Outsourcing a Good Thing  Research Paper

  • Length: 8 pages
  • Sources: 6
  • Subject: Business
  • Type: Research Paper
  • Paper: #82995786

Excerpt from Research Paper :

Ethics in Outsourcing

The subject of ethics when it comes to outsourcing is a very complex one with people falling mostly into one of two camps. Indeed, many companies and their executives are focused on keeping costs down and stakeholders or shareholders happy. However, just looking at the bottom line can be ethically perilous due to the defined, protracted and very real effects that outsourcing has in the countries to which jobs are outsourced. Factory safety, unsafe working conditions and so forth are just some of the effects that are rendered. This does not happen in all instances, of course, but it certainly does occur in some. Given that, there will be an assessment of whether outsourcing is ethical and whether it could or should be done at all. If it should be done at all, it will be assessed what safety and ethical measures should be taken. The subject will be analyzed using the ethical lenses of virtue, utility, justice and rights. A stand will be taken regarding what should be done vis-a-vis outsourcing with an ethics-based justification for the same. While outsourcing may seem attractive and without equal when it comes to the selling or use of goods and services, there are some notable ethics-related downsides that can emerge as part of the practice.

Summary of Problem & Current Situation

Something that has been raging on for years is the practice of businesses outsourcing some or many of their operations and tasks to other companies. These outsourcing activities can take on many forms. Some of the outsourcing stays within the United States but a lot of it goes overseas. Examples of the former would include the outsourcing of data and financial services like sensitive document shredding, payroll and/or human resources task handling and so forth. The overseas outsourcing is typified by two major job types, those being manufacturing and customer service. Manufacturing usually comes in the form of goods being made in areas like China, Bangladesh, Mexico, other parts of Central America and so forth. Customer service roles and administrative handling are sometimes down out of countries like India, the Philippines and so forth. The outsourcing to foreign countries is done to save money for the outsourcing firm. However, there are some ethical and cultural tradeoffs to engaging in outsourcing (Benkoviskis & Worz, 2014).

One perspective is the nationalistic and populist side of the argument. Indeed, many people and groups in the United States including unions, proponents of goods and services in the United States also originating from the same and so forth are quite perturbed at all of the manufacturing that is not being done in the United States anymore. To be sure, the United States still engages in a lot of manufacturing but a lot of activity including a lot of what is sold in Wal-Marts and car dealerships around the country are made, in whole or in part, in other countries. The other major concern when it comes to outsourcing is the ethics behind dodging the higher wage and benefit requirements in the United States and taking advantage of a dearth of the same in other countries, most notably China. Indeed, China is labeled by many as having more economic output overall than the United States. However, what is often not mentioned is that China has three to four times as many people as the United States and there are little to no wage, benefit or safety protections in that country. Even American juggernauts like Apples and others have been ensnared by this being revealed and discussed (Frost & Burnett, 2007).

The main point of pain and concern that many outsourcing companies point to is that many Americans center on price and supply when it comes to shopping. To many, where something tends to be made is of no importance or the people involved do not make the connection between where something is made and how much it tends to cost. Indeed, if the Chinese-made goods at Wal-Mart were made here in the United States, there is an extremely high likelihood that they would cost more, if not a lot more, than they do now. Even so, some people are willing to pay more for American-made goods but the question becomes where there is enough of that trend for an American retailer to capitalize on that. When it comes to discount chains like Wal-Mart, the prospects are dime of that working although a blended approach whereby Chinese products are still heavily imported and sold but American-made items are somehow labeled for those that want to make that choice. When it comes to customer service, there is a concern (and some bigotry) about a person that is clearly a foreigner answering a customer service call for an American firm as it can rub customers the wrong way. Indeed, it is usually somewhat easy to tell if someone on a customer service line is either new to America or is not from America in the first place. Of course, relying too much on these perceptions can be borne of racism and so forth. However, it is also probably fair to say that spending less money will bring a lower level of service. If a customer service representative is not familiar with United States culture, United States expectations or the United States business cycle. Regardless, it is fair to point out that there can be issues when English is not the first language (or even a proficient second language) for a person. American slang and expressions are very different just like if they are in all countries around the world. (Jayaraman et al., 2013).


The first lens and test that will be used in this report is that of utility. Of course, the concept of utility is that the "rights" and "wrongs" of a behavior are what determine whether it could or should continue. When it comes to outsourcing, there is good and bad to it. The good comes in the form of low prices whereby people are allowed to buy needed or even discretionary items that they need and enjoy, respectively, and one could make the argument that this happiness and lower cost is necessary given some of the trends in today's society. Indeed, a lot of people invoke that the middle class is disappearing and/or that the high cost of anything necessary or required is going to harm the poor more than the rich. However, the counterpoint to that all making outsourcing work from a utility perspective is what happens with the people that make those products. As noted before, the wage, hour and safety laws in China and other common outsourcing countries are atrocious to criminal. Wages per hour are often nominal at best and they usually pale in comparison to what is realized and paid within the United States and other more modern and industrialized countries. Further, the cheap prices realized by American consumers, due to the dangerous conditions and shoddy pay, come at a steep ethical price. Many hold that when it comes to utility, one must look at the conditions and outcomes of all people affected by outsourcing and this has to include the people that make the goods or deliver the services and not just the consumers. In short, outsourcing is a boon for consumers and stakeholders of a firm on the American/consumer side. It is also a boon for the executives and power-brokers on the Chinese side, or whatever country is doing the work. However, the workers in the foreign country are being treated like second-class citizens or even slaves whilst making the goods. Even so, there is only so much a company can do when it comes to using a foreign factory that is not directly supervised or under the direct control by the outsourcing firm. To be honest, those factories probably know well in advance when they will be visited and this can lead to a fake face being shown when "inspections" are made. It could also be true that some firms know this in advance and they use that as a wedge to feign ignorance when something terrible happens like a building collapse or an industrial accident that hurts or maims more than one person (Jones & Felps, 2013).

As for the virtue test, the negative aspects of the utility test are largely echoed with this one. Per the handout for the class, the question to be asked is whether the action represents the kind of person that the analyzer desires or wants to be. For those that are oblivious to what happens in some of these foreign factories and sweatshops, this question probably does not even come up. However, for those that have their eyes open about what does indeed happen in some of these foreign countries as it relates to American-bound goods, the question is an easy one to fixate one. In short, the virtue question results would effectively mandate and require that a person actively avoid buying outsourced goods such as clothing and…

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