By Sharad KC
In their book, Outsouring America, Ron Hira and Anil Hira touch on an article published in BusinessWeek, from February 3, 2003. It said, “A new round of globalization is sending upscale jobs offshore. They include chip design, engineering, basic research- even financial analysis. Can America lose these jobs and still prosper?” Not only has the debate over outsourcing been an economical and political one, but also a daily ethical one. Many economists believe that outsourcing helps cut costs for business and, at the same time, provides cheaper products and services for American citizens. But, ultimately, those outsourced jobs are lost and the economy needs to innovate or create new jobs. A study in 2004 estimated that 3.5 million white-collar jobs and $151 billion in wages would be outsourced by 2015.
It certainly looks profitable for companies as they try to reduce costs through inexpensive labor services; however, there is always the ethical dilemma of off-shoring. Are companies doing it in an ethical manner? What role do ethics play in making these kinds of business decision?
The main task of a corporation is to provide goods and services to the consumers. Apart from that, it also has a social responsibility and moral obligation to give back to the society that has helped in the success of the firm for years. The ethics of a corporation comes into question when firms ignore this and go for profits over people. The most prominent form of outsourcing American jobs has been within the manufacturing sector of the economy. As more companies go overseas to places like China, India, and other Asian countries, the loss of jobs is well visible, and the ethical issues involved are clearly evident. Often, companies fail to provide that social duty when they outsource jobs, but some companies go further than that and commit human rights violations and labor violations. Nike, the biggest manufacturer of sportswear in the world, employs over one million people, but its outsourcing contracts 500 factories in 45 countries. In 1996, Nike was accused of labor violations and human rights abuses such as child labor and very poor working conditions.
I’m sure we all agree that it is unethical when companies fail to provide standard working conditions, commit labor violations, and sell products and services that do not adhere to quality standards. But, what about not observing environmental standards, polluting, and failing to give back to society? Do you consider these just economic/environmental problems or ethical ones too?