1.3 Activity 1
Before you read on, I would like you to dwell for just a moment on the significance of this shift from direct investment by Western firms to the establishment of subcontracting ties with overseas partners. Aside from outside firms being able to pass on to the subcontractor the economic risk of supplying a particular good, this relatively new global arrangement made it easier for firms to change subcontractor should they fail to meet their production demands and prices.
How, then, would you begin to draw up the lines of responsibility for, say, the production of a pair of sports trainers in a small independent factory in Thailand contracted to a global ‘brand’ name such as Nike? Is Nike ultimately responsible? Is it solely down to the factory owner? Read the next subsection before you make up your mind.