LABOR RELATIONS 6
SamsungElectronics is a South Korean multinational organization. It designs,manufactures and sells various consumer products such as televisions,phones, tablets, blue ray and DVD players, digital cameras, andcamcorders. It also makes various home appliances, accessories, andperipherals. As a international business, the location of Samsung’smanufacturing facilities is a significant ingredient to its success.Erroneous selection of a site may result in inadequate access toworkers, customers, and materials As a strategy to increase the reachto factors of production, the company contemplates opening a foreignmanufacturing facility in one of the three countries, including theUnited States, Italy, and India (Overview, n.d).
According tostatistics provided by the international labor organization, thecontext indicators for the United States reveal that 41% of thepopulation has advanced education. The workforce in the country iscomposed of 57% female and 69% men. The overall labor forceparticipation rate is 63%. The employment-population ratio as of 2015was 59% while the related underemployment rate is 4%. The rate ofunemployment is 5% for both men and women. The average monthlyearning of employees is 809 United States Dollars. The labor cost peremployee in the manufacturing sector is 24 dollars per hour. The rateof days not worked due to strikes and lockouts is one (Countryprofiles, n.d).
The contextindicators for Italy reveal that the share of the adult populationwith advanced education is only 13%. The unemployment rate is 13and11 percent for women and men respectively. The labor cost peremployee in the manufacturing sector is 48, 342 Euros per year, whichis equal to 54,471.28 dollars, or 1, 815.7 dollars per month. Thenumber of unworked days due to strikes and lockouts is 1.08 (Countryprofiles, n.d).
The statisticsfor India reveal that the labor participation rate is 26% and 74% forwomen and men respectively. The overall labor participation rate is54%. The level of unemployment is 4% and 5% for women and menrespectively. The average monthly earnings per employees are 7,479Indian Rupees equivalent to 112 dollars. The number of unworked daysdue to strikes and lockouts is 3.5 (Country profiles, n.d).
The UnitedStates of America wins the potential for further considerationcompared to Italy since it has a higher number of experiencedpersonnel. The above analysis indicates that both the United Statesof America and Italy have an ample supply of qualified labor comparedto India. Besides, the rate labor force participation for the twocountries is higher than that of India, thus, depicting that themanufacturing facility is likely to have an abundant supply of labor.Besides, the two states have a higher number of employees working inthe manufacturing sector to show that they have ample and qualitylabor for a manufacturing plant. On the other hand, Italy and the U.Shave a lower number of days not worked due to lockouts and strikescompared to India. The analysis reveals that locating the plant inthe two countries is bound to experience high rates of laborconsistency compared to India where the plant is likely to close downfor more hours due to strikes. Therefore, locating the plant in Indiais bound to add more costs in terms of manufacturing downtime.However, the cost of labor in India is expected to be lower than thatof either the US and Italy (Country profiles, n.d).
The first additional factor to consider in the selection of thecountries is real estate. Samsung managers should evaluate thepotential land in the USA for the manufacturing plant to assess itsfeasibility with the requirements of the company needs (Gigerich,2015).
The secondfactor is the tax structure in the United States. The managers shouldbuild a picture of the overall local, regional and state taxes as astrategy to ascertain the profitability of the plant in the new site.Besides, it is imperative to investigate on any changes in the taxstructure and evaluate how such variations might affect the operationof the manufacturing facility (Gigerich, 2015).
The third factoris infrastructure. Samsung managers should ensure that the newlocation has sufficient infrastructure to meet the facility`s currentand future needs. Specifically, they should assess telecommunicationnetworks, transportation, and electric infrastructure during the siteselection activity (Gigerich, 2015).
The fourthvariable is government incentives. The managers should establish athorough understanding of the various forms of regional, local andstate or economic development incentives provided by the governmentas a strategy to lower the costs of the project. Although incentivesoffered do not affect the selection of a particular area, it is animportant determinant of the feasibility associated with a project(Gigerich, 2015).
The fifthvariable includes the regulatory environment. Samsung managers mustunderstand how the local, state and regional governments pose toaffect the operation of the manufacturing plant. Specifically, themanagers should pay attention to the process of obtaining buildingplans approvals, utility connection approvals, and environmentalpermits. Other authorizations such as waste disposal can have asignificant impact in the facility (Gigerich, 2015).
Finally, themanagers should consider unionization rates associated with theirarea of choice. It is imperative to evaluate the potential impact ofunions on the working capacity of the plant, including the laws onthe right to work in a given state. Additional attention shouldconsider the cost of living, weather, crime rates and quality ofschools in the area (Gigerich, 2015).
Countryprofiles, (n.d). InternationalLabor Organization.http://www.ilo.org/ilostat/faces/home/statisticaldata/ContryProfileId?_afrLoop=446704592347466#!%40%40%3F_afrLoop%3D446704592347466%26_adf.ctrl-state%3Dzw90ixvwf_182
Gigerich,L.(2015). Key business issues to consider when making an internationallocation decision.Area Development.Retrieved on 26September 2016 fromhttp://webcache.googleusercontent.com/search?q=cache:KnayVwJvAfYJ:www.areadevelopment.com/LocationUSA/2015-US-inward-investment-guide/international-location-decision-issues-to-consider-2727261.shtml+&cd=1&hl=en&ct=clnk
Overview, n.d).Samsung. Retrieved on26September 2016 fromhttp://www.samsung.com/us/aboutsamsung/ir/newsMain.do