Global Considerations

Question 1

Global Sourcing of Inputs

Answer 1

When a business sources their inputs from foreign countries.

Question 2

What are the advantages and disadvantages of global sourcing inputs?

Answer 2

Advantages:
- Lower costs
- potential for higher quality
- higher speed
- reliability

Disadvantages:
- Exchange rates
- logistics
- political and ethical issues
- delivery times
- potential for lower quality

Question 3

Overseas manufacturing

Answer 3

Is a manufacturing-business-specific style of operations where goods are manufactured in a foreign company.

Question 4

what are the advantages of Overseas Manufacturing?

Answer 4

• lower labour costs
• some foreign countries have better tax benefits for businesses
• can be produced in strategic locations

If there’s a high customer base in a foreign country, setting up manufacturing in the country can reduce travel costs and transport time. Or if a foreign country has more people with specialised skills, setting up manufacturing in that ccountry can lead to higher qualified employees.

Question 5

What are the disadvantages of Overseas manufacturing?

Answer 5

• Businesses must comply with the foreign country’s regulatory laws and cultural differences.
• Quality control is harder to enforce and quality may be lower than if produced in Australia due to different materials costs and standards in different countries
• potential for longer production, costs and transport times.

Question 6

CSR Considerations (overseas manufacturing)

Answer 6

Local labour laws must be taken into consideration, and treatment of the foreign workers must be ethical.

Question 7

Global Outsourcing

Answer 7

Is the act of contracting business procedures or services, e.g. customer service or accounting, to third-party providers in foreign countries.

Question 8

What are the Advantages of Global outsourcing?

Answer 8

• Lower costs
• Specialized expertise from foreign countries
• Ability to focus on core business activities

Question 9

What are the disadvantages of Global outsourcing?

Answer 9

• Potentially lower service quality and data security
• lack of control
• cultural differences
• Foreign laws