Ashley Brett HigginbothamAccounting 2102 -- Financial AccountingSection 101 Spring Semester 2014Manufacturing in Bangladesh: The Nike ControversyU.S. companies manufacturing cheaply in foreign firms is not a new practice. Companies have used overseas factories to produce goods for years, mainly because of lower manufacturing costs. Not only are labor and material costs cheaper, but foreign countries often don't have labor laws as strict as those in the United States. They also lack a sense of responsibility towards the community. Companies can locate in a remote region of another country and offer substandard wages and working conditions to disadvantaged workers who typically do not have many work opportunities. In such cases, no local regulations are usually enforced and global companies like Nike can take advantage of impecunious workers while increasing their profits. A recent article published in the Wall Street Journal focused on the effects of manufacturing Nike products overseas, particularly in Bangladesh. The focus of the article was how Nike attempted to achieve the lowest possible manufacturing costs while maintaining worker safety and producing high-quality products. The consequences and benefits of manufacturing in foreign companies have been discussed in the article. In addition to how manufacturing costs affect the company's financial outlook, the article discusses how having factories in less developed countries impacts public opinion of Nike. Manufacturing in foreign countries generally means lower production costs, which translates into higher profit margins. Nike operates manufacturing plants around the world, with most of their clothing and footwear...... middle of paper ......work environments for their factory employees. Although international groups and organizations continually monitor companies that outsource their work to poor countries, there is often little that can be done to control these companies. The lack of local enforcement and neglect of international law makes it easy for money-hungry companies to engage in morally reprehensible behavior. By calling attention to these types of situations and not supporting companies that don't treat their workers fairly, executives will be hit where it hurts the most, in their pockets. When their profits decrease, they will be forced to look for alternatives to produce their products.WORKS CITEDBanjo, Shelly. “Inside Nike's struggle to balance costs and worker safety in Bangladesh. » TheWall Street Journal April 21, 2014. Web. April 22 2014.