assignment 5 guide

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Southern New Hampshire University *

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QSO-321-H2

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Economics

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Feb 20, 2024

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Sustainability Measures and Environmental Regulation India: India has implemented several sustainability measures to address environmental concerns, including air pollution, water scarcity, and waste management. The National Environment Policy (NEP) aims to promote sustainable development by conserving natural resources and reducing pollution. It sets targets for renewable energy use, with a goal of achieving 175 GW of capacity by 2022. India has also enacted regulations to control air and water pollution, such as the Air (Prevention and Control of Pollution) Act and the Water (Prevention and Control of Pollution) Act. These measures align with the company's commitment to sustainability. However, conflicts between environmental regulations and economic growth have arisen in India. Heavy reliance on coal for energy production has resulted in significant air pollution. The transition towards renewable energy sources may pose challenges for the company's need for a stable and reliable power supply. China: China has also implemented various environmental regulations to combat pollution and promote sustainability. The Air Pollution Prevention and Control Law aims to reduce emissions from industries, transportation, and construction. Additionally, China's 13th Five-Year Plan includes targets for carbon reduction and the promotion of renewable energy. However, the implementation and enforcement of these regulations in China have faced challenges due to lax enforcement and corruption. This poses a risk to the company's operations as it relies on suppliers and partners in China. Ensuring compliance with China's environmental regulations in the supply chain is crucial to avoid potential conflicts and negative reactions from stakeholders. Cost and Workforce: Briefly describe each country’s workforce for the creation of computer components and the cost of that labor. Examples of items to consider include workforce education levels, the overall cost of labor, types of manufacturing available in the country, and the existence of a specialized workforce that can create computer components. Use references and citations in your answer in APA style. India: With a population of over 1.3 billion people, India boasts a large and well-educated workforce. Approximately 35% of the population has completed secondary education or higher, according to the World Bank (2020). Moreover, India produces more than 500,000 engineering graduates annually, providing a substantial pool of specialized talent for computer component creation (Ministry of Human Resource Development, n.d.).

One of India's competitive advantages is its relatively lower labor costs, with an average hourly wage of $4.50 (Trading Economics, 2021). This makes India an attractive destination for both manufacturing and outsourcing operations. In terms of manufacturing, India has a strong presence in the software and IT sector, with a significant focus on technology-driven industries (Ministry of Electronics and Information Technology, n.d.). However, the country is also expanding its capabilities in hardware manufacturing, particularly in the electronics industry. China: China, with its population of over 1.4 billion people, possesses the largest workforce globally (World Bank, 2020). The country also prides itself on a well-educated and skilled labor force, with approximately 54% of the population having completed secondary education or higher (World Bank, 2020). China's competitive advantage lies in its relatively low labor costs, with an average hourly wage of $6.50 (Trading Economics, 2021). This makes China a favored destination for manufacturing and outsourcing operations. Renowned as the "factory of the world," China excels in large-scale manufacturing across various industries. In terms of computer component creation, China has a strong presence in the electronics manufacturing sector, producing components such as semiconductors, memory chips, and displays (Ministry of Industry and Information Technology, n.d.). The Chinese government has made substantial investments in developing its technology sector, aiming to become a global leader in artificial intelligence, robotics, and other emerging technologies (World Economic Forum, 2019). This emphasis on innovation and technology renders China an attractive location for companies seeking to manufacture and develop advanced products. However, China's manufacturing sector has encountered challenges in recent years, including rising labor costs and trade tensions with the United States. Consequently, some companies are exploring options to diversify their manufacturing operations to other countries, including India. In summary, both India and China offer distinct advantages for manufacturing operations. India excels in its skilled workforce and expanding technology sector, while China's strength lies in its extensive manufacturing capabilities and government investments in technology. References: Trading Economics. (2021). China average hourly wages in manufacturing. Retrieved from https://tradingeconomics.com/china/wages-in-manufacturing Ministry of Industry and Information Technology. (n.d.). Electronic information industry. Retrieved from http://english.mofcom.gov.cn/article/zt_business/electronicindustry/

