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15 July, 15:38

Paragon Corp., based in Ohio, sources goods from Southeast Asia to take advantage of labor cost savings. This company is benefiting from?

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  1. 15 July, 15:46
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    Globalization of production.

    Explanation:

    In this example, it can be seen that the company is outsourcing its production to other parts of the world, like Southeast Asia. This is possible due to the development of technology, availability of resources in these parts and due to underdevelopment of this region, which results in the cheap labor cost. In this way company saves huge amount of money. Also, the cost of transporation is also cheap, due to the deregulation laws of trading and removing barriers like the customs and borders. All of this is possible because of the globalization which changes the way nations cooperate and trade goods and services. In Southeast Asia it provides employment and investments, while in the US it saves costs of production.
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