Ethics of Outsourcing
What is ethics and how is it related to today's world of business? Merriam-Webster's Online Dictionary defines ethics as "the discipline dealing with what is good and bad with moral duty and obligation." In today's globalized society, it seems as though monetary profits are valued higher than making ethical decisions. Outsourcing has become an unavoidable result of globalization. From General Motors to IBM, we can experience the effect of outsourcing in many different sectors of our lives. Outsourcing has brought many economic advantages, and it has greatly enhanced productivity and growth of industries across countries. However, despite such benefits, outsourcing also generated a variety of social, political, economic and cultural issues for the outsourcing receivers and the outsourcing providers. The consequences of outsourcing experienced in America are considered to be unethical as it damages local labor market, and offers hardly any practical solution to address the unemployment issues.
Outsourcing raises an ethical issue, as so many blue collar workers, as well as well-educated white collar workers in the US have lost their jobs due to outsourcing. Especially, many who work in the field of technologically advanced services and software were exchanged for the workers in poorer countries for cheaper labor costs. Many of the multinational companies moved their manufacturing sectors to Mexico, China, or India. According to the article, "The Battle Over Outsourcing" (2004) by Bob Davis, et al. illustrates that many of the software programming work has been relocated to India over the years. Offshore outsourcing started with low-income jobs such as call center operators, and spread to high-paid computer ...
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...sourcing because such a phenomenon will certainly occur in the advent of globalization. The more important discussion is with regards to what policies the government can implement to safeguard the livelihood of its citizens.
References:
Bulkeley, W. (2004, March). New IBM Jobs Can Mean Fewer Jobs Elsewhere. The Wall Street Journal, B1.
Davis, B, et al. (2004, April). The Battle Over Outsourcing. The Wall Street Journal, E1-4.
Maynard, M. and Bunkley, N. (2007, September). G.M. Workers Begin Walkout Over Contract Impasse. The New York Times, B1-3.
Merriam-Webster Online. 2006-2007 Merriam- Webster, Incorporated. From http://www.merriam-webster.com/dictionary/ethics
The Worker Adjustment and Retraining Notification Act (WARN). Retrieved November 26, 2007 from http://www.dol.gov/compliance/laws/comp-warn.htm
http://www.doleta.gov/layoff/employers.cfm
...hored, individuals, families, and communities suffer the negative economic consequences due to limited job availability. Most people who work in these industry sectors are blue collars, who are not professional or academically qualified to work in other fields, as a result their job choices are limited, especially when the main industry in that community is to work in the stage of manufacturing. When there is massive unemployment within a single community the loss of manufacturing jobs can threaten consumers, creating other problems in the society that result in economic costs. Such problems may spiral into the loss of one's car or home, personal debt, and the lack of economical means to afford a child's education, thus continuing the cycle of economic poverty. These aforementioned consequences are indirect and important economic effects of offshoring American jobs.
In the article Your Local News, Barbara Ehrenreich provides her personal and professional insights into outsourcing, starting with a newspaper in California that has begun outsourcing the writing of even some of its local stories. In the article The Rise of the Rest, Fareed Zakaria looks back on history to see how we arrived at globalizing and he examines the present through myriad examples and data to then consider the globalized future with “the rise of the rest.” Zakaria’s article better helps understand Ehrenreich’s insight about outsourcing. With the help of Zakaria we better understand Ehrenreich’s outlook of outsourcing.
Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.
As the problem of job outsourcing becomes more of an issue in politics, elected officials like the President and Congress will no longer be able to ignore the dilemma. The war in Iraq has been at the forefront of the presidential race but the importance of outsourcing American jobs seems to have been slightly overshadowed. If the issue of outsourcing is not watched carefully and a definitive plan hammered out, a trickling down of negative effects may occur within the U.S. economy. However, there is a polarized opinion on the effects of this “phenomenon”.
Ethics shapes our attitudes towards the world, other people, and cultures and how we process right from wrong. I would love to believe that the world is made up of individuals that have a high level of integrity and pure ethical fibers; however, this is not the world in which we live in. Ethics or rather morals entail mechanisms that defend, systematize as well as recommended conceptions of right or wrong, good and bad. Interestingly, organizations have to develop ethical codes to ensure employees and employers understand the difference in doing right or wrong. It is no secret that ethics are an essential aspect of successfully running any organization or government, yet, countless corporations grow precipitously on unethical practices. Ethics
Kibbe, C. (2004, 07 09). Outsourcing: the good, the bad and the inevitable. New Hampshire Business Review, pp. 1A-21A.
Business ethics simply can be defined as the application of business values in the business practice of a company (Seawell 2010, p. 2). For a multinational company, business ethics is one of the critical aspects need to be taken into account in business decision-making processes. Failure to give attention on ethics may bring consequences on company’s reputation (Meyer & Jebe 2010, p. 159). The company is expected not only to pursue its own profits but also contributing to the environmental and social welfare of the community where it operates (Svensson & Wood 2008, p. 308).
Muhl, Charles J. "The Employment-at-Will Doctine: Three Major Exceptions." Bureau of Labor Statistics. Jan. 2001. Web. 16 Feb. 2011. .
Outsourcing has been around for many years. In this paper I will discuss some of the history of outsourcing, the goods things about outsourcing, and the bad things about outsourcing.
Globalization has had a major impact on the way business is conducted. Companies are increasingly turning to offshore software development outlets for design management. Anywhere from one-half to two-thirds of all Fortune 500 companies are already outsourcing to India and the amount of work done there for U.S. companies is expected to more than double this year according to Forrester Research. This paper will take a look at some of the arguments for and against outsourcing IT development to India. Most importantly this paper will take a look at ethical standpoints taken on outsourcing. But first, we'll take a look at the history of outsourcing to India.
Ethics are the driving force behind good business. Every ethical choice made by a professional can and will have a much different outcome than any unethical choice. Bad ethics can ruin many aspects of a business and as (Gaye-Anderson, 2007) states how quite easily the lives and professional reputation of the employees can even be severally damaged (para. 3). Everything from morale to motivation can be severely affected by poor ethical choices. Customers will take their business elsewhere. Employees will abandon ship. Other, competing businesses reap the benefits of the bad moral choices. Ultimately, the entire business can be brought down by one poor ethical choice.
There are a number of issues that affect international business ethics. They include employment practices, human rights, environmental regulations, corruption, and moral obligation of multinational companies. Employment practice refers to the working conditions an employee must work under. This can be very difficult to gauge, because many times the working conditions of a host nation are inferior to those in an organizations home nation. Many organizations have had to fight with these regulations. A good example of this in the trouble Nike found themselves in during the 1990s. There were a number of news reports released about the working conditions of most of its subcontractors were very poor . The Nike Company was not breaking any laws but it did bring into question the ethics of using a sweatshop. After this incident it left a number of questions for the international marketplace. In recent years many companies have cut ties with organizations that use unsafe and unfair labor practice.
The practice of outsourcing jobs is not a new concept. People have been outsourcing jobs for decades. Some people even offshore outsource jobs. There are many opinions to offshore outsourcing based on how it influences the economy. Some people are in favor of outsourcing jobs and some people are against outsourcing jobs. People need to get educated about the great impacts that offshore outsourcing does to an economy. The global economy has started to thrive and offshore outsourcing has profited the consumers as companies want to cut costs and competition, which is why I support offshore outsourcing jobs to foreign countries.