Ethics in OutsourcingResearch Paper

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[. . .] The only saving grace, so to speak, for the virtue question is that the practice is so pervasive due to companies basically having to do it due to wanting to remain competitive. For example, Target, Kohl's and other retails pretty much have to do it because Wal-Mart is doing it. However, that is a shallow point because the subject of virtue is not about popularity. However, it can absolutely differ based on perception and opinion. Some people say that the cheaper goods are the greater good while others refuse to look past the ancillary and other effects. While it may be a non-starter from a dollars, cents and competitive standpoint to not do outsourcing, this does not make it right. Further, some firms have actively bucked the trend of outsourcing because "everyone else is doing it" on ethical grounds. Sure, they end up spending more in most cases. However, if they openly tout that they are trying to do the right thing, there are those that will "vote with their wallet" and will gladly pay the higher price. This is a sterling and specific example of corporate social responsibility efforts actually improving the bottom line rather than being a drain on it (Jos, Hartman & Fontrodona, 2012).

The answer to the rights test is even less ambiguous than the virtue test. Some people will even argue what a "right" is in the modern context. For example, while healthcare is deemed as a right by people in United States and by many other pundits and politicians around the world and/or with international organizations, some would disagree and suggest that people should pay their own way if they can. However, when it comes to dirt-poor people in foreign countries where economic and/or monetary opportunity is little to none, it makes a lot of sense why power-brokers and politicians in those areas pay their people scraps while they take money hand over fist from American companies. However, there are foreign outsourcing situations like the customer service personnel that are seemingly paid pretty decently. In short, the human rights test is a flat failure unless the people in these other countries are being paid at least what the locals in that area make and the factory or site is safely run and ethical operated. Questions of whether those sites conform to American standards are almost always going to fail because comparing America to these other countries is apples and oranges in a lot of ways. However, there are minimum standards that should prevail in all countries. The tendency of many people to use the same exact yardstick when comparing the United States and other countries is not reasonable or fair. It would be like comparing twenty American dollars in 1970 to twenty dollars now. Twenty dollars in 1970 America was a decent amount of money. However, the dollar has lost value over the years in that it takes more money (in terms of dollars and cents) to have the same purchasing power. For example, bemoaning that Chinese people do not make $7.25 an hour (the United States federal minimum wage) sort of ignore the fact that the wage and hour law situation in China not to mention the prevailing pay rates in general are entirely different and a lot of that has to do with cultural differences. Indeed, China is in the East and the United States is in the West. The East and West are entirely different in more than one way (Wettstein, 2012).

When it comes to the justice test, the answer to that question would, at least in the view of the author of this report, whether there is a balance between offering cost-effective goods and services to Americans without running roughshod over the rights and opportunities of the people in the foreign factories and facilities. Indeed, if Apple (just to use a random example) were making iPods in a country and the factor paid wages that exceeded the local standard and the factory was run to OSHA-level standards, then this could absolutely pass the justice test. Even better would be to what they have been doing more as of late and that is having their items made here in the United States. Per the justice test, there has to be a balance of burdens and benefits. Keeping costs down for penny-pinching consumers and families is not a bad thing. However, doing so at the expense of this country's soul is something that cannot be permitted (Frost & Burnett, 2007).

As for the stand that the author of this report wishes to take, it would be as follows. First, to suggest that outsourcing could or will go away is a non-starter. It is not going to happen so the author of this report will remain grounded in what could be rather than utopian presumptions. Further, there are many jobs in this country that many Americans refuse to do such as working in fields, very simple manufacturing and so forth. As noted before, there are a lot of manufacturing jobs in this country but so many of them require high-end skills that are just not present in a lot of young people. The stand the author will take is that outsourcing should be allowed but it should be cracked down on and punished for when it is clear that an outsourcing American company is using a vendor or company that is treating their workers like slaves. While this can be hard to pin down when the facilities in question are not domestic, it should be a condition of doing outsourcing that there be an option to inspect the factory or facility if there are any questions as to whether it is safe and equitable for the workers (not to mention the consumers in the United States) that are there. Assuming the worst for all outsourcing is not fair but neither is turning a blind eye, as mentioned in the abstract.

Conclusion

As noted in the analysis, to suggest any solutions that end outsourcing in the United States is a non-starter. Indeed, just as the United States shifted from an agrarian to an industrial economy in the 1800's, it is now shifting to a knowledge sector and service economy today. There will be no rolling that back and the potential benefits for less developed countries making goods so as to effectuate a lower price point in the United States actually has some good in it. However, people should have more opportunity to buy American if they wish and the outsourcing factories and facilities used must adhere to proper standards and outcomes if they are to do business with this country.

References

Benkovskis, K., & Worz, J. (2014). "Made in China" - How Does it Affect Measures of Competitiveness?. Working Papers (Oesterreichische Nationalbank), (193), 1-37.

Frost, S., & Burnett, M. (2007). Case study: the Apple iPod in China. Corporate Social

Responsibility & Environmental Management, 14(2), 103-113.

doi:10.1002/csr.146

Jayaraman, V., Narayanan, S., Luo, Y., & Swaminathan, J.M. (2013). Offshoring

Business Process Services and Governance Control Mechanisms: An

Examination of Service Providers from India. Production & Operations

Management, 22(2), 314-334. doi:10.1111/j.1937-5956.2011.01314.x

Jones, T.M., & Felps, W. (2013). Stakeholder Happiness Enhancement: A Neo-

Utilitarian Objective for the Modern Corporation. Business Ethics

Quarterly, 23(3), 349-379. doi:10.5840/beq201323325

Jos G. Sison, A., Hartman, E.M., & Fontrodona, J. (2012). Guest Editors' Introduction

Reviving Tradition: Virtue and the Common Good in Business and Management. Business Ethics Quarterly, 22(2), 207-210.

doi:10.5840/beq201222217

Wettstein, F. (2012). CSR and the Debate on Business and Human Rights: Bridging the Great… [END OF PREVIEW]

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