An Ethical Dilemma of Offshoring
University
International Management
MGNT 4500
February 26, 2013
An Ethical Dilemma of Offshoring
Offshoring is defined as a “value added activity that is geographically dispersed around the world, even for a single firm, to take advantage of the best locations and modes to perform certain activities.” (Peng, 2011, p. 54) Unfortunately, there are numerous ethical dilemmas associated with offshoring that can damage the reputations of these businesses that choose to do so. One of the dilemmas is the poor treatment of the overseas workers.
In the United States, there are strict labor laws that regulate wages, benefits and working conditions. Overseas, wages are much lower, benefits are non-existent and working conditions are often inhumane. Independent Unions are nonexistent. Many of the products purchased by consumers are manufactured by offshore workers whose rights are ignored in serious ways. Sweatshops are a product of the global economy and free trade. In general, a sweatshop can be described as a workplace where workers are subject to extreme exploitation, including the absence of a living wage or benefits, poor working conditions, and arbitrary discipline, such as verbal and physical abuse. Since sweatshop workers are paid less than their daily expenses, they are never able to save any money to improve their lives. They are trapped in an awful cycle of exploitation. Companies increase profits by driving down costs any way possible, so they set up low-cost factories. To minimize costs, companies look for places with the lowest wages and human rights protections. Sweatshops can be found all over Central and South America, Asia, and certain regions of Europe.
Under pressure, some U.S. corporations have attempted to reach minimum-wage and overtime agreements with outsourced businesses. Some have even set guidelines for humane working conditions and conducting inspections of factories. Unfortunately,...