The main economic advantage of labour standards is that they force enterprises to find more constructive outlets for a desirable competitive force which directs efforts towards more product innovation, improvement in the production process and better marketing strategies. Despite the striking economic progress in the Asia and Pacific region, for example, which is likely to continue well into the 21st Century, it has been made without due attention to the deterioration of the environment, poverty, inequity in profit sharing and inequality in employment opportunities. Today there are serious problems of environmental degradation caused by air and water pollution, hazardous wastes, forest depletion, global warming and so on. This is the price which as been paid for the progress achieved so far. At the same time, no enterprise engages in business activities without expecting profit.
Profitability is essential in the business operations of any enterprise.
But it should be coupled with corporate social responsibility shared by top management and labour and also by consumers as end-users of the goods and services the enterprise provides. Business activities of the enterprise must also be geared to contribute to balanced socio-cultural and economic development, not only at the national but also at the global level. Priority areas for productivity improvement may change from time to time, but in the long-term there should be a constant search for a better quality of life for all. But their social responsibility is also local, because corporate culture has its roots in the country of origin. The process of restructuring of traditional companies through the outsourcing of non-core business and automatization of production and service process on the one hand, and internationalization of production through globalization, networking alliances and franchising on the other, all have a dramatic effect in increasing productivity globally, while at the same time reducing employment in one country and moving it, not necessarily in the same quantity, to another country, where social standards may be much lower.