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An Australian chemical manufacturer has decided to relocate its production plant to a developing country to take advantage of regulatory differences - HSC - SSCE Business Studies - Question 22 - 2005 - Paper 1
Question 22
An Australian chemical manufacturer has decided to relocate its production plant to a developing country to take advantage of regulatory differences. (a) Identify O... show full transcript
Worked Solution & Example Answer:An Australian chemical manufacturer has decided to relocate its production plant to a developing country to take advantage of regulatory differences - HSC - SSCE Business Studies - Question 22 - 2005 - Paper 1
Step 1
Identify ONE advantage to the manufacturer of relocating its production plant.
Answer
One significant advantage to the manufacturer of relocating its production plant is the potential for lower production costs. By moving to a developing country, the manufacturer can benefit from reduced labor costs, increased efficiency in operations, and access to cheaper raw materials. This can lead to higher profit margins and a greater competitive edge in the market.
Step 2
Identify TWO stakeholders affected by the relocation, and describe an ecological conflict of interest that may arise between these stakeholders.
Answer
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Local Community: The local community is impacted by the relocation, as they may experience job creation or destruction depending on the factory's operations.
- Ecological Conflict: If the community prioritizes environmental conservation and the manufacturer seeks to maximize profits by minimizing environmental protection measures, this could lead to pollution.
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Environmental Organizations: Groups focused on environmental conservation are stakeholders that aim to protect ecosystems and promote sustainable practices.
- Ecological Conflict: While the manufacturer may wish to exploit local resources for profit, environmental organizations may oppose practices that harm local habitats, creating conflict over resource use and environmental degradation.