Monday, February 4, 2013

Ethics related to outsourcing

The act of outsourcing can be beneficial to a company because it is allowing them to produce products at a lower cost than they would be able to in the United States. Usually outsourcing takes place in developing countries (China, Indonesia, India, Singapore etc.) Technically to an extent outsourcing is benefiting the workers in the other countries as well by employing them. However, bigger companies are taking advantage of the oversees employees. In my other class, Organizational communication we are discussing outsourcing and ethics. Recently we have viewed a documentary called, The Corporation. In the trailer shown below, the cost of production is compared to the employee wages. For example, a Liz Claiborne jacket goes for $178 and the employees making it are paid 74 cents. Nike is also a big contributor to the unethical type of outsourcing giving a time frame for production bringing wages to 3/10 of the retail price. To me this is very unethical. I understand that money is everything to these companies but paying employees that little seems very unethical. I always knew that companies were outsourcing, but just recently did I go through a lot of my clothes only to find that the majority of them are made in China.
Is it unethical for us to be supporting these companies knowing the prices they are paying to hard working employees?

Posted by at

2 comments:

  1. UnknownFebruary 8, 2013 at 7:32 PM

    Outsourcing and the difference between the cost of the product and the wages of employees is not the only point that can be made. In 1960, the average chief executive earned 40 times as much as the average worker. By 1990, the average CEO earned 107 times as much. In the following decade, this ratio rose to 525:1 before settling back to 301:1 in 2003. Chief executives play an important role in the success of their business, but without the employees in the trenches there would be no company.
    Should this pay gap be smaller?

    ReplyDelete
  2. Heather YoungFebruary 8, 2013 at 9:40 PM

    I do believe that this is unethical to have such a difference in the cost of a product to what the product is sold for. Not that this is an excuse for what the corporations are doing but the economies of scale are probably different in those countries. This does not account for the poor conditions in which the workers there are possibly subjected to. It ties in with corporate social responsibility; both at the level that the corporations are not supporting the economy which their customers reside in and are not really improving the area around where the outsourced factories are. Do you think that corporate responsibility should extend to the community where the outsourced work is?

    ReplyDelete

Subscribe to: Post Comments (Atom)