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Ethical Impact of Outsourcing

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Submitted By WillJPearsall
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Ethical Impact of Outsourcing
Will Pearsall
June 17, 2010
MGT/216
Vicki Dixon

Ethical Impact of Outsourcing
Over the last few years it seems almost impossible to read a newspaper, turn on the TV or call a customer service representative without noticing one of the most growing trends in business, the outsourcing of jobs overseas. Due to its political and economical ramifications we witness numerous debates on the topic. Although it makes economical sense for companies to contract the cheapest labor, the movement of jobs to other countries presents an ethical dilemma. In this paper I will discuss the impact of outsourcing across cultures as well as the consequences faced by companies that decide to employ it.
According to Credo reference (2004), “outsourcing is the term used to describe the practice of subcontracting certain services to an organization or company outside of the parent organization or company.” Subcontracting of specialized jobs has been a common theme in the US and has positively impacted our economy. It allows companies that are not adequately skilled in a specific task to hire a company that is. It is common in industries like health care, manufacturing, and information technology. However, with the explosion of globalization over the last decade, we have witness this trend shift to negatively affect our domestic workforce. With growing competition and increased pressure from stakeholders and shareholders to increase profit margins, companies are compelled to gain any competitive advantage they can. The focus of companies has moved from cost reduction for competitive advantage to providing a quality product at a cost relative to the competition (Goddard & Ajami, 2008). This shift in focus has caused companies to seek ways to make and support their products with the least cost to them. The natural solution for companies is to contract…...

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