It is important to explore the ethical perspective of business outsourcing concept as is argued that there are both pros and cons in outsourcing external parties for business activities. Outsourcing is the organizations’ practice to hire an outside individual or a company to get a task done without assigning it to internal employees. This habit of outsourcing has become a major practice in the modern business world.
Outsourcing is done due to different reasons. Cost-saving and specialized knowledge requirements for relevant tasks are the two main reasons for business outsourcing implementations in many organizations. As the business activities are getting more and more complex, organizations tend to depend more on outsourced skills than on internal employees.
This brings out a question about the ethical perspective of the business outsourcing process. Since outsourcing leads to more cost reductions and employee layoffs, the topic of the ethical perspective of business outsourcing takes major importance.
There is an open argument in the business industry that business organizations have a moral obligation to protect their employees, employee benefits, and assure their job security. However, as a habit, organizations have the practice to balance the quality of their production and affordability to the target customer base. Since all organizations are not international, domestic-based companies have to put extra care about the cost of the production in order to face the competition and survive in the industry.
This leads them to hire external individuals or companies to get specific processes done rather than hiring full-time internal staff for the process. There can be instances that the tasks need to perform only several times in the entire production process. In a situation like that, it is not necessary to go through the entire recruiting process to hire internal employees but the organization can simply outsource the tasks to someone who has the expert knowledge in performing the task.
This does not consider as unethical as the purpose of the business is to get the task done quickly with a minimum cost and effort. It can be considered as a fair decision as it does not involve breaching any kind of employee rights. The ethical perspective of business outsourcing can back up situations like this as fair scenarios.
Another situation that brings the ethical perspective of business outsourcing into the discussion is the ‘sweatshop‘ problem. This is identified as one of the negative aspects of outsourcing. It is considered as the reason for most of the companies to outsource process activities especially in the businesses that are operating at the international level. The countries with higher labor costs tend to outsource their activities to countries with low labor costs. This can lead to unfair wage distribution and labor exploitation. It is also identified that they provide poor working conditions for outsourced employees and create unhealthy working situations.
This creates major issues in the economy that the businesses are outsourcing their activities to the countries with low labor costs. This leads to laying off employees in the organization as it is costly for the company to keep the employees with a higher salary. This is considered as unfair as the qualified employees are getting unemployed due to the company’s cost-saving plans.
In general, the business practices and values considered as organizations should provide employment security and motivate employees to stay with the organization for a long time while enjoying growth and more knowledge. Laying off employees due to outsourcing the processes is not considered an ethical behavior of organizations as it can lead to many adverse impacts to both the individuals as well as to the economy.
When considering the ethical perspective of business outsourcing, it is clear that the outsourcing process has its own pros and cons in ethical behavior.