Socialand Labor Issue
Socialand Labor Issue
Sincethe inception of global sourcing, local suppliers experience varioussocial and labor challenges when working with internationalsuppliers. The first social problem they encounter is the languagebarrier. For instance, local traders find it challenging to deal withnon-English speaking international suppliers. Second, creating aselection criteria for suitable managers is also a challenge. Severalmultinational companies cite problems such as technological,transportation and capacity handling weaknesses. Third, bordercrossing procedures and transportation delays may prevent on timedelivery of products in the market. Fourth, currency fluctuation isanother critical problem affecting many international traders. Localentrepreneurs buy goods using foreign money purchased from openbanks. If a trader purchases goods at high cost, and then the localcurrency’s value decrease before a trader can sell his or herproducts, he or she can make significant losses (Cook, 2007).
Similarly,local traders face labor problems with their international suppliersbecause different countries have distinct employees’ regulations.The workers’ union regulations in the United States are verydifferent from the policies used in another country such as China.The conflict of regulations often make it difficult for local tradersseeking to hire foreign workers difficult (Cook, 2007). Third, importmanagers are responsible for controlling processes and ensuring thatthe good purchased meet the local quality regulations. For localtraders, the managers visit the suppliers to review and confirmmaterial specifications and sources, and production compliance withthe local laws. However, it is challenging for the managers toconfirm that the ordered goods meet production specifications whenthey are ordering (Trent & Monczka, 2003).
Understandingthe cultural background of foreign suppliers is important because itassists local traders to learn possible issues that they mayexperience. For example, conducting cultural research on aninternational supplier can help a local trader to prepare in advancefor language difference, appropriate business ethics, the number ofsuppliers required for conducting a given job and legalconsiderations local traders can use if the foreign suppliers fail tofulfill their obligations (Trent & Monczka, 2003).
Trent,R.J. & Monczka, R.M., (2003). Understanding integrated globalsourcing. InternationalJournal of Physical Distribution & Logistics Management,33(7), 607 – 629
Cook,T. A. (2007). Globalsourcing logistics: How to manage risk and gain competitive advantagein a worldwide marketplace.New York: American Management Association.