Case Study: Rising Wages Send Companies in Search of Cheaper Workers

Prof: Armando Laguimun August 30, 2019

Group 5:
Rodriguez, Christina Marie R.
Albaytar, Roseanne
Lin, Wan Lin

Question
1. From a global business perspective, what factors would a company’s
management consider when it decides on where to locate a manufacturing plant
in a particular country/locality? What implications do they have for the host
country/locality’s government? Please rank these factors in descending order of
importance and justify your answers.

Answers:
A company or manufacture decides where to locate its manufacturing activities
by considering a number of factors. These factors can be grouped under three broad
headings:
 Country factors
The market is segmented by geographical. Consumers are located in specific
countries/regions to set up a manufacturing plant's geographical location and
natural environment to segment the market. For example, we decide whether to
set up factories in this region according to the differences of countries, regions,
city size, climate, population density, topography and morphology. As stated in
the article, on the grounds that the expense of generation in China is excessively
high, the manufacturing plant has been moved to the nation with the most
reduced creation cost.
 Technological factors
When the company's management decided in a particular country/region to set
up a manufacturing plant, would consider in favor of the enterprise market
opportunities, make the enterprise in time to put into production, according to
the enterprise production technology conditions of preparation of new product
development plan, the necessary technical reserves, to gain the initiative in
upgrading products, open up new markets, to better meet the needs of the
market.
 Product factors
In the face of their target market, enterprises produce marketable products,
which can not only meet the needs of the market, but also increase the income
of enterprises; Marketable items can quicken the circulation of goods, increment
creation volume, reduce the production and sales costs of enterprises, improve
the work capability of creation laborers, improve item quality, and
comprehensively improve the economic benefits of enterprises.
 The host countries governments have a key role in creating the conditions that
allow for the leverage of the positive effects or for the reduction of the negative
effects of FDI on the host country's economic growth. It drives and triggers the
export of a large number of commodities, technologies and services from home
countries, increases the national wealth and, to some extent, strengthens the impact
on recipient countries. At the same time, it creates job opportunities and increases
the competitiveness of enterprises in host countries. Although the entry of
transnational corporations will play a positive role in the economic development of
some host countries, it will also bring adverse effects. company’s management
consider when it decides on where to locate a manufacturing plant in a particular
country/locality the monopoly of the host country's industry, the suppression of the
development of the host country's national enterprises, etc.

2. From a general human resource management perspective, which aspects of a

manufacturing workforce in a particular country/locality are difficult to manage?
What tentative solutions can you identify to address them? Please rank these
aspects in descending order of difficulty and justify your answers.

Answer：
Manufacturers are thinking about changing Labor deficiencies, increasing
expenses and the challenge of maintaining profit margins. Most manufacturing is too
dependent on cheap Labor. These companies tend to have large assembly sizes and
are labor-intensive. Under these circumstances, managing a large workforce is a huge
task. The manufacturing industry is facing various management difficulties in today's
society. The challenges of human resource management in manufacturing industry
are mainly manifested in the following aspects: large number of employees, complex
composition, frequent changes, high probability of labor disputes, and high labor risk
cost.

In the face of heavy pressure, technological innovation, process optimization,

performance improvement, cost control and information management have become
effective ways for Chinese manufacturing enterprises to improve their management
and enhance their core competitiveness. In the environment of rising labor cost,
manufacturing industry needs to improve its competitiveness through labor
management. Enterprises need to reform to the mature stage of labor management
at a higher level to successfully transform labor from the cost center of the
enterprise to the competitive advantage of the enterprise, drive labor performance
more effectively, reduce compliance risks, enhance flexibility to respond to the
market, and better participate in global market competition. In fact, by implementing
labor performance management, manufacturing enterprises can benefit in many
ways:
 Accurate and timely payroll, ensuring that employers and employees can work
together in a timely, efficient and documented manner.
 Collect accurate data on the causes of production delays in the production
process to analyze the production process and improve productivity.
 Reporting data on the status of the workforce, particularly the number of hours
worked, to meet compliance requirements.
 Mobilize labor to balance production and assembly throughout the process, so
that dynamic changes in production can be addressed.