Ashley Brett HigginbothamAccounting 2102 – Financial AccountingSection 101 Spring Semester 2014Manufacturing in Bangladesh: The Nike ControversyAmerican companies producing at lower costs in foreign companies is not a new practice. Companies have been using foreign factories to produce goods for years, mainly due to lower production costs. Not only are labor and material costs less expensive, but foreign countries often don't have labor laws as strict as those enforced in America. They also have no sense of responsibility towards the community. Companies can enter remote areas of another country and provide substandard wages and working conditions to disadvantaged workers who typically don't have many job opportunities. In these cases, no local regulation is usually enforced, and global companies like Nike can take advantage of penniless workers by increasing their profits. An article recently published in the Wall Street Journal focused on the effects of manufacturing Nike products overseas, specifically in Bangladesh. The focus of the article was how Nike was attempting to achieve the lowest possible manufacturing costs while maintaining worker safety and producing high-quality products. Both the consequences and advantages of manufacturing in foreign companies were discussed in the article. In addition to how production costs affect the company's financial prospects, the article addresses the impact that having factories in less developed countries has on public opinion of Nike. Manufacturing in foreign countries typically means lower production costs resulting in higher profit margins. Nike operates manufacturing plants around the world, with most of its clothing and shoes... middle of paper... working environments for factory employees. Although international groups and organizations keep constant watch on companies that outsource work to poor countries, little can often be done to monitor these companies. Lack of local enforcement and neglect of international law make it easy for cash-hungry companies to get away with morally wrong behavior. By bringing attention to these types of situations and not supporting companies that don't treat their employees fairly, executives will get hit where it hurts them most, their pockets. When their profits decline, they will be forced to look for alternatives to manufacture their products. WORKS CITED Banjo, Shelly. “Inside Nike's Struggle to Balance Costs and Worker Safety in Bangladesh.” TheWall Street Journal April 21, 2014. Web. April 22 2014.