International Business in General, it

International Business

In general, it is ethically defensible to offshore work, even at the expense of long-time domestic employees. For one, as manager my primary duty is to the shareholders, which means that my first obligation is to enhance shareholder wealth. Other obligations are secondary. In addition, there is usually no obligation to long-time workers. In the U.S., employment is "at will," meaning that employees can be terminated even without cause. There are exceptions to the at-will doctrine, however, such as for employees with contracts individually or as part of a union. It is not ethical to offshore labor where an employee has a contract protecting their employment, if the offshoring is in violation of the contract.

Ch 4 Q3. Competition in the form of imports from countries with lower wages is not unfair, as long as the price of labor is set by market forces. Price of labor is just one dimension of competitive advantage. Indeed, in many cases the developed country has a competitive advantage in education, training, access to capital or other considerations. Thus, each country competes on its strengths, which is not unfair. This argument is the best interests of the unions and the people they represent. The unions keep up membership, which is the key driver of revenue. The union members benefit directly from the wages and benefits they receive. They would, in theory, benefit from the competition in the form of lower prices, but this benefit would not outweigh the direct wage benefit they receive from limiting competition. The country as a whole does not benefit, as the nation would receive more goods for less if the trade is allowed.