The Ethical Dilemmas of Offshoring

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Off-shoring labor for business entities and profit management has posed significant controversies. Certain decision-making processes have been evidenced to have greater implications for both employees and employers. In this case, business organizations are virtually limited by laws and regulations, and profits. For instance, a successful firm is one that operates within the legal framework of a given society and makes a profit regardless. However, in certain circumstances where a decision may be within the stipulated lawful act of a corporation, the making of a verdict does not necessarily mean that such a decision is right (Shevchenko, 2021). Therefore, it is important to appreciate various ethical principles required in decision-making processes that aim to safeguard a business, its employees, and the owner. Using utilitarian theory and virtue ethics, the present study explores the ethical principles and their arguments to inform a clear decision to make in the case of Deanna’s dilemma.

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Deanna, the Operations Manager for Mergeron, is in an ethical dilemma regarding a decision to make for off-shoring labor. Mergeron is a textile manufacturer of clothes based in a small town in the U.S., with close to two thousand workers. The firm is known for manufacturing organic-based clothes that are produced by local farmers. Recently, the total profits for the company have been on the decline due to increased cost of production, though with favorable sales output. The manager is conscious of a Chinese location where skilled and cheap labor is available, which would decrease the cost of production for Mergeron. However, she is also cognizant of Chinese cotton, which is organically produced. In this regard, she has to decide on whether to off-shore labor for Mergeron or not.

Based on the theory of Utilitarianism, off-shoring labor could easily be justified in the case of Deanna. According to the Utilitarian theory, an action is justifiable if such decisions made provide the greatest degree of good for the most amounts of people (Marseille & Kahn, 2019). However, in the present case, off-shoring labor has several drawbacks. For instance, the local farmers would lose their customers to China. Moreover, more than two hundred workers would be laid off because of such actions. Conversely, off-shoring labor also has positive outcomes. For example, the workers where the location of the cheap labor has been identified would be beneficial to the Chinese locals. Since they are known to produce cheap labor, it is evident that the relocation of Mergeron would greatly impact employees’ lives positively. Consequently, the company would also increase in sales and make significant profits, resulting in Mergeron’s growth in whichever location the company would decide to station its headquarters. As such, the laid-off workers from the small town in the U.S. may get rehired at the new Mergeron in China as a result of the company’s growth and expansion.

However, based on virtue ethics, a right deed is the act a moral individual would do in the same situation. In essence, virtue ethics theory values a moral behavior that makes an action good by nature (Tsoukas, 2018). Rather than consenting to the effects of an action to govern whether it is ethical, virtue ethics posits that certain actions are good and right innately (Shevchenko, 2021). In virtue ethics, fidelity entails that people serve other people closer to them with special care (Tsoukas, 2018). Therefore, applying virtue ethics in the case of off-shoring labor, Deanna might decide not to move forward with such a decision. If she unequivocally decides to off-shore labor to China, the direct consequence to the small town in which Mergeron is based would be devastating. In this case, the two hundred lay-offs would lead to many families in the small town to poverty. Furthermore, since virtue ethics encompasses such values as justice, honesty, fidelity, and prudence, off-shoring labor would mean using non-organic cotton, thus lowering the reputation of the company, subsequently leading to the sacrifice of such values.

In conclusion, despite the utilitarian approach providing a convincing argument, the direct negative effect on Mergeron’s local workers must be considered. In essence, to lay off workers to provide the same work to an off-shore country would result in several uncertainties. For instance, the quality of the clothes would reduce significantly due to poor cotton quality resulting from non-organic production. In this regard, the company is uncertain of its market reputation and reception when its customers learn that they manufacture clothes from non-organic cotton. Moreover, the company would face such challenges as unethical staffing of new employees in a foreign country who only believe in the company’s vision and missions. Therefore, as a result of the several uncertainties regarding the ethical outcome of off-shoring, the best decision is to use virtue ethics. Through it, the firm can be guided on how to seek funds to offset its financial difficulties, yet remain to conduct its businesses virtuously. Additionally, the workers might agree to pay cuts to ensure that the company remains stable during difficult financial challenges.

References

Marseille, E., & Kahn, J. G. (2019). Utilitarianism and the ethical foundations of cost-effectiveness analysis in resource allocation for global health. Philosophy, Ethics, and Humanities in Medicine, 14(1), 1–7.

Shevchenko, S. Y. (2021). Ethics of uncertainty as an extension of virtue epistemology: The case of genetic risks. Epistemology & Philosophy of Science, 58(1), 161–177. Web.

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Tsoukas, H. (2018). Strategy and virtue: Developing strategy-as-practice through virtue ethics. Strategic Organization, 16(3), 323–351.

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