Theoretical Frameworks and Dilemmas in Offshoring

Outsourcing & Offshoring

Ethics try to govern on the rightfulness of the dos and the don'ts in any activity. In business, some activities are practically inseparable regarding their rightfulness, acceptance, and goodness and badness to the receiving ends. An ethical dilemma arises in the case that businesses fail to be in one tune of a song, trying to venture into different pathways, both or all of which have the two perceptions containing the dos and the don'ts. The acceptance of one set of business activities, or any activity or act might be a wrong on the other side of the congregation, hence necessitating for the presence of a unifying factor that will guarantee a way of balancing the equation given the many variables attached to the act (Brown & Wilson, 2005).

This piece of research attempts to explore the ethical dilemma of offshoring and outsourcing, a business practice that has two sides from the consumers and the proprietors, and serves to benefit a section of them and not the entire group. This ethical dilemma is attached to the initiations and regulations seen to guide on how to carry out several duties and activities attached to businesses in the U.S. and the world as a whole. With a review of several scholarly articles, much has been explored regarding the ethical dilemma in place, together with the many activities being done to cater for the issues that arise from the dilemma. For instance, the study ventures into exploring the nature of leadership implications and the global context as regards the ethical dilemma. Several perspectives have been brought to light, highlighting the significance of the dilemma as seen by different eyes and understood from around all the dimensions in play. For instance, the variables that determine the nature of the dilemma are different and serve to integrate different reactions from the consumers of the same. As such, theories and business ideas have been explored as a way of managing the global reactions and contexts of the ethical dilemma (Daly & Silver, 2007). The western theoretical framework together with the non-western theoretical framework has been used to depict the essence of the dilemma, making for its understanding and application. Moreover, adequate and appropriate recommendations and conclusions have been drawn on tackling the ethical and leadership issues on offshoring and outsourcing in the current business world.

Introduction

No business owners or any business in the world would seek to fail in its bid to grow and expand. Every business has its initiatives to grow from one level of productivity and success to the next higher than the previous. This calls for many of such businesses to engage every mechanism that will ensure that they remain valid and sustainable in the presence of other businesses, as they aim to grow. Growth is imperative and paramount to any business or strategy. Some circumstances predispose organizations into making wrong choices and strategies. In some cases, the right decisions and strategies are realized resulting in increased productivity within the business. Over one million businesses in the U.S. are nurtured and owned internally (Doh et al. 2010). This is beside the many businesses in the form of firms that have expanded from the foreign regions and established in the country. In the impending desire and need to keep with the rising competition, each of these businesses would encourage practicable and open strategies that will ensure growth within the country and outside the country (Ebrahimi, 2009).

Currently in the U.S. alone, much is yet to be decided on the levels of outsourcing and offshoring that has done businesses to seek alternative ways of becoming better. The competition in the country escalated by the presence of the external businesses has necessitated that many businesses try to figure out what is essentially protective to their presence and sustainability. One would question the acts of outsourcing together with offshoring (Ambika et al. 2012). The reasons for such perceptions are not limited to the ethical considerations imperative in making sure that the present businesses in the country are by the existing legal frameworks. One question that will always be a bother to many business individuals is the essence, practicality, and rightfulness of offshoring and outsourcing in the U.S. As businesses seek better avenues to increase their growth, some of the practical ways can be subjected to so much prejudice, misunderstanding, and general mistrust amidst their use in the society (Doh et al. 2010).

The ethical dilemma, leadership implications and global context

An ethical dilemma cannot be downplayed regarding the essence, usefulness, the need, and the implications of outsourcing and offshoring did by many businesses globally. Outsourcing is a business act that refers to the act where an organization contracts work onto a third party. On the other hand, offshoring is a business act that refers to having to complete some work in another country as a way of leveraging for cost advantage. These two acts are quite confusing as perceived and understood by different businesses. Some would say that it is possible to offshore work and not outsource it while others will hold to the belief that it is possible to outsource work rather than to offshore it (Lacity, 2009).

