Is Outsourcing Unethical?
With today’s economy, the confidence and trust in our business and government leaders have Americans putting their money under their mattresses. The “microwave-generation” mentality has Washington scrambling, putting pressure on companies to find ways to increase their profitability to appease shareholders, as power-hungry politicians manipulate to keep their jobs in the next term.
The outsourcing of cheap labor to foreign countries is one example of the strategies employed by U. S. companies seeking to survive or to increase profits. In particular these days in the outsourcing of customer service departments and manufacturing. Not that outsourcing is solely a product of an unhealthy economy.Even during times when the economy is booming, cheap labor has been used, supposedly out of greed or the need to fill jobs that Americans are unwilling perform.
Do you believe it is ethical for U. S. companies to outsource cheap labor to foreign countries, while unemployment is at 9.4% nationally and rising? In addition, do you believe such practices will shoe up customer confidence? Is this an issue of nationalism versus globalism? What are the implications of “free trade” on this issue?
[Unemployment percentage resources from The Bureau of Labor Statistics www.bls.gov]
This post was prepared by James Scott.
The economic problems and pains that Americans face today are perpetuated by the lack of jobs here, but companies cannot be held morally or ethically accountable for outsourcing or offshoring. A business is only bound to play by LEGAL rules while seeking the accomplishment of its goals and purpose; operating within a capitalistic system in a free democracy guarantees the right to do this.
These economic woes are principally the cause of bad debt going unpaid: offering mortgages to unqualified buyers, credit cards to unqualified consumers, etc. Unfortunately, the people who are being hurt most by the downturn unwittingly CAUSED it by “biting off too much” and spending beyond their means. Actually, that goes as low as the freshman in college that got their first credit card ALL THE WAY UP to the largest of U.S. banks who the government allowed to offer bad loans… The dream had to end sometime…
Yes, it is a vicious cycle between greedy creditors and uneducated consumers. Bottom line, educate yourself, and take resonsibility for your actions. There should not be any bailouts required or allowed if these measures are taken.
I think alot of the reason that the outsourcing of work overseas gets a bad wrap has to do with the perception that labor in other countries takes place in “sweatshops”. People being forced to work under unhealthy or unsafe conditions for little or no pay so that corporations can increase profits is certainly unethical, but I don’t think this is always the case. Also, the idea of American workers losing their jobs to foriegn workers who work for cheaper sounds bad, but companies must streamline their processes and operate efficiently in order to compete. It is unfortunate for those that lose their jobs, but I do not consider it necessarily unethical. If the options are to lay off a small percentage of workers or continue to operate inefficiently and risk bankruptcy, therefore putting all employees out of work, then the choice is obvious.
It is not just labor that gets outsourced these days. Engineering and construction services can also be done by foreign companies. Work can also be outsourced to other companies within the US. As the world continues to develop in the direction of one global economy, outsourcing seems to make more and more sense. If the most cost efficient way of doing business involves the utilization of foreign resources, it frees up money and resources at home. Also, as globalization continues to progress, US companies could gain work due to outsourcing from foreign companies.
In summary, I don’t think the general concept of outsourcing is at all unethical, but sometimes the conditions associated with a specific case of outsourcing can be unethical. Outsourcing is done all the time within the US and there is no reason that foreign resources should not be considered if they are available. Corporations do have a responsibility to their employees to thoroughly evaluate the specific conditions of the outsourcing they are participating in and ensure that all activities are ethical in that particular situation.
I agree with Adam on the fact it IS up to the company. Whatever is best for the company should be the route they take, survival for them is the number one priority. Getting to greedy and still outsourcing is an ethical issue for sure and the company would make the call there. I disagree with Xavier on the fact that it is straight up ethical. I don’t think it is straight up ethical or unethical, but more in the middle. They have to draw the line between the black and the white. I agree competition is a necessity, but to an extent of ethics. Everyone is living in different economies, so it doesn’t make sense for someone in USA to charge an amount someone would in Mexico and China.
