The Ethics of OutsourcingResearch Proposal

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¶ … hone a specific research topic that involves global business and the environment that it operates in. While several intriguing topics come to mind, the author of this proposal has decided to focus on the ethics of outsourcing in terms of the conditions, compensation and other relevant factors. Indeed, it is pervasive and common for companies to have work done in foreign countries so as to save money and thus pad profits and margins or at least stay competitive in their marketplace. Companies in the retail and even more basic customer service sectors have been doing this for years and this has led to things like manufacturing declines in the United States and other areas of the world for a while now. As part of the completion of this report, the author will identify at least three major points of comparison when it comes to outsourcing, explain the nature of the global context when it comes to the subject, the defense of one Western ethical theory when it comes to this subject, the defense of a non-Western theory when it comes to the same and then an explanation of the theoretical frameworks that will be employed and used. Finally, there will be a justification of the rationale as to why this ethical dilemma is and should be significant to scholars and practitioners. While outsourcing is indeed needed for many firms to simply remain competitive in today's marketplace, some of the human costs in the countries involved are astonishingly high and severe.

Questions Answered

When it comes to Western ethics and opinions about how best to handle outsourcing or whether to do it in the first place, the essential question is where to follow the Milton Friedman approach which dictates that the primary and overarching goal and requirement of any business is to maximize profit and shareholder value (Ashford, 2010). However, to suggest the Western ethical paradigm is monolithic in this regard is very far from being the case. Indeed, there are many that suggest that workers should be paid a "living" or at least a prevailing wage irrespective of the country they are operating in. There are those that suggest that the responsibility for factory conditions and safety of workers falls on the outsourcing business operating in the United States even if the factory is not owned by the American company. However, the author of this report will defend the former rather than the latter. One could use Wal-Mart as a test case. A staggering amount of goods that Wal-Mart sells in its stores come from countries like China, Japan and so forth. China in particular is a major hub of import for them and the company actually has a dedicated business office and operation in China so as to streamline and perfect the flow of goods from that area to the United States and other areas where Wal-Mart has stores. Wal-Mart uses its insane leverage and buying power to negotiate and execute deals that are advantageous to them. The sheer amount of goods they have the ability to buy in a given time period alone is a boon to them when it comes to negotiations with firms selling their wares. This in turn allows them to have lower prices than many to most other outlets without butchering their profit margins (Tsoi, 2010).

When it comes to Eastern ethics, the paradigm that exists in that part of the word is not entirely monolithic either but is much closer to being precisely that. To put it concisely, the Eastern nations are much more focused on the dollars and cents of things rather than the ethical implications of what they are doing. This is not to say that Eastern businesses are soulless and care not for the outcomes of their workers. Instead, they are must primarily focused on the bottom line and how well the job is done from their perspective and it is very hard to pull them away from that tract. In other words, the Eastern business climate is much more in line with the Friedman perspective than it is to the concerns for conditions of factories and the attitudes of the workers. One might think that this trickles down to the workers but that is simply not the case. There are squabbles aplenty in the East when it comes to unionization, pay levels, benefits, who gets hired and why and so forth. One major difference between the East and the West is that the Eastern businesses are able to suppress and fight back against employee uprisings because the overall ethical climate in the countries at large are much more tilted in their direction or, at the very least, the laws and rules the businesses must follow are not nearly as strict and suppressive to those activities. At the same time, the governments of the East are not always as powerful and omnipresent (with China being a major exception) when it comes to the emergence of violence and being in areas of non-powerful governments and war can lead to factory shutdowns and other negative consequences that are rarely if ever seen in the West. Even so, the author of this report would defend this Eastern ideology as the ultimate reason a business exists is to make a profit. It is not a social program or a way to give employees something they would not otherwise get in their country. The last sentence would be akin to giving fast food workers in the United States the $15 an hour they have been asking for but disregarding other fields, some of them very important, that do not make that much either. Just as one example, there are many medical professionals in the United States that do not make $15 an hour. Sometimes, it is not even close (Tsoi, 2010; "Fight for $15," 2015).

The author of this report would add a caveat that the Eastern businesses should not take the profit motive as an incentive and green light to do whatever they want. They should indeed pay at least the prevailing wage of an area and the conditions of the factory must be such so that the loss of life or maiming of workers is not too much of a possibility. Otherwise, asking a business to operate outside of the norms and common rules of their paradigm is not really reasonable. For example, asking for Wal-Mart to stem the tide of the importation of Chinese goods without asking other retailers like Target, Kohl's and others to do the same would be exceedingly unfair. To suggest that Wal-Mart is the only one doing it is patently false. The vast majority of all clothes at all retailers in the United States, just to use one example, are made by people in the East and they are paid a pittance compared to what workers in Western nations make. It would be up to the United States government to change that through laws and regulations. However, they would want to act carefully because doing so would absolutely drive up prices paid by West customers just like driving up fast food wages to $15 would do the same. In either event, the costs of the employers are driven up in a major way and this almost always translates to higher prices paid by the consumers (Matusitz & Leanza, 2009).

Such changes and progressions would do the same thing in the East. Ultimately, the government needs to set the ultimate and complete standard because if a rule applies to one business or type of business, it should generally apply to them all unless there is a very good reason why not. To use Eastern businesses as an example, telling the South Korean carmaker Hyundai that they must change their processes and not doing the same for others would be unfair. South Korea could change the rules and laws but these changes should apply across the board to all Korean carmakers. It would be nice if businesses could spearhead change on their own. However, doing so usually leads to a loss of edge when it comes to competing in their market and many business are unwilling (or unable) to do so. In short, so long as a business (West or East) is operating within the laws and regulations of their respective markets, the rest of the discussion, about ethics or not, comes down to opinion and choice. Just because an employee does not like the conditions or pay he is receiving does not mean the laws are wrong. As long as he is getting the minimum mandatory amounts required by law, the employee really has no standing to do much about it short of joining a unionization effort but that can be a choice that has lasting consequences depending on the situation, the country and the laws of said country (Rhee, Woo & Cho, 2014).

The theoretical framework that shall be created and employed for this study is what could be and should be the minimum ethical standard… [END OF PREVIEW]

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