costs, The Hangzhou Artsun Garment Company has still been able to expand its operations to global markets, while securing their own competitive advantage and continuing to offer competitive prices (Hejazi, 2011).

As a result of their current system and its oppressive style, many global entities continue to push for stronger and more reliable human right initiatives. Historically, this type of legislation has been extremely hard to enforce due to the seemingly endless potential for corruption (Bradsher, 2009). Despite the fact that countless attempts have been made to eliminate these dishonorable business tactics, equally disgraceful methods have been used to prevent the effective implementation of worker protection initiatives. That is, factory owners see themselves forfeiting huge profits by adhering to strict labor laws (Bradsher, 2009). Thus, these individuals come up with creative ways to avoid having to operate on a more employee-friendly basis (Bradsher, 2009). Consequently, the tactics of organizations like The Hangzhou Artsun Garment Company must change in order for them to gain more reputable positions in the global market.

Also, while companies like Apple and Google have not had to deal much with customs legislation and trade organizations, The Hangzhou Artsun Garment Company has had to thoroughly educate itself in these areas in order to effectively globalize its business. Like Apple and Google, The Hangzhou Artsun Garment Company does most of its business in highly developed nations and consumer markets, yet this company has had to be much more strategic and diligent in its approach as a result of the higher levels of complexity in its exportation process. The absence of Free Trade Agreements between China and Europe has posed a particular problem for The Hangzhou Artsun Garment Company because its largest export markets are Western Europe, the United States and Scandinavian countries (Global Sources, 2011). Because of similar concerns from other Chinese manufacturers, the creation of a China-Europe Free Trade Agreement has been a topic of discussion in recent World Trade Organization meetings (The World Trade Organization, 2009). Despite the ongoing discussions and lack of action from the WTO thusfar, the Chinese government has helped The Hangzhou Artsun Garment Company by privatizing its operations and subsequently allowing this company to secure foreign investments and forge new productive partnerships (Pyke, Robb, & Farley, 2000).

Ultimately, though they are both in the business of manufacturing goods which eventually end up in the hands or desktops of consumers, the processes useful for companies like Apple and Google are very different from the production tactics of The Hangzhou Artsun Garment Company. In researching and examining these differences, one is able to effectively realize the alternative growth patterns of manufacturing industries in different regions of the world. While each of the previously mentioned firms has achieved significant global success, the methods and locations in which their products are created and distributed are unique and specifically designed to foster the individual organization's growth. Even though some of The Hangzhou Artsun Garment Company's tactics in achieving its comparative advantage and global competitiveness are certainly exploitive, it is hard to argue with the fiscal success and corporate status they have achieved. The same could be said about Apple and Google regarding success, though the economic structures existing in their operating locations required them to create new ways of initiating profitable business systems. Therefore, no matter the product, in order for a manufacturing company to be successful they must be able to optimally utilize the available resources and locational stage-posts in order to achieve success in a given atmosphere. And as each of these very different organizations have proven, success is always possible, no matter what the environment.

Bibliography

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