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Considerations For Relocating A Plant Facility to a Less Developed Country

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Imagine that you own a company that manufactures cheap sunglasses. To lower production costs, you want to move your factory from your developed country to a more cost-effective nation. Choose a prospective country to which you will move production. What elements of the national business environment might affect your move? Are there obstacles to overcome in the international business environment? How will managing your company be different when you undertake international activities? What challenges will you face in managing your new employees?

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This solution explores the pros and cons of relocating plant operations from a developed country to a less developed country, giving multiple real-life examples.

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Dear Student,

Production costs often make many companies consider alternative countries to host their production operations. There are many things to consider when doing this. Logistics, ethical concerns, union relations, health concerns, safety/environmental factors, and governmental regulations all factor into the decision to relocate plant operations to another country. For this assignment, I will provide you with three countries to consider, providing pros and cons to relocation.

Mexico

Pros:
•The number of border cities would help cut costs in terms of labor, health, and environmental factors.

•The average wage in Mexico is $3/day. By offering better compensation package in the worker's home country, you can create a stable workforce that is able to support your organizations' production needs.

•Mexican environmental laws are more favorable to production facilities. Mexican laws allow higher level of exposure to toxic chemicals than ...

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