Introduction
One interesting aspect to take note of has been the current trend in global outsourcing and how it has contributed to the dilemma of breakdowns in integrity and ethical behavior for employees within the global economy.
When a company outsources various aspects of its operations whether in the form of production, customer service, human resources management, accounting or a variety of other possible departments that can be outsourced it runs the risk of having its operational procedures exposed to local business cultures within the outsourced location that have a decidedly different way of interpreting integrity and ethical standards of operation.
For example, corporate social responsibility (CSR) is a form of internal self-regulation by companies which is integrated into business models to ensure that they comply to a certain degree of ethical standards, business norms and laws when conducting methods of operations (i.e. manufacturing, consulting, provision of services etc.).
In the case of China, which is one of the most sought after destinations in the world for outsourcing manufacturing services, the business culture within the country considers CSR to be a foreign and “alien” concept and it shows as evidenced by the sheer amount of CSR violations which have adversely impacted the local populace (Wong, 2010).
Lack of Corporate Social Responsibility
What must be understood is that the main goal of CSR is for the company to embrace a certain degree of responsibility for its actions and through this create a positive impact on its employees, local communities, consumers and the environment.
It is one of the main ethical tools used by corporations to ensure that its actions are restrained to a certain degree so as to prevent the company from entering into lines of business or engaging in certain business practices that can be considered ethically ambiguous and an affront to moral integrity.
As reported in the case of China through numerous environmental, business and community investigations the lack of CSR standards within the country has resulted in a ridiculous amount of wanton expelled pollutants into the atmosphere which have detrimentally affect the health of hundreds of thousands of Chinese workers resulting in increasing cases of lung related diseases and cancer (Wong, 2010).
Furthermore, lack of CSR has translated into the use of unethical methods of manufacturing such as reported cases of tainted pet food, the use of preservatives meant for human bodies within processed food, deplorable work place conditions and ever increasing work hours without sufficient commensurate pay (Goldstein, 2007).
Companies Facilitating Unethical Action
It is this business environment that companies run the risk of entering into when they begin outsourcing their manufacturing services as such results in their exposure to questionable ethically unsound practices.
For example, no matter how sound the integrity and ethical practices of Company A is if it outsources its manufacturing processes to Company B this results in the process being subject to the ethical standards of Company B and not Company A.
It must also be noted that the main reason why companies outsource in the first place is due to the fact that they want to reduce their cost of operations and at times they look the other way when it comes to questionable practices all for the sake of ensuring that costs are reduced.
This means that unethical practices such as exposing workers to hazardous workplace conditions, low pay and overly long hours are often allowed to continue due to the fact that such methods are thought of as effective methods of reducing costs. What must be understood though is that the ethical actions of a company have a commensurate effect on the ethical actions and moral integrity of its workers.
It was noted in various cases involving outsourced manufacturing facilities in China that in instances where the company utilized unethical actions related to work place conditions workers responded by providing below average standards workmanship.
This involved improper waste disposal, inaccurate measurements, use of too little or too much chemicals in particular formula batches and an assortment of other practices that got worse as the company continued to push them beyond their limits.
Resulting Ethical and Integrity Dilemma for Employees
The inherent problem with outsourcing to locations without proper CSR procedures in place is that it causes a distinct degree of ethical breakdown of not only the company that is manufacturing in that location but of the workers themselves.
Operations become more profit driven than they are market driven which results in greater worker discouragement over what they do which results in them not caring over the possible ramifications of shoddy workmanship (Phillips & Phillips, 2011).
What must be understood is that companies, especially those in the manufacturing industry, have the responsibility of implementing proper methods of CSR since it creates three distinct effects.
First, it encourages workers to develop their own sense of integrity which encourages greater compliance to ethical behavior. Secondly, it encourages the company to comply to set standards of ethical behavior which creates internal policies which workers have to adhere to resulting in greater compliance to ethical action.
Lastly, it creates a positive image for the company within the local community which further compels workers to comply with this particular image.
Even if the manufacturing facility is in China such companies still need to implement proper CSR policies, unfortunately such measures have not been widely accepted within mainland China and such contributes to the loss of integrity of workers over the jobs they do which negatively impacts the products they create.
Upper Management and Outsourcing
Another factor which has contributed to the ethical and integrity dilemma and breakdown within employees in the global economy is the way in which outsourcing has contributed to the way in which upper management within a company has been distanced from the manufacturing aspect of operations wherein products and their methods of manufacture are nothing more than mere numbers.
In other words there is no “human face” attached to the manufacturing process itself and this creates the potential for distinctly unethical forms of behavior on the part of employees in upper management.
For example, the use of sweat shops and child labor is often thought of as one of the most unethical practices that a company can engage in, yet it was seen in various cases involving sporting goods (Nike) and fashion apparel companies (Mary Kate and Ashley) that they did in fact engage in utilizing sweat shops and child labor in order to get products off the line and into stores (Roberts et al. 2006).
What must be understood is that the farther away a method of operation is from the main management group the more likely it is that upper management won’t care how a particular product is produced and instead care about how quickly and cheaply it can be made (Roberts et al. 2006).
While it may be true that there are some executives that do have a certain degree of ethical consideration over how their product is made they are in the minority as compared to the hundreds or even thousands that have relied on unethical outsourcing practices in order to produce their products.
Unethical Practices and the Environment
It must also be noted that unethical methods of manufacturing condoned by management groups are not limited to sweatshops and child labor but also extend to aspects related to the environment.
What must be understood is that environmental regulations, such as those within the U.S., Canada, and certain parts of Europe prevent companies from utilizing certain manufacturing processes that are cheaper but are more environmentally polluting. Unfortunately such laws and regulations are not present in countries such as China and India where a large percentage of industrial outsourcing occurs (Li, 2006).
This results in more companies outsourcing production methods to such countries while at the same time utilizing cheaper yet more environmentally damaging production methods (Li, 2006).
In this particular case it can be seen that the management division of companies knowingly engage in a business practice that is wholly unethical since it results in an action that facilitates environmental damage as well as causes possible health problems for people located in the region where the factory has been setup.
Reference List
Goldstein, D. (2007, July 30). Poison for Profit. Nation. pp. 5-6. Retrieved from EBSCOhost.
Li, X. (2006). Environmental Concerns In China: Problems, Policies, And Global Implications. International Social Science Review, 81(1/2), 43- 57. Retrieved from EBSCOhost.
Phillips, J. J., & Phillips, P. P. (2011). Moving From Evidence To Proof. T+D, 65(8), 34-39. Retrieved from EBSCOhost.
Roberts, D., Engardio, P., Bernstein, A., Holmes, S., & Ji, X. (2006). Secrets, Lies, And Sweatshops. (cover story). BusinessWeek, (4011), 50-58. Retrieved from EBSCOhost.
Wong, A., Fu, L., & Elankumaran, S. S. (2010). Business students’ perception of corporate social responsibility: the United States, China, and India. Corporate Social Responsibility & Environmental Management, 17(5), 299-310.