US companies have shamelesly imported material from India, China and other south east asian countries in flagrant violation of laws and ethics that they profess in their home state. Be it child labour, retirement plans, working conditions or wage parity; American companies have ignored everything to ensure that they get 'cheap' products.
Whenever things go wrong, American companies have had no problems in shifting the blame to these countries. It is very interesting that China has been able to arm twist Mattel to issue an apology saying that the recall were less of production and more of design issue.
See this link:
http://www.economist.com/business/displaystory.cfm?story_id=9867908
Outsourcing production or services does not absolve the parent company from responsibilities of the product adhereing to guidelines and regulations. It is immature and possibly dangerous for the outsourcing firms to blame their partners for lapse. Imagine, if Mattel customers reduce buying 'Madi in China' toys, Mattel as a company would suffer tremendous drop in sale!!
Subscribe to:
Post Comments (Atom)
1 comment:
The issue is very relevant. This is the biggest challenge to the "global sourcing". If global companies want to source materials from the low-cost countries, they have to accept the risk. These low cost countries have been able to offer such low costs only because they don't maintain so much standards. But if a controversy arises, it is the front end companies which are hit. I think companies on both sides of the table are equally responsible.
These controvercies have made the global companies more cautious, and have resulted in more quality controls. I hope this results in transfer of some know-how towards the low-cost countries.
Post a Comment