Often, offshoring involves the implications done on three grounds, which are the different stakeholders being involved, expectations, and with no one approach being considered right. The offshoring process entails three major parts, which are jobs, the working environment, and the worker conditions. The first issue relates to the job export. People will have thought that they are experiencing a loss of jobs: managers have to address job loss in the U.S. as an unethical move favoring other nations. People will not have any significance for the underlying reasons for engaging the prospects of offshoring (Wendy & Lisa, 2009). The media will have its say, catering information from different perceptions and understandings. For instance, the media will propagate the perception that the said company is cutting a certain number of jobs to export them to another country (Dou & Sarkis, 2010). Such a statement can be understood in two fronts, as a positive move aimed at increasing growth and productivity, and as a negative move that intends to lay off workers in the country.

From an economist point-of-view, there will be short-term job loss, which will result in cheaper goods. With the presence of the cheaper goods, there will be more money saved, also resulting in more money being spent elsewhere. With more money spent, there will be a certainty of having new jobs in place. This means that the media and the economists in the country will have diverted perceptions, understandings, and decisions made by one act of a company offshoring. The truth of the matter is that the semi-skilled workers are the once who are mostly affected. Approximately a third of them will miss the jobs that were always destined to them. A third of them will have less money, and a similar amount of them will see life as a challenge and always the same (Dou & Sarkis, 2010). One will ask a question like "is this act of offshoring right at all?" such questions will come from the fact that it is sad for people to lose jobs out of the offshoring reason. It might not be seen as ethically right to have people lacking fundamental needs because a company they have been working for has decided to offshore most of its activities to the nearby country. Moreover, it might be seen, as with the economist, that the act of offshoring is to benefit the business, and there is nothing unethical about it. Because of this, the company will experience a win-lose situation. It is clear from this perception that offshoring is not equal to biggest creators of jobs. With an increased efficiency, there will be more hiring than layoffs (Lacity, 2009). The nature of low unemployment rate will always be questioned. In such a case, the small and medium businesses will save the day. With such a perception, one is likely to make a conclusion that offshoring seems not to be a bad thing as seen by the media and the individual people, most of whom are the consumers.

On the conditions of work, offshoring is equal and resultant bad working conditions; this is unethical. It is unethical to have workers working in conditions dangerous to their health. The media will have their say, and are likely to insinuate that workers are sometimes forced to stand for over 20m hours as they work. Workers are exposed to toxins, explosives, and other dangerous environments. In the real sense, the media will not be happy about everything here and hence; the likely conclusions is tat offshoring hurts people and hence should not be practiced. The truth of the matter here is that the top companies have a minimum wage and are not sufficient. In some cases, people are forced to work overtime (Ebrahimi, 2009). The excessive labor utilization results from one action in almost every three seconds. There is no case of labor contracts with most of the workers being under the ages of 18. The workers have a feeling that most of the jobs are satisfying although the maximum jobs drain their efforts. Most of them, which is not more than half, will consider their job ideal.

The third factor that is of the essence with offshoring is the environment. Here, people will think that offshoring within a bad environment is unethical. There is no way in which a bad environment of work can contribute to an ethical behavior or policy within a business. The truth of the matter is that most of the countries with a business that have high status will render their activities to the offshore. Offshoring results in something that is not expected and wanted by the people. For instance, offshoring is likely to affect the nature of the environment in the case that emissions are increased to the working place. A dilemma also arises when it viewed that pollution has been transferred to another country.

Outsourcing has its ethical considerations in its applicability and use. There is a misalignment interest upon vendors and clients with increased resilience on third parties. Besides, the lack of in-house knowledge critical to the business operations is exposed to outsiders who might misuse it. Outsourcing has its challenges, most of which makes the activity have ethical issues and dilemmas. When a piece of work is contracted to an outside organization, the probable workers, and owners, most of whom have become proprietors, will miss out on the general issues supposed to be considered and made relevant to the people. People in the country will certainly not be happy about this issue as they will feel some sense of neglect and failed consideration of their opinions and rights. They will feel that it is unethical (Stack & Downing, 2005).