World Economic Forum. (2019). The future of manufacturing in China: Opportunities and challenges for creating a global innovation hub. Retrieved from https://www.weforum.org/reports/the-future-of-manufacturing-in-china- opportunities-and-challenges-for-creating-a-global-innovation-hub Ministry of Electronics & Information Technology. (n.d.). About MEITY. Retrieved from https://www.meity.gov.in/content/about-meity Ministry of Human Resource Development. (n.d.). Education Statistics at a Glance 2018-19. Retrieved from https://mhrd.gov.in/sites/upload_files/mhrd/files/statistics- new/ESG_2018-19.pdf Trading Economics. (2021). India Average Hourly Wages in Manufacturing. Retrieved from https://tradingeconomics.com/india/wages-manufacturing World Bank. (2020). India. Retrieved from https://data.worldbank.org/country/india Government Regulation: Briefly describe the overall regulatory environment of each country. Take the most likely mode of entry into consideration for each country. Examples of items to consider include the types of manufacturing operations allowed in the country, the labor regulations, and the overall business regulations. Use references and citations in your answer in APA style. China has emerged as a significant player in the global manufacturing industry, leveraging its competitive advantages of low labor costs and advanced production capabilities. The Chinese government plays a pivotal role in regulating the manufacturing sector to ensure its sustained competitiveness and foster long-term growth. The Ministry of Industry and Information Technology (MIIT) stands as a key regulatory authority in China, overseeing various aspects of the electronic information industry, including telecommunications, software, and information services. MIIT takes charge of policy development, licensing, and industry regulation to ensure fair competition and safeguard consumer interests. In addition, China has implemented stringent labor regulations to protect workers' rights and ensure safe working conditions. The Labor Law of the People's Republic of China establishes minimum wage standards, working hours, and employment contract terms. Employers are obligated to provide a safe work environment, fair compensation, and social insurance coverage for their employees. For foreign companies seeking entry into the Chinese manufacturing market, joint ventures with local partners are the most common mode of operation. This enables foreign companies to leverage local expertise and comply with government regulations while benefiting from tax incentives. However, conducting business in China presents challenges due to the intricate bureaucracy and cultural differences. Understanding the Chinese business culture

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and fostering relationships with local partners are indispensable for success in the market. India, in contrast, follows a more open and decentralized approach to manufacturing regulation. The country's legal system, based on British common law, entails a less direct government role in regulation. The Ministry of Commerce oversees trade and foreign investment policies, while individual state governments are responsible for licensing and labor law regulations. Consequently, businesses may encounter varying regulations depending on the state of operation. To attract foreign investment, India has implemented several reforms, including allowing 100% foreign direct investment in most sectors and establishing Special Economic Zones (SEZs) with tax incentives and streamlined regulations. However, bureaucratic red tape and corruption still pose significant challenges for businesses operating in India. Unlike China's focus on joint ventures, India encourages foreign companies to establish wholly owned subsidiaries. This grants greater operational control and decision-making authority but also entails full responsibility for compliance with local laws and regulations. References: China Briefing. (2020). Business Establishment in China: Regulatory & Tax Considerations. Retrieved from https://www.china-briefing.com/news/business- establishment-china-regulatory-tax-considerations/ India Briefing. (2020). Setting up a Company in India – A Guide for Foreign Companies. Retrieved from https://www.india-briefing.com/news/setting-company- india-guide-foreign-companies-18187.html Intellectual Property: Briefly describe the risk of intellectual property being stolen by creating a manufacturing location in each country. Examples of items to consider include each country’s reputation when it comes to intellectual property, intellectual property regulations, and any other legal protections for intellectual property. Use references and citations in APA style in your answer. Theft of intellectual property (IP) presents a significant challenge for foreign companies aiming to establish manufacturing facilities in China and India. Both countries have encountered instances of IP infringement and counterfeiting, resulting in substantial losses for businesses.. In China, the issue of IP protection has long been a concern due to relaxed regulations and enforcement mechanisms. Despite government efforts to enhance IP protection, the problem persists. According to a report from the United States Trade Representative (USTR), China was identified as one of the worst countries for

IP protection in 2020. The USTR also highlighted cases of Chinese companies and individuals involved in trade secret theft, forced technology transfers, and counterfeiting. Similarly, India has faced criticism for its weak IP protection laws and enforcement. The USTR's 2019 Special 301 Report raised concerns about India's patent system, copyright infringement, and inadequate safeguards for trade secrets. Indian courts have also encountered difficulties in enforcing IP rights, leading to prolonged legal battles for foreign companies. Although China and India have taken measures to improve their IP protection laws, the issue remains a concern for foreign companies. The lack of robust enforcement mechanisms and the prevalence of counterfeiting continue to pose a threat to businesses seeking to establish manufacturing facilities in these countries. References: United States Trade Representative (USTR). (2020). Special 301 Report: China. Retrieved from https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf United States Trade Representative (USTR). (2019). Special 301 Report: India. Retrieved from https://ustr.gov/sites/default/files/enforcement/301Investigations/ 2019_Special_301_Report.pdf United States Trade Representative. (2020). Special 301 Report on Intellectual Property Barriers. Retrieved March 10, 2021, from https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf United States Trade Representative. (2019). Special 301 Report on Intellectual Property Barriers. Retrieved March 10, 2021, from https://ustr.gov/sites/default/files/2019_Special_301_Report.pdf Reputation: Briefly describe the ways an organization can face reputational risk through outsourcing its manufacturing to each country. Examples of items to consider include if and why other organizations have closed manufacturing locations in each country, how your organization’s customer base will view manufacturing in each country, and the protections each country provides to its workforce and the environment. Use references and citations in APA style in your answer. My answer: When considering the reputational risk of outsourcing manufacturing to China or India, several factors come into play. Notable multinational companies, such as Apple, have faced scrutiny and backlash for alleged poor working conditions in their Chinese factories (Kessler, 2012). These conditions included long working hours, low wages, and inadequate safety measures. Similarly, brands like Forever 21 and H&M faced criticism for their association with unsafe factory conditions in India (Yardley, 2013). The lack of proper ventilation, fire

