Abstract
Manufacturing companies worry that producing in high labour-cost countries can not be sustained and are considering moving manufacturing to low labour-cost regions. Manufacturers that are considering this approach should be aware that moving to low-labour cost countries does not always lead to cost reductions. Cost increases may occur as a result of productivity differences. One of the causes for these productivity differences is national culture. This paper's analysis leads to the conclusion that national culture affects the method of organising and this in turn affects labour productivity. Countries may have a cultural competitive advantage to conduct specific types of activities.
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