The cost of conducting businesses in developed countries can behigher as compared to relocating the same company function in anothercountry, especially a developing one. In the modern day, hugemultinational corporations (MNCs) based in wealthy nations such asthe United States, continue to subcontract their operations withobjectives of increasing the global market share, minimisingproduction costs and maximising on revenues. Nike Inc. is among theMNCs synonymous with outsourcing majorly in African and Asiancountries (Porteous & Rammohan, 2013). Nike Inc. shifted severalof its production functions far away from the headquarters inBeaverton, Oregon. The contracting out of these either businessfunctions can benefit or detriment the cultures of the countries inwhich the company operates. In this regard, this paper discusses thecompany’s global stratification impact local culture.
Impact of Global Stratification on Local Culture
The industrialisation revolution is responsible for the arrangementof states according to the income levels. The high-income levelnations were first to industrialise therefore began employing cheaplabor from the low-income countries. Moreover, colonization left amajority of the colonised countries with fewer resources to pursueeconomic activities. Some of the colonising nations overtook thestate`s resources and enslaved the population to produce their goodsand services. This situation is among others that have created a gapbetween the wealth, middle and the low-income nations. The wealthynations are developed therefore have fewer resources and highproduction costs prompting them to exploit the resources and thelabor of the low-income countries.
One of the major benefits of global stratification because of Nike’soutsourcing to the developing countries is the economy stimulationand influence in the sense of attaining overall economic well-beingof the recipient culture. Outsourcing jobs create more jobs to thereceiving culture therefore, raise their living standards as well.Nike Inc.’s presence in India improved their economy up to 70%(Porteous & Rammohan, 2013). The contract workers benefit fromNike`s education and training initiatives to create and increaseskilled workforce, therefore, increasing investment value to thecommunity. The receiving culture improves diplomatic ties intertwinedamong the countries that Nike serves.
Global stratification in the form of MNCs outsourcing brings aboutundesirable effects on the recipient culture. For instance, there arereports of mistreatment of contractors in the workplace in India,Indonesia and Pakistan. Audit reports reveal that some workers inVietnam, where the company outsources, experience long working hourswith exposure to toxic materials without safety training, protection.Contractors receive low wages than deserved. For example, Nike Inc.employees in Vietnam do not get more than $42 per month in comparisonto payments for the domestic firms. The contractors have no powerover the association because Nike Inc. does not accept unionmembership. In China, where Nike Inc operates, the government protectits workers under All-China Federation of Union, but it rarelyconfronts workers welfare, rights and issues (Porteous &Rammohan, 2013). Moreover, there are reports of overworking the Chinaworkers depriving them of the quality time with their family.
Impact of Global Stratification in the United States
Global stratification creates more marketplaces and generates newideas for products and services throughout the world. It alsoincreases trades for United States products, members and sources(Mukherjee S & Mukherjee K, 2015). This increment acceleratesmore projects, reduces the marketing time and boosts internationalbusiness. It also opens up communication technologies and networks.
The bad side of global stratification in the United States is that itinfluences immigration that invites opportunity competition betweenthe residents and non-residents. United States employees experiencelow wages (Mukherjee S & Mukherjee K, 2015). The phenomenoncontributes to deflation in the United States money value.
The Biggest Winner is the Home Country
Currently, United States is the leader in outsourcing jobs primarilyin nations such as Indonesia, India, China and South East Asiancountries. This situation links the contracting company that is NikeInc. as the biggest winner chiefly operating from the high-incomelevel United States. One of the factors that contribute to itswinning is the diversion of the national recipient income intotheirs. The pollution effects shift to the receiving culture makingthe outsourcer’s environment relatively safer.
Mukherjee, S., & Mukherjee, K. (2015). Anempirical study on possible consequences of implementing offshoreinformation technology outsourcing strategy. InternationalJournal Of Business Environment, 7(1),1. http://dx.doi.org/10.1504/ijbe.2015.065993
Porteous, A., & Rammohan, S. (2013).Integration, Incentives and Innovation Nike`s Strategy to ImproveSocial and Environmental Conditions in its Global Supply Chain.Stanford Initiative For The Study OfSupply Chain Responsibility (SISSCR).