Under what conditions is it ethically defensible to outsource production to the developing world where labor costs are lower when such actions also involve laying off long-term employees in the firm's home country?

Question

Selah Proctor

Business

5 May, 21:46

Under what conditions is it ethically defensible to outsource production to the developing world where labor costs are lower when such actions also involve laying off long-term employees in the firm's home country?

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Colten · Answer 1

Answer and explanation:

Outsourcing refers to the practice by which companies take their operations to a different country in an attempt to reduce costs or surpass stiff governmental regulations. Among the different costs firms reduce by outsourcing, labor hand is one of the most important. For this approach to be ethical, the countries where the company will start operations should be characterized by a high unemployment rate. Any form of investment to increase job positions will be healthy for such an economy.

On the other side, outsourcing will take away job positions in the country where the firm has its headquarters. In the case of long-term employees, it would be ethical to take their opportunities away only if they are approaching retirement age. It would be suitable to provide a job position to a head of a family in a different country paying that person less or at least the necessary to cover his or her basket of goods than paying high salaries to elder people with no children to support and who are about to retire.