Question

Read these two scenarios, and then answer the question that follows.
Scenario 1
Sam has worked for a furniture company for 20 years. He’s one of the best employees, and he often trains new employees. Last week, Sam’s manager informed him that in three months he will no longer have a job because the company is moving its furniture manufacturing to Thailand.
Scenario 2
Angela and her husband recently bought a new home. They’re excited to purchase new furniture for their house. After spending the weekend shopping, they’re thrilled to be able to buy furniture for the entire house for less money than they anticipated. Their new furniture is fashionable, fits the house well, and was manufactured in Thailand.

How might Sam’s and Angela’s attitudes differ about companies moving operations abroad?

Answer 1

The shipment and logistics cost for a company to be established in overseas is a risk and costly too. The political scenario in which the company is going to get established must also be taken into account as political policies may interfere with the industrial policies of the company. The wages of labor can be high for the company that is planning to move overseas.

Currency rate fluctuations and the inflation rate may influence the demand of the product. Sam may feel frustrated as he would not be getting paid in a regular basis because the company is forced to spend more expenditure in setting up the industry.

Angela may have to face the heat of high price of the Furniture because the Furniture Company would aim to balance its cost and expenses by fixing high price to the product.

Answer 2

Answer:

Sam will most likely be against companies moving operations abroad because it means a loss of jobs within the country. Angela, on the other hand, might support such a move if it means cheaper goods for consumers.