The Ethics of Outsourcing

Outsourcing without a doubt has its critics regardless of how it can ensure you remain competitive and reduce costs. The familiar criticisms are often framed in ethical terms.

What Prompts the Outsourcing Ethics Debate?

Technology and globalisation have made it so much easier than ever before to outsource to another country. The key issues in most countries are focused on jobs and it is an emotional and political one. The possibility of “losing jobs to outsourcing” frequently ignites the controversy surrounding outsourcing.
Usually, it de-evolves into a sport like mentality of My team vs your team and becomes an easy target to criticise when a country’s economy is experiencing economic downturns such as “The Great Recession.”
While critics of outsourcing usually attempt to portray outsourcing as the “problem” by speaking of ethical issues, this is simply not true for most companies choosing to outsource they are actively using it as a growth-oriented business strategy to enhance their business and drive prosperity.

Economics of Outsourcing and Ethics

The critical importance of a profit motive for business organisations remains regardless of what some people may say. Making a profit is still the single key driving factor in any business as without that profit the business will cease to exist in its current form.
Strategic decision making by owners and managers should always use this economic wisdom and consider if that strategic decision is profit-orientated. Simply put, what is best for your company’s bottom line?
What is often overlooked when embarking on ethical outsourcing discussion is that any additional profits produced by outsourcing are then frequently allocated to new goods and services in the domestic economy that previously were not able to be made. Really in most cases, it is a “Win-Win Strategy”.

The Social Paradigm of the Ethics of Outsourcing

The greater good. Is outsourcing good for society? What ethically is said is usually different from actuality. In actuality, a capitalist society is more likely to benefit from focused use of outsourcing than to be “damaged” by the strategy.
Nevertheless, “the ethics card” is often played by critics of outsourcing — and this is especially seen within the social paradigm. While government has a genuine role to preserve and improve a society, remember that the mission of corporations in a capitalist society is to make a profit that enables the company to stay in business. What is best for your business? The bigger question for society is what does it mean for your society if your companies are making bigger profits? The downstream effects are clear.

The Environmental Paradigm of Outsourcing Ethics

Environmental considerations deserve attention. Corporations are being asked to take responsibility for labour conditions and environmental standards adopted by some outsourcing vendors. The global supply chain often includes multiple opportunities to do a better job within the environmental paradigm.
Your company can frequently reduce your carbon footprint with outsourcing by reducing domestic travel and communicating electronically with outsourcing providers both locally and offshore. Achieving more with less impact. A “win-win” again.

In the end: Do what is best for your company

When it comes down to it, ethics and business have a murky past at times. Here is the triple bottom line for most companies that are using outsourcing as an effective business strategy:
Economic — Your business can expect to save time and money while improving quality. A ‘Win” for your business and your customers.
Societal — The long-term benefits for society are likely to be on the plus side. A “Win” for the wider society.
Environmental — Reducing carbon emissions and footprints is a practical outcome from your outsourcing. A “Win” for everyone worldwide.
Your company should “run the numbers” and do a cost-benefit analysis by examining the costs versus benefits of outsourcing. What is the best decision for your business bottom line and ethically?