Outsourcing Ethics

Offshoring businesses or parts of businesses is fast becoming one of the most successful and popular methods of initiating profit-making changes into modern businesses.

Legality and ethics play a major role in the success of an outsourcing opportunity, with the moral and ethical dimensions of the practice becoming more complicated than ever before as increasing numbers of parties are involved in the overall chain.

Ultimately the choice comes down to the right and wrong person to do business with in a foreign country, as well as the correct outsourcing methods and practices to be utilised. The basic nature of outsourcing, by which a unique supplier relationship is built based on a service that is specifically integrated into the customer's business, means that the outsourced workers are an integral part of the supply chain and each individual company's system, and are regarded as such.

However, one of the main sticking points regarding the ethics of outsourcing revolves around the same points as overseas "sweatshops", in that both utilise inexpensive and abundant labour forces in foreign countries, which compete with local workers in the company's own country and results in job loss.

Also, more strikingly, the notion of poor standards in some of the major outsourcing countries such as India, China and south-east Asia mean wages and conditions for workers could seem outdated and even horrific by western standards, creating an uneasy acceptance of the outsourcing model for ethical reasons.

Conversely, however, there is the argument that sending work overseas rather than keeping it confined to often sections of just one country, creates a much healthier global economy, spreading work and trade around the world where the expertise and skill of several nations can be compiled into one end product.

The ethical compliance between two companies working in an outsourcing model is also vital. Ethical compliance exudes a strong public image from the company, and it makes much better business sense to be in an ethical relationship with a supplier than to be in an unethical one.

For instance, if legal issues arise between the two companies involved in the outsourcing, it can be much easier to resolve them if the two have not only a legal, but also a moral and ethical obligation to comply with their agreement, as well as international law.

Unethical partnerships suffer from a lack of trust; often resulting in a strained relationship based on the non-disclosure of facts and general guardedness and lack of transparency on both sides. Of course, when indulging in an ethical partnership, there is the benefit of reduced risk, costs and proper management systems, based on mutual trust and a shared interest in terms of company focus and client responsibilities.