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Cross-Cultural Perspectives and Ethicacy of Outsourcing Practices at Oracle
Evaluating the Cross-Cultural Ethics and Social Responsibility
of Software Outsourcing Programs at Oracle Corporation
The low costs and extremely talented programmers available in 3rd world nations is fueling a cross-cultural ethics conflict in addition to forcing companies in this industry to become much better at Corporate Social Responsibility (CSR) initiatives over time. These two aspects of the ethicacy of outsourcing software development on the one hand and the need for rigorous CSR frameworks and initiatives on the other at enterprise software provider Oracle Corporation is the basis of this analysis. Like Oracle, many American enterprise software companies face a comparable challenge, as an increasing number of qualified programmers and engineers can be hired in 3rd world nations including India for a fraction of what it costs to hire a programmer in the U.S....
Of the many aspects of this paradox, the most challenging to decipher and analyze is the potential risk to American national defense efforts, as much of the software produced is being written in India, Pakistan and China, all nations who have at times clashed with the U.S. government on foreign policy and security concerns (Pratt, 2008). What makes this challenge especially difficult is the high degree of ethical variations between India and the U.S., driven by cultural differences, variations in norms and values, wide differences in cultural dimensions (Miller, Anderson, 2004). Given these vast differences in culture, there is ample opportunity for ethical and CSR-based lapses to occur (Rucker, 2003).
Of the many companies who are quickly moving large parts of their software development offshore to India, Oracle is one of the leaders. They have for example moved entire departments and divisions to India, Pakistan and parts of China from its corporate…
As of today, Oracle operates in 160 of 171 nations globally and has development centers in 20 of them (Glover, 2005). Oracle has devised an application development strategy that allows for software to be produced continuously around the plant, ensuring 24/7 development cycles. One of the major hubs for this activity is India, which has emerged as the most productive and prolific of all outsourcing locations globally (Rucker, 2003). Oracle relies on Indian outsourcing operating specifically to support the Oracle 11i database extensions in addition to core programming teams on their Fusion applications, also-based throughout Asia and specifically in India (Glover, 2005). Oracle has invested heavily in a training and development facilities in India which has helped with the cultural transformation of the workforce and with knowledge transfer.
Despite these best efforts to make knowledge transfer more transparent, there still is a very significant difference in salaries and benefits between the Oracle headquarters personnel in Redwood City, California and those working in India. It is common to see Indian PhDs getting 40% less salary for identical work for example, and for entry-level programmers the pay differences are even more acute. There is clearly a double standard when it comes to ethical pay across the Indian and U.S. software engineering professions (Pratt, 2008).
Those
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