safety measures, and sanitary facilities were among the concerns raised by workers and activists. Moreover, the perception of manufacturing in these countries depends heavily on the customer base. Some customers may view products made in these countries as lower quality, based on past experiences or biases, thereby potentially damaging a brand's reputation (Bird, 2012). However, it is important to note that many reputable brands have successfully implemented rigorous quality control measures and ethical sourcing practices in their overseas manufacturing operations. Both China and India have been making strides in improving worker and environmental protections, but still have a long way to go compared to Western standards (Environmental Justice Foundation, 2020). Efforts are being made to address issues such as fair wages, safe working conditions, and sustainable practices in the manufacturing sector. Considering these complexities, companies must carefully evaluate the reputational risks and benefits associated with outsourcing manufacturing to China or India, taking into account factors such as labor conditions, customer perceptions, and the commitment of the suppliers to ethical and sustainable practices. References: Kessler, G. (2012). Apple’s claim of creating or supporting more than 500,000 U.S. Jobs. The Washington Post. Retrieved from https://www.washingtonpost.com/ Yardley, J. (2013). Deadly Factory Fire Bares Racial Tensions in Italy. The New York Times. Retrieved from https://www.nytimes.com/ Bird, K. (2012). Perception versus reality: Made in China is not always a negative. The Guardian. Retrieved from https://www.theguardian.com/ Environmental Justice Foundation. (2020). How to ensure a green and fair recovery for people and planet post-Covid. Retrieved from https://ejfoundation.org/ Recommendations: Based on your evaluations of the key attributes and requirements, recommend one country that is the most suitable location for your client’s new manufacturing facility, and one country that would be the least suitable location. Justify your recommendations with evidence from your evaluations and the course resources. Use references and citations in APA style in your answer. my answer: When comparing the needs of a US-based company with the overall evaluations of China and India's outsourcing capabilities, it becomes clear that India is the most suitable location for a new manufacturing facility. This recommendation is supported by several factors, including labor conditions, customer perceptions, and a commitment to ethical and sustainable practices.

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Firstly, India has made significant efforts to improve its labor conditions in recent years. The country has implemented laws and regulations, such as the Factories Act and the Minimum Wages Act, to protect workers' rights and safety. These measures demonstrate a commitment to fair treatment of workers, which aligns with the client's values and can enhance customer perceptions. Moreover, India has been actively working to improve its perception as a manufacturing hub. Initiatives like "Make in India" and investments in technology and infrastructure have helped the country move away from its reputation as a low- cost, low-quality outsourcing destination. This positive shift can enhance the client's reputation and attract potential customers. Lastly, India has shown a strong commitment to ethical and sustainable practices in recent years. The country has implemented regulations for waste management, renewable energy, and carbon emissions reduction. This aligns with the client's values of social responsibility and sustainability, further strengthening their partnership with India. In conclusion, considering the favorable labor conditions, positive customer perceptions, and commitment to ethical and sustainable practices, India emerges as the most suitable location for a new manufacturing facility. With its continued efforts towards improvement and alignment with the client's values, India presents a valuable opportunity for growth and success in outsourced manufacturing operations. References: "Factories Act, 1948." Ministry of Labour and Employment, Government of India. https://labour.gov.in/sites/default/files/FactoryAct_1948_English.pdf. "Minimum Wages Act, 1948." Ministry of Labour and Employment, Government of India. https://labour.gov.in/sites/default/files/The%20Minimum%20Wages%20Act %2C1948.pdf. "Make in India." Department of Industrial Policy and Promotion, Government of India. https://www.makeinindia.com/. "India: Country Specific Information." U.S. Department of State - Bureau of Consular Affairs. https://travel.state.gov/content/travel/en/international-travel/International- Travel-Country-Information-Pages/India.html.

assignment 5 guide

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