Management

CO: ” Social and Labor Issue ”

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Discuss the nature of social and labor issues that domestic manufacturers will likely face with their international suppliers. Why is it important to understand the cultural background of a foreign supplier?

ANSWER

Social and Labor Issues

Social and Labors Issues

There are various labor and social issues that a company might face when dealing with global suppliers. Ideally, trading with foreign suppliers offers a significant competitive advantage and lower cost. However, suppliers in foreign countries may be cheaper but more difficult to solve social and labor issues. Some of the social issues include language differences, which have been a great challenge while conducting meetings, labeling products, and misunderstanding in contract negotiations. Language barriers have caused communication delays, or contract negotiations can affect detailed exchanges (Gangone, 2011). Simple actions such as routine phone calls, phone connections, and time differences may influence the relationship between the suppliers and the company. Cultural differences have been a great concern due to challenges in understanding the social practices of the supplier’s country. For instance, cultural norms and religious injunctions impact the supply of various food products due to the supplier’s demand to retain specific cultural sensitivity.

Considerably, labor regulations, minimum wage pay, and labor practices vary, thus the difference between the foreign supplier and the company. The company may fail to understand the labor practices of the supplier while dealing with foreign suppliers. For instance, there may be issues with minimum wage and labor practices that lead to obstacles when dealing with a foreign supplier. Due to the pressure put on suppliers to deliver on low costs and improve the shipping dates, suppliers have responded through paying lower wages and working on excessive overtime hours (Gangone, 2011).

Understanding country beliefs and cultural beliefs foster a better relationship with external stakeholders. For instance, western cultures are more informal, while countries such as Japan value respect. Being aware of the difference is significant as the message can be conveyed as varyingly. Additionally, the business will build trust and develop a relationship with the supplier and be able to understand labor issues, language barriers, and cultural issues while dealing with the supplier and how to overcome these issues.

References

Gangone, A. D. (2011). Ethical issues in international business. The USV Annals of Economics and Public Administration, 10(3), 189-199.