Week 4 discussion topics and key questions

Business Management Post Responses

On one hand, I agree that a centralized manufacturing strategy has significant advantages; on the other hand, I question the advisability of focusing on centralized manufacturing in this instance. Certainly, the high value-to-weight ratio is one consideration; however, other considerations (such as the various costs of doing business in particular regions) may be more important than the value-to-weight issue.

Specifically, in addition to being the undisputed center of digital technology development in the United States, the Silicon Valley is (largely because of that fact) also one of the most expensive places in the country in terms of the cost of land, construction or facilities, and in terms of professional wages and costs of living. It is conceivable that those factors might easily outweigh the relative importance of the positive aspects of centralizing manufacturing operations in Silicon Valley, necessarily. There may be significant reasons to consider centralizing manufacturing operations in Silicon Valley, but I believe it is a substantial exaggeration to characterize that the decision to do so will necessarily mean that the "benefit to this manufacturer will far outweigh the initial costs." That is particularly true to the extent the rationale for centralizing manufacturing in Silicon Valley is "exposing [the workforce] to new knowledge" since the principal industry at Silicon Valley is technological development rather than technological manufacturing per se.

Mainly for those reasons, I tend to agree that after a full consideration of all of the issues, it might make more sense to consider centralizing manufacturing operations elsewhere. In that regard, it might make good business sense to consider foreign countries, precisely because the overhead costs (of labor, in particular) are likely to be substantially lower in other countries, especially as compared to overhead costs in Silicon Valley.

However, the prospect of relocating manufacturing operations abroad raises new potential issues that must be considered. Specifically, it may be ethically permissible to take advantage of certain prevailing circumstances in foreign countries that are responsible for lower labor (and other overhead) costs. On the other hand, there are also limits to that concept. It is not ethically permissible to relocate manufacturing operations to countries where economic and social conditions are so bad that the population is desperate for work at wages that are exploitative by any objective standard.

Similarly, it is ethically unacceptable to allow American companies to exploit foreign workers by allowing manufacturing processes to be carried out in work environments that would violate the most basic concepts about appropriate and acceptable vocational situations and circumstances if those processes were being conducted within the U.S. And subject to U.S. employment laws and standards set out by occupational hazard regulations.