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Ethical Considerations Essay

This essay basically refers to the ethical considerations that organizations need to take into account while performing in any economy whether it is domestic or international. The reason why this essay holds great importance with respect to the corporate is the fact that while following their main goal that is profit maximization; these organizations forget that there is a social cost that the society is incurring on their behalf always while they are operating. All these organizations should be the ones who should bare this cost, but unfortunately it is the society that has to pay for it, may be not in the form of monitory terms, but in the form other social threats such as public health or pollution.

Although many organizations have realized this fact and have a special department for their corporate social responsibility, however, having said so, we have other examples as well of organizations which outsource their specific operations in offshore economies where they find cost minimization or lesser legal requirements for ethical considerations. On the face of the home market or other markets, these organizations do claim that they are actually performing according to the legal ethical organizational framework, however, in reality they are actually

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paying someone else to do that job for them.

Therefore, the main focus of this essay would be to discuss whether offshore outsourcing is ethical or not and whether it is always wrong or always right. However, first of all we will start the discussion with a brief insight into what actually is the ethical framework for organizations which they must follow in order to be called ethical[1].

In order to start with what actually is ethical behavior, an assumption or a golden rule is to be kept forward that everything that causes harm to others or that causes discomfort for others is unethical. Thus in order to be ethical we should assume this responsibility on ourselves that we do not have any right to make un safe conditions for others or involve in an activity which might cause discomfort for them. It is not all about what we think is good or bad for our selves, but we should understand that when we are living or operating in a society we are connected with a network of people who are directly or indirectly connected with our actions.

For example, if we are having a late night party in our neighborhood on someone specials birthday, it might be unethical because of the fact that the loud music and noise might cause discomfort for the neighbors who are actually connected to us[2]. Although, it might seem to be o with us as we are making noise in our own place and we have the right to do whatever we want, but, we do not have any right to cause others discomfort due to our actions.

Now this is a very simple approach to look at things but, it is not only limited to the individuals living in a society and their actions, but all the organizations that operate in a society are also bound to follow this very framework of ethics and should guard the rights, safety and comfort of not only their own stakeholders, but, the entire economy and society which is actually a stake holder in terms of effectees of their operations.

Many organizations which have made corporate social responsibility centers in their operations are only focusing on the environmental considerations and responsibilities towards the society, however they should understand that being ethical is not just about taking care of the wastes and pollution, but taking care of rights and comfort is a much larger responsibility[3].

According to the framework of ethical behavior, we see that defining ethical attitude is much easier to define by actually pointing out what it is not. For example, ethics is not about religion only, it is not about following the law only, it is not about submitting to the scientific advancements only, but it is about everything.

Whatever is wrong is wrong, regardless of religion, societies and laws. This statement is important because of the fact organizations tend to seek comfort in societies where they find relaxed laws, different religions and different social laws, but does that makes their operations ethical? No certainly not, although they might not be questioned on the unethical activities they are up to, still what is wrong is wrong.

Although there are no set rules for ethical decision-making but if we follow the several approaches of ethical decision-making we can actually make a more calculated ethical decision rather than just a haphazard decision without taking into account any consideration.

 Before we discuss the approaches of ethical decision-making, we can first two cases where companies have outsourced their operations to other countries without actually thinking about ethical decision-making[4].

The first case is related to the manufacturing industry in developing countries that actually outsource labor-intensive operations to other countries in order to save their cost. Also, they outsource manufacturing of certain products that require high legal restrictions in developed countries but have relaxed laws in developing ones, so they find the safer heaven there and get their products made. Many large companies have to face legal requirements for making certain products which might pose environmental, health or even life risks to the environment or the society[5].

These can be in shape of the security funds that they might have to provide the employees with, the extra wages, special treatment and costly purification plants, and heavy government taxes as well. Thus In orders to overcome all these problems, these manufacturing companies outsource these production lines to companies in other developing countries.

Although, legally these companies are doing the right thing as they are not into any such production in the other offshore country themselves and they are fulfilling all the legal requirements themselves, however, according to ethical considerations, these companies do have to realize this fact that they are exploiting the labor and the society in the off shore developing country just to minimize their costs and just to maintain their ethical standards in their home country.

As we all known that in developing countries all these social laws are very lenient and it is easy for them to produce such goods, thus on behalf of the parent company, these organizations actually cause the same harm to their society and pose risks to their own population. On the other hand, people do believe that it generates employment in these developing countries and it helps to raise their standard of living beyond poverty line. Unemployment levels in those countries are at all times high and they are actually looking forward to such projects themselves. However, the question is that are they actually paid on the same proportion as the company is earning profits over their services[6]?

