Globalization Has Impacted Almost Very Term Paper

  • Length: 10 pages
  • Sources: 6
  • Subject: Business
  • Type: Term Paper
  • Paper: #58322621

Excerpt from Term Paper :

Outsourcing and Offshoring

Critically examining the current business practices used by the Hershey organization in the wake of globalization, it is evident that outsourcing and offshoring are among the most prominent practices currently being utilized by the organization. A review of the literature on the process of outsourcing indicates that, overall, this practice is often met with considerable disdain by domestic workers. Scholars argue that the principle perception that pervades the decision to outsource is that the organization is sacrificing good American jobs for cheap labor. Although access to cheap labor may save the organization money, this money is saved at the expense of hard working Americans (Cadbury, 5-6). In short outsourcing is unethical because it effectively places profits above people.

Even though outsourcing is clearly an ethical issue for employees, scholars examining this issue argue that outsourcing is not an ethical decision for the organization. Rather, the decision to outsource is often the most viable method to keep the organization financially viable over the long-term (Cadbury, 6). The pressures of globalization have forced organizations to cut prices and profits, such that they can only remain competitive with cheaper labor. While many believe that outsourcing has a negative impact on the American economy, research in this area had not demonstrated this to be the case. In fact, outsourcing can have a positive impact on the organization, prompting greater revenues and profits and a reinvestment in operations (7). Further statistics demonstrate that over the long-term, the net job loss for American workers has not been significant given the total amount of outsourcing that has taken placed in recent years (8).

When placed in this context, it becomes evident that Hershey's efforts to outsource operations do not appear to represent an ethical issue. Although many American workers currently losing their jobs would argue that the organization has acted unethically, the reality is that outsourcing has become a viable business practice that must be defended in order to ensure that American companies can survive over the long-term. Thus, while it may be difficult for some workers to accept, outsourcing at Hershey does not appear to be an ethical issue for scrutiny.

The Issue of Unhealthy Food

While the issues of outsourcing and offshoring clearly have widespread ethical implications, there are other issues that are raised in the context of Hershey's current efforts. Based on the data provided above, Hershey is aggressively seeking new markets for its chocolate products. Specifically, the organization is currently targeting India as a principle means to bolster its business. Although the size of the market clearly makes this move attractive, the question that is raised in this context is whether or not it is ethical for the Hershey organization to aggressively market and sell product which can have negative health effects. Researchers argue that the negative health effects of chocolate have become so prominent in the U.S. that Hershey has lost a considerable amount of sales because of efforts on the part of Americans to live healthier lives (Beirne, 11). Given that the same products are being sold in foreign countries, it does not seem feasible to argue that these products will have any less of an impact on overall health.

At the core of this issue lie the ethical responsibilities of the organization when it comes to promoting products which have questionable health value. Junk food has become vilified in the United States because of its overall negative health benefits. While one could easily argue that chocolate will not cause any ill health effects if consumed in moderation, the aggressiveness of the Hershey organization in promoting and developing its products may not allow for "moderation" to prevail as a consumption practice. Given that the organization understands the health implications associated with product consumption it seems reasonable to argue that the Hershey Company is walking a very thin ethical line. This ethical line becomes even more precarious when one considers the aggressive nature of Hershey's campaign to make chocolate the preferred treat in Indian society.

Slave and Child Labor

The final issue that must be addressed in the context of this investigation is that of slave and child labor. While it is important to note that Hershey has not yet been implicated in child and slave labor operations in the acquisition of its raw materials and the production of its final products, there is considerable evidence which suggests that the organization has used these labor practices in order to improve operations and reduce overall production costs (Orr, 25). With this in mind, it is reasonable to assume that Hershey may engage in some ethically questionably labor practices. Although these types of labor practices clearly have no ethical merit, a review of child labor in particular demonstrates that there are some questions that are raised by this process (Pierik and Houwerzijl. 193).

Of particular importance when it comes to the issue of child labor is the context in which this issue is framed. Scholars examining this issue have been quick to note that while child labor is despised in most developed parts of the world, the idea that child labor is not acceptable is a Western conceptualization (Pierik and Houwerzijl. 193). What this effectively suggests is that Western, industrialized nations have developed a set of labor rule which they believe should be imposed on all developing nations. Even though these labor practices may have complete relevance in developed nations where economic infrastructure is stable, the applicability of these practices in many developing nations is not salient (194). While this may appear to be an effort to defend the use of child labor practices, it is not. Rather, this is simply an attempt to elucidate the complex issues involved with conducting business in a global environment that does not utilize a level playing field for economic development and trade.

When the issue of child labor is framed in this context, it becomes evident that not all developing nations will be able to adhere to the rules and standards developed by Western industrialized nations. Placing this issue into the context of Hershey's operations, it seems reasonable to argue that Hershey may ultimately defend its actions by arguing that it does not promote or support the use of slave or child labor in the development of its products. However, because there are only a few select regions of the world where coca is available, Hershey really has no control over the regional or local labor practices that are employed to secure its raw materials. Although this may appear to be a questionable argument to reduce Hershey's culpability, it is one that clearly represents the overall scope of how ethics fit into the larger context of business operations.


Synthesizing all of the data that has been provided in this investigation, it seems reasonable to argue that Hershey's global operations raise a number of ethical questions that require some consideration. First, this research demonstrates that outsourcing and offshoring have become viable means for Hershey to reduce its overall costs and bolster profits. Second, this research demonstrates that Hershey is aggressively working to market and sell products that are classified as "junk food" in the Untied States. Finally, this research demonstrates that the labor practices employed by the organization in specific parts of the world are questionable in the context of Western labor practices.

Although a review of Hershey's operations elucidates these specific ethical issues, an analysis of these issues clearly demonstrates that there are two sides to the story. First, a review of outsourcing in the U.S. demonstrates that this practice is one that is clearly legitimate and necessary for organizations to remain financially solvent over the long-term. Second, a review of Hershey's products as junk food demonstrates that consumers ultimately have the right to determine what is right in terms of what they eat. Finally, a review of child labor practices suggests that these practices may be ethical in the context of developing nations and that Western values cannot be equitably applied in the context of countries that do not have the same level of social and economic stability. Although these arguments may not be palatable to some scholars, they represent an honest effort to elucidate both sides of the issue.

When all of the issues are examined from both sides, the true complexity of business ethics is elucidated. Even when organizations attempt to develop policies that meet the best interests of stakeholders, the end result is the development of policies that meet the real world conditions of operations. Unfortunately, as organizations begin to expand their operations into the international arena, the scope of conditions that are necessary for operations becomes much wider, creating considerable challenges when it comes to assessing the ethical validity of specific decisions. Although Hershey may appear to be engaging in unethical practices according to U.S. standards, the reality is that the organization is simply taking the steps needed to ensure that the organization produces profits for its stakeholders. In the end, one could argue that…

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