In the presence of the media, much of the perceptions derived will be based on what is essentially critical to the growth of the business in place. As a result, many businesses decide to outsource simply to increase the chance of growth through a change that has been introduced into the organization. Normally, companies will decide to outsource as a way of taking advantage the available specialized skills, take advantage of the efficiencies of the costs together with taking advantage of the flexibility of labor. Nonetheless, such advantages do not just come without a due consideration of the challenges involved, most of which affect on the inherent people in the organization (Stack & Downing, 2005).

Why would someone outsource, trying to save on costs at the same time causing loss of employment? Such questions touch in the sensitive issue of ethics in businesses today. Many people concerning this issue of outsourcing, arising from the different perspectives generated from the activity (Stack & Downing, 2005), have posed a couple of questions. Since outsourcing touched on the life and activity of the western countries, the opposition has often been the main realization. The loss of jobs is something that not any one person will like in any society. No employee will entertain the aspects of loss of job at any given time and in any given place. Any strategy that tries or works in some way to bring loss of jobs will certainly be eradicated from the society. The loss of jobs takes place in the host country in the case of outsourcing, which is a happening regarded as the main negative effect of outsourcing.

While addressing the associated dilemmas, it is always valid that companies have outsourced many of the functions as a way of trying to stay competitive in the present competitive market. Organizations seek the assistance of specialized companies, which might not mean that they are supposed to be outside the country, to outsource several tasks geared towards improving the manner in which the vendor is handled. One great benefit that comes with outsourcing is that it saves costs for the company while giving access to resources and skill-sets that might have been obtained locally.

With outsourcing, one is not arguably going to access cheap labor tactic. He is she is going to access strategic business decisions that come with this activity. Nonetheless, from the ethics point-of-view, issues will be burned with outsourcing, as many businesses will want to move to outsourcing at the expense of the people. Quality is one aspect that has to lose guaranteed to the customers. Control, quality, and cultural differences are some of the concerns that come up in the case that one thinks of outsourcing. For over ten years now, outsourcing in countries like India has managed to work with customers all over the world. One main and primary task with outsourcing is to strengthen relationships through a process of letting work speak for itself. The importance of outsourcing is the fact that companies are accorded the chance to stand on their own and be competitive as compared to those in the market. The relationships established work to better the state of performances needed to boost the overall functioning of the companies in the market.

Leadership Perspective

Leadership is a sensitive aspect that has to stand out in any business setting. With outsourcing and offshoring, the elemental facets that have to be out under stiff consideration are the nature of leadership in play. There is more significance with the manner in which the ethical dilemmas have to be handled with a prospect to avoid interrupting the normalized process of growth and development of the business or firms in place. Leadership is affected by this outsourcing and offshoring dilemma. This means that everything used has to come from a decision basement where leaders have to engage varied information that brings awareness to the decisions and factors of play and work within an organization. Leadership has to face the nature of the dilemma and deliver even in its presence and absence.

The nature of the leadership has a greater influence on what is to be done in the case of this ethical dilemma. For instance, it is quite clear that the leadership in place is the one responsible for the actions that the company adopted. In the U.S., there is a likely chance that the existing leadership within the companies is the ones responsible for everything that some by the individual companies and businesses. This perspective claims the right towards mastering what is important to the overall management of the businesses and firms without having to touch on what is essentially unethical in nature. With the non-western perspective, leadership has to be enrolled within what are valid and showing signs of manifesting the best forms of growth for the company (Bregman et al. 2015). Business has to continue which means that leadership has to be based on the ethical directions obtained from the different guidelines. Moreover, leadership has to be central to the maintenance of ethics within the structures of business. It is not worth to consider the attributes of a business and its strategies without considering the likely issues and dilemmas likely to be engaged. In such a case, leadership will have to play the role of sustaining stability in everything passed to cater for the influences and the essence of stability within the businesses (Hoffmann, 2013).

