Your company intends to locate a plant in Mexico to manufacture tires for sale in both Mexico and the United States.

Your company intends to locate a plant in Mexico to manufacture tires for sale in both Mexico and the United States. If the plant were in the United States, the laws would require expensive safeguards to protect the health and safety of U.S. workers, as well as the added cost of minimum wage rules, social security contributions, health insurance, retirement benefits, and other employee benefits. Assume that Mexican law is not so strict, wages and operating costs are less, and that benefit programs are either nonexistent or far less costly. To what extent should you conform to the legal standards applicable in the United States? Should you comply with American labor rules and environmental rules, even though they are not enforceable in Mexico? After all, should not all workers be safe from harm? Does not polluted air in Mexico travel to the United States? Do you think that any firm operating in a host country should carry with it the ethical codes of its home country? What about competition from firms in Japan or Germany who are operating their plants in Mexico? If they don’t comply with American labor and environmental standards in Mexico, how will you compete with them? How does the international manager justify decisions in cross-cultural situations?

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