Treatment of employees in a global marketplace

I would like to have your point of view on this problem. There is no right or wrong answer and I know that people will answer differently. I myself am leaning towards Chan's argument. Please let me know what you think, and please defend your answer. You can choose to agree with Cheung!!! It would be interesting to see what others think and how the argument can be defended. A clear written explanation is enough, but feel free to use graphs, numerical examples, or anything else to strengthen your argument.

Two Hong Kong businessmen, Chan and Cheung, are having an argument.

Chan makes the following statement:

"The business world has become more competitive. If we are to compete with firms in Singapore, Indonesia, and Malaysia, we must keep our costs down. Labor accounts for 75% of our costs. We cannot afford to compete if we keep paying such high wages to our workers. I think that we need to go for cheaper labor to make it in this business."

Cheung replies:

"In today's world, quality is everything. It is impossible to produce good products without good people. I go for the best workers, irrespective of cost. It is false economy to try to save money on labor. If we go for the cheapest workers who have not yet been trained up to Hong Kong Standards, we will suffer."

Both statements are extreme. Which is closest to being right and why? Defend your answer.

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