Ethics Of Outsourcing

Outsourcing is hiring people from outside for the production of the company to cut the costs. Most of its benefits are for the company and not for the people. Companies outsource manufacturing for so many different reasons and one of them are to reduce overhead costs which is utilities that includes gas, electric, and water bill and also labor where different people are assigned to handle certain responsibilities. Another reason is to cut the labor costs because when outsourcing, one can hire staff as needed and on temporary basis, which means lower wages compare to those who are fulltime, who usually gets paid well. However, there are consequences that comes from outsourcing which can be analyzed in three ethical frameworks, such as Utilitarianism,

Johnson states, “utilitarianism is attempting to do the greatest good for the greatest number of people.” Outsourcing is all about increasing the profits and cutting the expenses. It is also beneficial to people in a way because company would produce cheaper goods which means people would be able to afford it at cheaper price and this justifies the purpose of utilitarianism. To get to a conclusion by utilitarian analysis, there are four steps that must be taken. Those four steps include, identifying the problem, look at who would be affected by this, come up with the solution, and look at both good and bad consequences. Action is said to be “morally right” if the advantages outweighs the disadvantages. If talking about moving from one community to another, it has a major effect on middle class families because they lose their jobs and another community gets their jobs. “While local communities compete with one another for investment projects, many of the residents of those communities fear losing their jobs as U.S. companies seek out foreign locations and foreign workers to perform work that traditionally has been done in the United States, generally referred to as outsourcing.” When talking about people losing jobs, that’s unethical because it’s not benefiting the majority of people living in the

It has a very big impact on the job market in the country where outsourcing was created because it’s taking away jobs from that country so people are jobless, but it’s beneficial to the company. This can be morally right or wrong when using Kant’s Categorial Imperative depending on the lens a company uses. It is ethically right if a company produces cheaper goods in the developing country and sell it in the other for less