BUS FPX 3040 Assessment 6 Labor Relations Recommendations

BUS FPX 3040 Assessment 6 Labor Relations Recommendations

Student Name

Capella University

BUS-FPX3040 Fundamentals of Human Resource Management

Prof. Name:

Date

American Apparel Manufacturing Overview

American Apparel produces its entire range of products domestically. While the company operates numerous stores worldwide, all manufacturing processes are conducted within the United States (American Apparel, 2018). This paper will evaluate three specific countries—Turkey, Belgium, and South Korea (Republic of Korea)—in terms of work hours, wages, unemployment rates, and their overall business viability. The analysis will explore how these factors could support American Apparel in expanding its manufacturing capabilities. The selected countries were chosen based on their potential economic impact, labor conditions, and cost-effectiveness.

Data Comparison

When making informed decisions regarding global operations, it is essential to analyze and collect relevant data. Such information provides valuable insights into each region’s potential for establishing manufacturing facilities. The labor relations of Turkey, Belgium, and South Korea are summarized in the table below, alongside comparative data from the United States. This analysis includes weekly working hours, projected wage increases, monthly wages, hourly labor costs, employment rates, and unemployment rates. These factors play a crucial role in assessing whether a country is a financially viable option for American Apparel, particularly concerning wages and working hours. Understanding employment status, unemployment rates, hourly labor costs, and labor force participation will significantly aid in evaluating the labor availability and competitive landscape in these nations. The data presented will help determine the potential economic impact of establishing a new manufacturing facility in each country and assess the adequacy of the available workforce.

Labor Relations Summary

(International Labour Organization, 2018)

Recommended Country

Based on the data provided by the International Labour Organization, Turkey appears to offer the most favorable conditions for American Apparel. While each country has unique advantages, Turkey’s proximity to many of American Apparel’s existing locations in Western Europe is noteworthy (American Apparel, 2018). Turkey demonstrates lower wage rates, higher unemployment rates, and longer working hours, with an average of 47 hours per week—10 more than in the U.S. Turkish workers earn approximately $1,010 monthly, significantly less than the U.S. average of $4,417. The lower hourly labor costs in Turkey compared to Belgium, South Korea, and the U.S. highlight its potential for cost-effective manufacturing. While Belgium and South Korea also present opportunities, their higher labor costs and employment levels make Turkey the most appealing option. Turkey ranks among the world’s top developing countries, with the seventeenth-largest nominal Gross Domestic Product (GDP) globally. The nation is a leading producer of agricultural products, textiles, consumer electronics, and household appliances.

How Overseas Labor Solutions Meet Organizational Needs

Overseas labor solutions address organizational needs by providing a workforce with the skills necessary for production, marketing, and service delivery (Schniederjans, 2015). Companies can also benefit from significant savings on business taxes by operating in countries with favorable tax environments. For instance, Turkey has reduced corporate tax rates from 30% to 20%, which could result in substantial revenue savings for American Apparel. The strategic location of Turkey serves as a bridge between the East-West and North-South axes, facilitating access to major markets. This positioning could greatly benefit American Apparel, as the company has existing retail stores in countries like Israel, Italy, and Slovenia.

Human Resource Strategies to Address Business Needs

Multinational corporations must navigate various compliance requirements, which can be complex (Schniederjans, 2015). For American Apparel, the Human Resources (HR) team must conduct thorough background checks on institutions and personnel to ensure they meet the company’s operational standards. Furthermore, HR needs to establish efficient communication channels with subcontractors to facilitate a smooth transition during expansion. To succeed in the global marketplace, American Apparel’s HR must be well-versed in compliance issues related to subcontracting and outsourcing. If shortcomings in HR management are identified, the company must take steps to enhance its HR practices in preparation for international growth.

Recommendations for Management Decision-Making

Prior to making significant decisions, it is crucial for American Apparel to conduct comprehensive research on potential manufacturing sites. Key aspects to investigate include the facility’s quality control processes, compliance with governmental standards, labor conditions, and supply chain practices (Schniederjans, 2015). Additionally, a representative from the company should physically visit the facility to verify that it meets all contractual requirements.

Additional Information Needed

For each new global manufacturing location, American Apparel must collect pertinent data before finalizing decisions. Critical factors to consider include freight costs, available materials, political stability, taxes, and local sentiments towards the new facility. Given the varying openness of countries to international trade, it is imperative for American Apparel to thoroughly understand and evaluate all relevant elements before making any decisions regarding new operations (Schniederjans, 2015).

Conclusion

In conclusion, the analysis of Turkey, Belgium, and South Korea—summarized in a data table provided by the International Labour Organization—indicates that Turkey is the most suitable candidate for American Apparel’s new manufacturing site. Its strategic location, favorable economic conditions, and existing retail presence make Turkey an attractive option for expansion.

References

American Apparel. (2018). Retrieved from https://www.americanapparel.net

International Labour Organization. (2018). Retrieved from http://www.ilo.org

Schniederjans, M. J., Schniederjans, A. M., & Schniederjans, D. G. (2015). Outsourcing and insourcing in an international context. Routledge.

BUS FPX 3040 Assessment 6 Labor Relations Recommendations

SHRM. (2017). Introduction to the global human resources discipline. Retrieved from https://www.shrm.org/resourcesandtools/tools-andsamples/toolkits/pages/introglobalhr.aspx

The World Factbook. (2018). Retrieved from cia.gov