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Ethics of Offshoring

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on 2 May 2014

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Transcript of Ethics of Offshoring

Other Unintended Consequences
Definition: Practice of basing a company's processes or services in another country in order to reduce costs.
Background Information on Offshoring
Voluntary Monitoring Systems
No recourse for workers
Countries do not share same values
No universal laws governing labor
Ethics in Monitoring Programs
Offshoring Mutually Beneficial?
Offshoring and Social Welfare
Ethics of Offshoring
Ethical Questions Regarding American Businesses Offshore Outsourcing
Governments of Less Developed Economies
Union Labor
Investigating Child Labor
Corporations are facing environmental concerns in direct correlation to offshoring in the IT industry.

Environmental Impacts
Example in Sailkot, Pakistan
Through contracting with third-party companies
Advantage usually found in less developed economies
High need for unskilled labor jobs
Relatively low amount of resources to create jobs
Brief History
1960's American companies look for cheaper labor costs in manufacturing
1970's & 80's Technology and communication improvements make offshoring easier
1990's American Brands like GAP and Nike join in
2000's Many of American Large manufacturers contract production overseas
Cheaper Production Costs
Increased Profit Margins
Cheaper Products for Consumers
Research and Development
Capital can be redirected into domestic economy
Win-Win?
Advantages:
Purpose is to determine some of the
ethical questions
that American businesses must face when offshoring thier labor
Global Market does have negative side effects
How are the effects handled?
Developed Economy vs Undeveloped Economy:
Targeted Social Welfare
Trickle down of resources
Social structure gives power to government
Likely limit the orgainization of labor unions
Ecnonomic pressures
Weak or non-existant labor laws
Political influence of local companies
Foxconn
2006 Reports began to surface
2012 String of suicides in factories
Consumer outcry pushes Apple to hire Fair Labor Association to investigate
No new improvements since 2006
Illegally long hours worked by employees
1996 children 5-11 years old are found to be working indirectly for Saga Sports
Nike, Reebok, Puma, Adidas, Umbra, and UNICEF sign the Atlanta Agreement
Monitoring programs are developed
2000 - children are found in manufacturing facilities again
Manufacturers unaware of children working
Third-Party or Self Monitoring Programs
Ethics of paying a monitoring company
Ethics of self-monitoring
Complications in supply chain
So who is responsible?
It's a Trap!
Evidence of Unreliability
Accuracy of Reports
Higher working standards vs productivity
Cutting corners because there is no law to break
Growth has created an exponential need for energy
Increase in electricity and greenhouse gases
pollution from old equipment that is not recycled
Pollution from manufacturing plants
There is no global law concerning pollution!
Wage Inequalities
Unskilled labor population not better off as previously thought
Strengthening the upper class
Are our solutions to inequality and child labor really effective?
Full transcript