Are they actually provided with the same security considerations that the employees and labor force in the developed countries enjoy? In short, are they actually treated equally? The answers to all these questions are NO! When we look at this situation n the ethical standards, we see that discriminating between people is also unethical because every human has the same level of rights and no one is better off or worse off from someone else[7].

Now in the next case, we see how companies are being unethical to their own employees and workforce just to minimize their costs and maximize profits. Many organizations are closing their own manufacturing, management and other important departments just because of the fact that they find cheaper labor and cheaper fully functional freelance companies in the other countries. Although, these companies do have the right to minimize their costs by doing so, but, what about their own existing employees?

A production manager narrates his own story and shares how he experienced such an off shore outsourcing policy from his previous employer. In his story he tells that his previous employer shut his plant in his country because of high labor costs and higher operational costs and hired another company in a developing country to provide him services.

Although, it is not illegal on the face of the matter, but, what about the employees who are left unemployed, or demoted and transferred to other departments? What about their cost of unemployment on the society? What about the implications of these downsizing on their lives? What about the overall rate of unemployment that these shut offs cause the entire economy?

The answers to all the above is again that there is no one responsible for any such event except the government or the society itself. Thus, in order to ethically decide whether these decisions are actually ethical or not we can take help for the ethical approaches that we talked about in the earlier part of the essay[8].

The first approach says that when the overall good exceeds the overall harm, and then we can say that an activity is ethical. However, it seems that in both the cases, the total harm is more than the total good that is only for the outsourcing company and its stakeholders. The second approach suggests that rights of all must be protected, but, are these employees compensated for their downsizing, or are the governments of developing countries compensated to the level of harm these companies pose to their physical environment and natural resources?

No thus again they are being unethical while being legal in the eyes of law. The fairness and justice approach suggest that all that are equal shall be treated equally, but, again we see that this is not taken into consideration as well as the employees are discriminated on safety standards and compensation[9].

Thus, by evaluating decision on all the above approaches, we see that companies can make a better decision that is much more calculated and it at least forces them to take into consideration the harm that they are going to pose to others. If they do follow the ethical approach they will see that they will analyze all the possible positive and negative points about their decisions, analyze direct and indirect stakeholders in their decision, come up with alternate plans that pose lesser harm and balance out good with bad in order to maintain the balance of the society.

Work Cite Page

Gale Reference Team, Edward. “Proposed ethics opinion on outsourcing: ethics advisory opinion on dealing with ABA Model Rules withdrawn..” Florida Bar News (2007): Print.

Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006

Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006.

Jackson, Steve. “Managerial Accounting: A Focus on Ethical Decision Making.” South-Western College Pub (2008): Print.

Kehal, Harbhajan. Outsourcing and Offshoring in the 21st Century: A Socio-Economic Perspective . Idea Group Publishing, 2006

Knauf, Edward. “Three ethics rulings guide third-party outsourcing..” The National Public Accountant (2006): Print.

Michigan Association of CPA’s, “Ethical considerations of outsourcing..” Leaders Edge (2004): Print.

Miller, Richard. “Legal and ethical considerations of outsourcing..” Westchester County Business Journal (2004): Print.

Salehnia, Ali. “Ethical Issues of Information Systems.” South-Western College Pub (2002): Print.

Taylor, Linda. “Are we right, or are we right? (ethical aspects of using low-paid labor in developing countries)(New Economy – Moral Issues):.” Canada and the World Backgrounder (1995): Print.

Winstanley, Diana. “Ethical Issues in Contemporary Human Resource Management.” Palgrave Macmillan (2000): Print.

[1] Gale Reference Team, Edward. “Proposed ethics opinion on outsourcing: ethics advisory opinion on dealing with ABA Model Rules withdrawn..” Florida Bar News,2007.

[2] Michigan Association of CPA’s, Ethical considerations of outsourcing..Leaders Edge,2004.

[3] Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006.

[4] Knauf, Edward. “Three ethics rulings guide third-party outsourcing..” The National Public Accountant (2006): Print.

[5] Miller, Richard. “Legal and ethical considerations of outsourcing..” Westchester County Business Journal,2004.

[6] Salehnia, Ali.Ethical Issues of Information Systems.South-Western College Pub (2002): Print.

[7] Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006.

[8] Kehal, Harbhajan. Outsourcing and Offshoring in the 21st Century: A Socio-Economic Perspective . Idea Group Publishing, 2006

[9] Jackson, Steve. “Managerial Accounting: A Focus on Ethical Decision Making.” South-Western College Pub (2008): Print.

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