TOPIC #4

1. TOPIC #4 Benefits and Costs of International Business

2. Benefits and Costs of International Trade Benefits to Society and Consumers: • Availability of products and services unavailable in your own country • Broader range of prices offered (cheaper to purchase various goods) • Job creation • Political Benefits – “countries that trade with one another seldom go to war with each other.” • Opens up communication lines with people, improves mutual understanding, and increases the level of respect people from different countries have for one another.

3. Costs of International Trade The hidden or social costs of international business engaging in offshore outsourcing: • Human rights and labour abuses • Environmental degradation

4. Offshore Outsourcing • Also known as “contracting out.” • The practice of hiring individuals from countries where labour costs are lower to complete some or all of the steps in the production process. Example: • Many companies use call centres in India, China and Costa Rica for customer service and IT customer service.

5. Advantages Lower costs to company which can focus on tasks it does better Be closer to natural resources needed Proximity to more efficient technologies Increase profits from lower labour costs, another country’s innovations, and different tax structure Offshore Outsourcing

6. Human Rights Issues and Labour Abuses Typical abuses in poor countries include: • Physical abuse • Sexual abuse • Forced confinement • Non-payment of wages • Denial of food and health care • Excessive working hours with no rest • Child labour

7. Human Rights Issues and Labour Abuses Child Labour defined: • Regular employment for boys and girls under the age of 16 • Many countries ignore abuses that target children and women.

8. What can be done to stop Child Labour and Human Rights Abuses? International Labour Organization (ILO) United Nations (UN) specialized agency that seeks the promotion of social justice and human and labour rights that are accepted by all countries. Other?

9. Environmental Degradation • Occurs when nature’s own resources such as trees, habitat, earth, water, and air are being used up (consumed) faster than nature can replenish them.

10. Sustainable Development The process of developing land, cities, businesses, and communities that meet the needs of the present without compromising the ability of future generations to meet their own needs. Businesses need to be looking to provide sustainable business practices.

11. Examples of Sustainable Business Practices