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Outsourcing to Low Cost Country in spite of Needs at Home

Some argue that investing in emerging economies greatly increases the economic development and standard of living at the base of the global economic pyramid. Others contend that moving jobs to low-cost countries not only abandons CSR for domestic employees and communities in developed economies, but also exploits the poor in emerging economies and destroys the environment. If you were a CEO of a MNE headquartered in a developed economy that is moving production to a low-cost country since sales are decreasing 10% annually due to competitors' lower prices, how would you defend your firm's outsourcing jobs when unemployment is rising in the home country?

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I would defend my position by pointing out the obvious: not moving the production will lead to the demise of the company, which ...

Solution Summary

This solution evaluates a scenario in which you are a CEO of a MNE headquartered in a developed economy that is moving production to a low-cost country since sales are decreasing 10% annually due to competitors' lower prices, and you must defend your firm's outsourcing jobs when unemployment is rising in the home country.

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