The prevalence of global competition has resulted in the vast opportunities for vendors to incorporate mergers and acquisition. It has resulted in the formation of suppliers that are able to meet the global challenges by means of their volume of supply and efficiency. It has also resulted in the increased buying power of suppliers due to their consolidation and they are considered as a significant entity in the value chain of a company. The consolidation of vendors has decreased the bargaining power of the company because the vendors have become competitive and efficient, and they have also become able to meet the demand of the company. In this manner, the company has to consider them as their strategic partners and have to incorporate the agreements that benefit both entities (Arndt, 2004).
The labor conflicts are necessary to be addressed and settled in an effective manner because their prevalence can hinder the organization’s productivity. The organization cannot meet its productive targets in a given period of time and hence, the organization can also not provide the required products and services to its customers in an effective manner. The labor conflicts can cause disruptions in the team work, which can also effect the team efficiency. The labors will not incorporate the adequate extent of work engagement or organizational citizenship behavior due to the prevalence of conflicts which will result in the deteriorated organizational performance (Arndt, 2004).
When a business shifts its production processes to a low-cost country, then the cost of production reduces and the company can enjoy higher profits. It can provide access to the labor that possess low bargaining power and hence, the company can enjoy high organizational performance due to the efficiency and effectiveness of labor. It will increase the per unit profit for the company due to the low cost of production and the company can incorporate per volume or per unit profits in an effective manner (Arndt, 2004).
References
Arndt, H. (2004). Supply Chain Management. Gabler Verlag Springer Fachmedien Wiesbaden GmbH, Wiesbaden.
