Is it right for a business to relocate just to benefit from lower wage levels in that country?
...mpetitive advantage in another way. New machinery may increase the quality of the product and productivity. Fewer workers may then be needed so the business will have less workers at a less wage value, reducing costs again. Before relocating, the business will have to look at whether the workers they hope to employ have the same skills as their workers in Britain. Having lower wages may indicate that the workers are less skilled and so costs will rise as a result of having to train these workers. With the extra costs of training, in the short term, I think this may hide any benefits that relocation has had on the business financially. Once workers have been trained I think costs should then fall. The reputation of the business may be affected badly by the relocation. The job losses in Britain may show future employees that the business does not care about its workforce and are more concerned with money. This could affect whether or not people apply for the job. However, if the business is moving to an area with high unemployment I do not think people will be too concerned about the reputation of the business. Regulations in this new country may be different to that the business is used to. For example, laws about working conditions, pay and working hours may be different. Depending on these laws it may have a positive or negative affect on the business. The regulations may incur extra costs for the business as they are stricter than in Britain. However these regulations may not be strict. So allowing the business to make employees work longer hours for example. This may increase productivity. However, workers will get tired and motivation may be lost. The business may wish to use the less strict regulations as an advantage to them but taking this up may depend on the ethics and culture of the busines...