Personally speaking, I can’t go one way or the other 100%. It all depends on the situation of the company and time. Based on that, I can definitely give you an answer then.
I interpreted the question as “Yes” or “No” not “Maybe”. This is why I chose.
At one point a choice has to be made, for the “better good”. 50/50 decisions gives you something to do but gets you nowhere.
[Take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented. - Elie Wiesel]
And remember…
[Only those who do nothing make no mistakes. - Joseph Conrad]
Everyone is living in different economies, Fact. This is why the term Globalization exists - integration of national economies into the international economy.
I agree with you that it is difficult to paint a broad brush of ethical or unethical. However a company has a right and a duty to its shareholders and employees to be the best company it possibly can. If a company can save millions of dollars by shipping one segment of the business to a cheaper country, then that could help the company create higher paying jobs in the United States.
Determining whether outsourcing is ethical is highly subjective. Outsourcing deserves a place among the various tools and techniques used by companies to assist in securing their success and when done correctly can be a very effective strategy.
How do we know when it is done correctly? Again, this is highly subjective, but when examined in the context of Purposeful Action it becomes a bit more clear. If a company is simply trying to survive in a difficult economy, such as the one we are in, then outsourcing may be the solution that will keep them afloat. In this case cutting costs by outsourcing may provide the stimulus needed for their long term survival. If, however, a company is thriving and simply wishes to outsource to increase their profits it may be that outsourcing is an unethical option as it is being used simply to satisfy some underlying greed.
The US economy is in a state of flux and emotions are running high. We cannot simply state that the use of outsourcing is “bad” when in fact it can prove to be a very important factor in improving the global economy. It is imperative, though, that those companies that are considering outsourcing are doing so for the right reasons and with purpose. The company I work for recently made the decision to outsource and did so in light of the fact that revenues have continued to grow steadily. In this situation the decision was based on profit, not survival, and as such has alienated are large part of their IT workforce.
Note: This blog post provides a particularly interesting discussion on outsourcing: Outsourcing and Call Center Blog
A good question to pose is, when do you recall the outsourced jobs back to the US? At that point is it ethical to take those jobs away or do we hope to get off and answer this question the easy way and hope that by outsourcing origianlly, it created more jobs at home, thus keeping both positions abroad and at home?
Yes it is ethical for U. S. companies to outsource cheap labor to foreign countries. Outsourcing can help create new jobs offering a talented workforce at a fraction of the price. Competition is healthy and is needed for balance. A balance where developed and developing economies are exploiting each others markets, economies and labor forces.
I think outsourcing can be ethical and unethical depending on the situation. I think if greed is involved with the company doing the outsourcing, then it is unethical. Companies should strive to make a responsible amount of money, now a reasonable amount of money is different for different companies. I think if a company is hurting and the only way they can survive is to outsource to cheap labor that is perfectly fine, but say a company is making billions of dollars and they are greedy and they outsource just to make a few more bucks then that is unethical. I do not think that the government should intervene and say who can or can’t outsource. I think it is totally up to the company.
I believe you are right that the gov’t should not step in to stop a company just b/c it is doing well. In fact a company should be rewarded with lower taxes if it is a successful company following the law, thus creating more jobs. Increase taxes and you take jobs away from successful companies. The share the wealth philosophy does not and never will work in creating an educational or economical balance. Not even the politicians who push that issue believe it, it just sounds good to the ears of the people who are unwilling to educate themselves. This country is great that anyone can get an education, some people just have to be more creative in how they achieve it.
The idea and motives behind sharing the wealth are, at least in my humble opinion, right in line with the idea of helping out the less fortunate. On paper this sounds goog but as you point out is not likely to work in reality. Perhaps the primary reason is capitalism. Capitalism has served as a catalyst for so many great things but has also contributed to rampant greed.