- Created by: Alex Stephens
- Created on: 20-05-14 11:33
Local and global production
- The need to be competitive means that many companies sell their products all over the world.
- Many companies employ design teams situated throughout the world so they can design for a local market or culture.
Offshore manufacturing of multinationals
- Offshore manufacture is a driving force in the global marketplace, there is an increased awareness by multinational companies based in developed countries of the value of offshore manufacturing as a vital strategic tool.
- Many companies will draw upon the individual expertise of other countries to develop new products, particularly in the field of technology.
- Companies are relocating to less-developed countries such as India, China and former Soviet nations and outsourcing their work.
- Initially jobs in developing countries were created through the manufacture of shoes, cheap electronics and toys, subsequently simple service work.
Local and global production
- The driving forces are digitisation, the Internet and high-speed data networks that cover the entire globe.
- Design data can simply be sent to another country for manufacture or localised expertise can provide the design and development of products.
- Why do multinationals manufacture offshore, or outsource? The answer is simple: it costs them less. It is now possible to recieve the same quality work at a fraction of the cost than if Western companies manufactured in their own countries.
- In addition, by having bases in developing countries it is possible to gain greater access to expanding overseas markets.
- This calls into question ethical issues such as large-scale unemployment in developed countries and exploitation of labour in developing countries.
- Issues relating to local and global production are concerned with the effects of the global economy and of multinationals on quality of life, employment, and the environment.
Advantages and disadvantage of global manufacturin
- Economic regeneration of local area through increased employment in manufacturing and service industries.
- Improvement in living standards through career development and multi-skilling of workforce.
- Physical regeneration of local area through development of infrastructure, transportation and/or local amenities.
- Widening of the country's economic base and enabling of foreign currency to be brought into the country, which improves their balance of payments.
- Enabling of the transfer of technology that would be possible with the financial backing of multinationals.
Advantages and disadvantages of global manufacturi
- Increased pollution and waste production as a result of manufacturing activities.
- Destruction of local environment to build factories, processing plants, infrastructure, etc.
- Lower wages than workers in developed countries where a minimum wage operates.
- Promotion restrictions as managerial roles occupied by employees from developed countries.
- No unions for equal rights issues including unfair dismissal/hire and fire.
- Lower safety standards when using 'sweat shops'.
- Devaluing of traditional craft skills, replacement by repetitive 'machine minding' tasks.
- Local community can become dependant on multinationals, leaving community devastated if the multinational pulls production.