Manufacturing Management a Case Study Essay
- Length: 16 pages
- Sources: 12
- Subject: Business
- Type: Essay
- Paper: #7770306
Excerpt from Essay :
Prestowitz (2005) addresses the incongruity that this is presenting to the American laborer. Even as education costs continue their annual climb, the competition for jobs in service and technology industries is making a loser out of the American white-collar worker. The economic demands created by the social parameters of American educational and professional advancement dictate such occupations must command a wage spectrum concordant with the attendant costs above mentioned. This is a wage which far exceeds that of the aspiring Indian programmer or support technician. This global proliferation of information and communication technologies such as mobile communication, the internet and voice-over-internet-protocol devices -- direct and intentional results of free trade -- has created a far cheaper workforce in many of the disciplines which gained their economic pertinence in the United States. With the enhancement of telehealth communicational possibilities, this reflects a danger that soon the consultation which is provided by our company will also be considered too costly to compete with overseas consultation.
The general effect of devaluing our own education by diminishing the value of formerly specialized skill sets is supplemented by what Prestowitz refers to as an ominous failure on the part of the United States to invest in the development of new scientific and technological endeavors on a broad scale. The propensities that helped fuel America's initial ascension are now presenting America with competitive markets of its own design and yet operating at far lower costs. The author speaks, then, less of a philosophical grievance with the nature of globalization than through a critical understanding of America's incongruent economic policies. A consideration of its current approaches to detachment from its own labor markets and a disbursement of its labor sectors throughout the world indicates that either the United States is not prepared to comprehend and operate according to the true implications of globalization or that its leadership is actually more interested in the advancement of its corporations than the protection of its labor classes. Regardless of the motive, in its current incarnation, globalization is proving rather destructive to overall economic growth in such important and previously America-dominated sectors as technology and communications. As Prestowitz remarks, "the long-held assumption that U.S. exports of robust services and high-tech products would so dominate world markets as to balance trade has been seriously undermined by the third wave of globalization. Instead, much of the technology developed in U.S. universities and funded by taxpayer money is likely to be commercialized abroad." (Prestowitz, 250) This is a pattern that is hurting the U.S. laborer, now in competition both in the production and service industries with a far more affordable foreign counterpart working in a setting with more lax environmental standards and fewer costly protections for worker rights. Were it that this economic incentive was accompanied by a more concerted effort to retain America's unique stature as a nexus point for the evolution of ideas, technologies and products through proper divestment of public and corporate assets, then the global outsourcing of jobs would not augur so poorly for the working and service classes that will be negatively impacted in our company and others like it. At present though, the United States has seen fit to allow its operations to move their facilities abroad in search of higher profit margins. While the nations where such operations have been instated seem to enjoy exponential economic growth, the United States has stagnated on multiple fronts. With labor market growth, educational standards and job opportunities all enduring an era of retraction, the only rising indicator is the cost of living here. This illustrates that America has been unwilling to create the environment suitable for a functioning economy within globalizing markets. In essence, it must endeavor to reorient its labor force for competition with 3 billion new players.
This invokes a marked and previously nonexistent form of labor and production competition that has decimated the operational capabilities of our suppliers. Reestablishing new connections after years of dealing with the same partners is revealing for our organization the types of pressures that have been created by the process of globalization. Namely, for companies such as ours that have been hesitant to send our contracts overseas, it has been difficulty to remain functional and operating at a steady clip. For our purposes though, we must consider whether we are prepared and suited to make such a change, or whether there are other angles that we might take to resolving the disruption in our flow of business. This invokes theoretical examination of strategic planning, which must enter into an evaluation of external circumstance. Matters of management theory to be addressed accordingly are "the competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited." (Teece et al., 509) a consideration of these aspects of business management will help us to make decisions with a firm theoretical grasp on strategic planning and navigating the transformation process. External factors will also be significant and due for evaluation.
A critical understanding of the forces of globalization is thus appropriate. As we find, categorical objections to the concept of globalization are less pertinent than those which accept its inevitability but question the motives and methods constituting its current form. Indeed, one of the greatest drawbacks to globalization has been its mismanagement. In the text by Bhagwati (2005), the author provides the rationale that, in and of itself, globalization is a proper prism through which to view the world economy. As a symptom of its failures, though, he points to the misappropriation of its central agency. He asserts that "the WTO has been corrupted by various lobbies (in the rich countries) into being no longer a pure trade institution." (83) Pressured by such nations as the United States, for example, to help pursue its collection of foreign debt from developing nations, the WTO is more a vehicle to the interests of its most influential parties than it is a channel for the regulation of free trade. Therefore, it must be noted as a corollary to the strategic demands placed upon our company that a change in America's approach of globalization is necessary in the very short run if we are to begin undoing a path which has already levied considerable destruction upon the American economy. The U.S. has persisted to engage in a uni-directional free trade, in which its willingness to buy foreign products at low, low prices that it may thereafter pass along to the consumer, has not been met by its retention of a dominant presence as a seller in foreign markets. Such is the problem which we have faced. The shift from the United States to smaller-scaled economies of production industries, agricultural operations and technology firms has unraveled America's presence on a world stage as a center for production and ingenuity. And on its current path, "the United States accepts asymmetric investment and trade conditions that further exacerbate U.S. deficits, which in turn result in enormous piles of U.S. Treasury bonds sitting in the coffers of foreign central banks." (Prestowitz, 251) This entitles foreign leaders dramatic latitudes for influence over U.S. economic policies. The result is the irresistible pressure imposed upon such organizations as ours, which has worked hard to retain fair labor practices, in-house production methods and domestic partnerships with suppliers. The current scenario, however, has so aggressively altered the production landscape that our survival depends upon such strategies as the adoption of outsourcing policies.
In terms of the layout strategy for our in-house facilities, it is becoming apparent that a greater degree of manufacture outsourcing should be considered necessary. Outsourcing has a number of key virtues, which are the cause of its espousal by industry and governmental leaders. According to the Farrell (2002) at the top of the list, is the financial impetus. To date "cost savings are still a key outsourcing benefit," with the reduced cost of transferring labor to external settings, or even overseas, coming from the access to new markets. (Farrell, 1) Similarly, building costs and regulations are often cheaper in smaller markets. Another benefit which Farrell notes is the freedom availed to in-house workers to focus on regular responsibilities, as specialized projects are left to the specialists, often found in independent service agencies. For our organization, this could mean a reduction in-house operations which could relocate some of the more basic dressings and wound covering manufacturing process to cheaper overseas markets. This could allow our company not to cede significant marketshare while still retaining its flagship products in its own manufacturing context. The focus could be driven by those products which local suppliers remain capable of distributing, with in-house manufacturing used to develop the products of greater quality and thus a higher premium on the market. By at…