In search of profit maximization and expenditure cuts, many multinational corporations outsource their operations to third-world countries. This outsourcing contributes to global stratification significantly because companies exploit the unfavorable working conditions and low salaries in other states for the benefit of their own. This paper will analyze the issue in the context of Nike, which owns hundreds of stores around the world and outsources its supply chain operations to factories in developing countries.
Impacts on Local Culture
Global stratification has both favorable and negative impacts on local culture. When a multinational corporation decides to outsource its production, new job openings appear in a destination country. An economic boost is expected to some extent when the number of jobs increases. Another positive aspect of outsourcing is the exchange of experience. Nike has many factories in the Pacific Asia region, and local employees can learn and strive and eventually open an independent shoe manufacturing facility if they have an opportunity (“Nike statement,” 2019). However, wages are low even if a hundred-billion-dollar company arrives in a third-world country. In most circumstances, corporations are interested in outsourcing only because of lower salaries. Nike has been accused of working with factories that practice forced labor and human trafficking (“Nike statement,” 2019). The company is allegedly working on improving labor conditions and increasing wages (“Nike statement,” 2019). However, such statements cannot be proven yet, making multinational companies promoters of stratification (Fehl & Freistein, 2020). Organizations need to reconsider their impact on growing inequality between nations.
Global Stratification and the United States
Global stratification impacts the United States in numerous ways, both positively and negatively. On the favorable side, the citizens of the United States can enjoy products at a lower price than they would have been if companies decided to manufacture within the country’s borders (Adorno, 2015). Higher taxes and market wages would force organizations to increase the costs of their goods. Unfavorable impacts, however, may cause individuals to reconsider their opinion of outsourcing. Firstly, it means fewer jobs in the United States because companies are not interested in hiring more expensive staff for the same kind of work that can be done for cheaper elsewhere (Adorno, 2015). Secondly, the quality of products would not be the same because of the impossibility of having total control over the quality assurance process. Lastly, global stratification impacts the domestic one – as corporations become richer because of practicing outsourcing and paying less in taxes, the difference between the wealthiest and the poorest in the United States will increase. The big “winners” in this situation are the companies themselves because they can produce for less while maintaining high-profit margins.
Global stratification is the inequality between nations in terms of economics and societal well-being. This difference has been increasing with the advent of globalization and outsourcing. Multinational companies can generate more profit by decreasing the costs of production by making it in low-income countries. While Americans can enjoy low prices on goods, a decrease in the number of jobs can harm a national scale. Also, fewer taxes by companies would mean that the government spends less on social welfare programs. The only winners in this context are companies that practice outsourcing.
Adorno, T. W. (2015). Introduction to sociology. John Wiley & Sons.
Fehl, C., & Freistein, K. (2020). Organising global stratification: How international organisations (re)produce inequalities in international society. Global Society, 34(3), 285-303. Web.
Nike statement on forced labor. (2019). Nike. Web.