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Global Business and Ethics: Offshore Outsourcing

The globalization and internationalization of businesses has contributed to an increase in the offshore outsourcing of American jobs. Internationalization is focused on multinational corporations (MNCs) that operate in a number of countries. As for globalization, it involves the fact that some organizations not only operate in a variety of countries but that they functionally divide their activities in different countries. For instance, maybe the organization produces one part of a product in one location, another part at another geographic location, and assembles both parts at another location. Even the marketing of those goods could be conducted elsewhere throughout the world while controlling and coordinating all these activities from a home base. With this in mind, the importance of understanding the advantages and disadvantages associated with offshore outsourcing would assists in comprehending some of the ethical issues surrounding this controversial topic.

Businesses that were once solely operating in the United States are now using offshore outsourcing for a variety of reasons. For example, offshore outsourcing would allow the organization to focus not only on core activities but also streamline business operations; access to professional capabilities; shared risk; frees up human resources and cash flow; allows for business flexibility. For instance, China and India offers cheap labor with adequate resources for sustaining businesses around the clock due to the time zone differences, thus improving on productivity while lowering the costs of production for many American based businesses. Other benefits include increased productivity, knowledge sharing, costs savings, and world-alliance which may increase peace because of joint and proactive problem solving and innovation.

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