With quality comes the ethical dilemma. Handling quality in a more appropriate manner will help in managing the effects felt because of these dilemmas. Companies that participate in outsourcing have normally faced resistance and complaints concerning a drop in the quality when the jobs are moved. In the previous days, as witnessed in both the western and the non-western companies. Outsourcing was adopted as a means to saving the costs. The posting also done with an intention that low-quality output will be eradicated with the reduction in the costs involved. Currently, many things have changed. The relationships within outsourcing are used to define the nature of the quality as one of the main deliverables. When the right partner is not identified, the status of the quality is subject to greater risk (Hoffmann, 2013). Some outsourcing providers make the charge low for the companies that have attracted outsourcing (Stouby & Rerup, 2015).

Some theories will treat outsourcing as similar to allowing illegal immigrants into a country and giving them the chance to acquire driving licenses. What is so clear with outsourcing is that the economic and political interests have regarding an upper hand instead of the right to live. Such an aspect has to be studied in a rational manner so that one can determine the dilemma inside the entire practice of outsourcing. According to some supporters of the same, the economic considerations have to be put in place as first choice considerations that will determine the extent at which outsourcing is done in any setup (Hoffmann, 2013). Some consider that more jobs are developed or created in the host country because of the benefits that the country is getting from outsourcing; increased spending power is inevitable. Nonetheless, job displacement and social costs are there and should be considered above the trend of outsourcing takes over the security of the long-term viability of the economic together with the educational systems (Maertz et al., 2010).

Presently, the U.S. has lost almost three million jobs over the last three years because of this notion of outsourcing. Moreover, such a loss has come with at least fifteen percent of the jobs outsourced to the foreign countries. This is dangerous since the U.S. as a country has citizens who are losing on the jobs being outsourced. With technology, there is a growing trend of outsourcing, with an estimate of ten million dollars in net contracts as were outsourced in the year 2004. As of 2008, there was an estimate of 23 million dollars that were subjected to outsourcing in the technology sector (Maertz et al., 2010). This is still a dangerous trend to the country as a whole since in the end, it seems like everything will be outsourced, and making the local people lacks something to do. Action must be taken because the future might not be good for the country regarding handling its businesses internally. There is a need for some state of responsibility directed at the entire business sector in the country.

Western Theoretical Framework

From a western theoretical framework, the perceptions of the dilemma are rather similar to the perspective is taken from the stakeholders of the business or the companies involved in outsourcing and offshoring. According to the perceptions of those who are engaging in outsourcing, there is no point of having to waste any more energy within a contrived environment that does not offer enough space and energy for the competitive actions needed for the business. In any environment characterized by competition, businesses and companies will try to reach to levels that will enable them become sustainable and secured in the market (Sen & Shiel. 2006). With the strategy to outsource, much comes to the credit of the company or the business. Businesses are much more protected when they have part of their dealings and branches expanded, as probably done with outsourcing and offshoring. Nonetheless, the challenge of managing to deal with the likes and preferences of the customers is what brings a major dilemma to everything. For instance, it would be easy to have a general plan that enables the companies to spend little and earned more. Most employees are losing jobs with the embrace of outsourcing, something that is also attached to the preferences and likes of the customers, present and potential in the market.

The aspect of quality must be considered when a business is seeking to adopt an outsourcing and offshoring strategy. Customers are the ones who feel the difference when a business decides to go global in any case posting with the prospects of outsourcing. It is imperative to consider the need to have a sustained and improved quality. The company, as viewed from the western perspective, sees the dilemma of having to clash with what the customers in the market perceive as with nature and the quality of the products and services offered before outsourcing and after outsourcing (Cruz & Rayner, 2013).