Benefits, Risks, and Responsibilities of Global Sourcing
13.5 Describe the benefits and risks of global sourcing.
Global sourcing brings enormous benefits to firms, primarily leading to improved performance and superior competitive advantages. However, global sourcing also entails various risks. Firms that undertake global sourcing are confronted with challenges and opportunities for corporate social responsibility.
Benefits of Global Sourcing
The main benefits of global sourcing are cost efficiency and the ability to achieve strategic goals. Let’s examine these.
Cost Efficiency
The primary rationale for global sourcing is to reduce the firm’s costs of inputs and operations. Exhibit 13.10 reveals typical manufacturing wages per hour of workers ...
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