ethical issues of offshoring/outsourcing
DESCRIPTION
TRANSCRIPT
![Page 1: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/1.jpg)
Ethical Challenges with Offshoring
Karlis LucsAndrejs PašņevsGurubhaskar C.Vishal Verma
November 22, 2012Riga Business School, Riga LV
![Page 2: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/2.jpg)
Why are we here?
Offshoring brouhahaDifferent stakeholders, expectations
No one approach is right
![Page 3: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/3.jpg)
3 things
JobsWorker conditions
Environment
![Page 4: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/4.jpg)
1st issue: Job Export
![Page 5: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/5.jpg)
What do the people think?
Loss of jobs = unethical move
![Page 6: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/6.jpg)
What does media say?Goldman Sachs is set to cut 250 jobs across its
global operations as it moves some work to India.
Tax break fuels anger over outsourcing-related layoffs in Fla.
Forrester Research: Outsourcing jobs outflow estimated to hit 3.3 million by 2015.
![Page 7: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/7.jpg)
What do economists say?
Short term job loss = cheaper goodsCheaper goods = more money savedMore money saved = More money
spent elsewhereMore money spent = new jobs
![Page 8: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/8.jpg)
What’s the truth?
Semi skilled workers – worst affected1/3 No job
1/3 Less money1/3 Life’s the same!
![Page 9: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/9.jpg)
What’s the truth?
Lose-Win?China ≈ Germany
min 25k yuan/yr - 77% (2008) 10% (2015): FDI(2003) = 82x FDI(1983)
![Page 10: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/10.jpg)
What’s the truth?
Offshorers ≠ Biggest job creators (2% - 1990 - 2008)
Increased efficiency = More hirings than layoffs
(2000 – 2007)
![Page 11: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/11.jpg)
What’s the truth?
Low unemployment?1983-10.4%, 1992-7.3%, 2008-5%
SMEs save the day
![Page 12: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/12.jpg)
So what’s the conclusion?
Offshoring ain’t all that bad.
![Page 13: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/13.jpg)
2nd issue: Work conditions
![Page 14: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/14.jpg)
What do people think?
Offshoring = bad work conditions = unethical
![Page 15: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/15.jpg)
What does media say?
Forced to stand for 24 hours, suicide nets, toxin exposure and explosions': Inside the Chinese factories making iPads for Apple
H&M, Walmart, Abercrombie & Fitch, the Gap, Nike, Limited Brands, Calvin Klien, Phillip Morris, Victoria’s Secret, KYE, Forever 21,
Aeropostale, Toys ‘R’ Us, Hershey’s
![Page 16: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/16.jpg)
What’s the truth?8 Samsung factories
>100 hrs overtime; 36 hrs legalSalary = ½ overtime money
Standing work – 11 to 12 hrsNo labor contracts
![Page 17: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/17.jpg)
What’s the truth?
10 Foxconn factories>50% dispatch workers
Local min. wage300 hrs/month
Max median age: 32
![Page 18: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/18.jpg)
What’s the truth?
Top 10 factoriesMin. wage not sufficientOvertime = 36-160 hrs
Exceedingly high labor utilization; one action every 3 seconds
No labor contracts1/3 workers < 18
![Page 19: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/19.jpg)
Here’s the proof
http://www.youtube.com/watch?v=pOg8QbKEkL8
http://www.youtube.com/watch?v=Jk-xqPKOxl4
![Page 20: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/20.jpg)
What do the workers feel like?
Chinese least job-satisfied among Asians despite max. jobs
Only 49% consider their job ideal
![Page 21: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/21.jpg)
So what’s the conclusion?
Offshoring hurts people.
![Page 22: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/22.jpg)
3rd issue: Environment
![Page 23: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/23.jpg)
What do people think?
Offshoring = bad environment = unethical
![Page 24: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/24.jpg)
What’s the truth?
Top CO2 emitters: China, US, EU, India, Russia
![Page 25: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/25.jpg)
![Page 26: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/26.jpg)
![Page 27: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/27.jpg)
What’s the truth?
Offshoring = low CO2 emission from US
![Page 28: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/28.jpg)
What’s the conclusion?
Offshoring = Movement of carbon footprint
Offshoring = Pollution anyway!
![Page 29: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/29.jpg)
4th issue: There is no 4th issue
![Page 30: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/30.jpg)
Final Picture+ve stakeholders -ve stakeholders
Jobs Companies (short run) Home people (short run)Home people (long run)Host peopleHost govt.
----------------------------------------------------------------------------------------------------------------------
Worker Home businesses Host peopleConditions
-----------------------------------------------------------------------------------------------------------------------Environment Home businesses (short run) Everyone
Home people (short run)
![Page 31: Ethical Issues of Offshoring/Outsourcing](https://reader033.vdocuments.mx/reader033/viewer/2022061210/54904f29b479594c358b4794/html5/thumbnails/31.jpg)
Thank you!