Business ethics principles and practices

Business Ethics

Export capital for production abroad

The ethical quandary regarding exporting capital for production abroad involves the allegation that the capital could and should be better deployed within the United States. The money could be used to hire American workers for American production facilities. American domestic shippers and American owners of equipment rented out to the facility's users would also benefit if the capital remained 'back home.' On the other hand, it could be argued counter to these arguments that American consumer interests are helped through the use of outsourced foreign labor hired by this exported capital. If the labor is cheaper, than the costs of production will be lower, and the lower resultant prices can be passed onto American consumers. Provided that the workers abroad are paid an ethical wage, it seems largely a win-win situation. If the company exporting the labor prospers, it can hire more workers from America and place them in managerial positions at its international as well as its domestic locations. The nation receiving the production facility has an influx of capital that benefits the workers of that nation and gives them exposure to the West's economic culture and capital.

According to Shaw and Barry (2007) utilitarianism is the philosophy of 'the greatest good' for the greatest number. On a utilitarian calculus, there are more wins than losses. An example of this might be seen in India, where American companies have created call centers which hire educated members of the burgeoning Indian middle class who speak English and provide technical assistance to Americans having trouble with their software. Of course, the costs saved for the American consumer are not as impressive if the labor is poorly trained and incomprehensible, and then the utilitarian win-lose calculus must be readjusted when contemplating the use of foreign capital to establish such centers. The company, in short, may lose customers through its decision, and benefit very little.

Export commodities which have been banned from sale in the United States

Commodities that would not pass U.S. inspection rules regarding safety should not be 'passed on' to other nations. In this case, the Kantian categorical imperative (Shaw & Barry 2007) would seem justified in most instances -- behave as if you are setting a law for all time. How did American consumers feel when their children's lives were put at risk by hazardous products sold by Mattel that were manufactured in Chinese factories? The lack of ethics of this action would seem obvious: if the products are not safe for American consumers, they are not safe for human beings in general.

However, the issue is more nuanced -- what if, as a humanitarian effort, a pharmaceutical company sold recently expired drugs at very low cost to an impoverished developing nation in the grips of an epidemic? What if a food company donated food that was safe but 'past its expiration date' to a famine-stricken nation? In this case, a utilitarian calculus would support such exchanges. The balance between the benefit of being cured or not starving to death and potential harm of bad drugs or food would suggest such a donation was ethical. From a Rawlsian point-of-view, imagining whether you were the producer or the consumer, it seems likely that 'you' the consumer would take a risk of eating safe but recently stale rice to avoid starvation, much like a producer would be happy to gain good publicity and unload goods that cannot be sold in the U.S. Everyone, in short, benefits, regardless of his or her position in the exchange.

Export commodities which have the potential for misuse. Specifically, did Nestle act irresponsibly in marketing infant formula to the Third World?