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Blog Posted in avatar   Maria Elisa Anacay's Blog

Outsourcing: Morally upright or morally revolting?

By Maria Elisa Anacay
Posted Apr 25, 2013 in Business
While the influx of criticism mounts against the Royal Bank of Canada, more and more people are questioning the wisdom of outsourcing. Is it moral to have foreigners carry out tasks that are normally performed by the locals? The population's reaction to outsourcing could be summed up by the words of Senate Majority Leader Harry Reid when he eloquently made his displeasure known in regards with the U.S. Olympics apparel. The official apparel bore the label “Made in China” which sparked a very interesting discourse from the Senate Majority leader. He was quoted to have said “We have people in America[,] in the textile industry[,] who are desperate for jobs. What the Olympic Committee did is absolutely wrong.”
Yet is it true that outsourcing is a morally revolting business practice? Not so, according to How to be Profitable and Moral: A Rational Egoist Approach to Business author Jaana Woiceshyn. Woiceshyn recently wrote in the Financial Times that outsourcing is “moral” because it enables banks to be competitive, which in turn helps these institutions provide service at affordable prices. Similarly, she argues that outsourcing is moral since it benefits the bank, its employees, its clients (both businesses and individuals), and the economy. How so? She introduced this cycle wherein the bank is made more profitable and competitive by outsourcing its workforce; the employees benefit as the bank continues to thrive and utilize their services; clients explore the benefits of competitively priced financial services; and the economy experiences positive cash inflow thanks to the number of successful deals brokered by the bank. Using Woiceshyn's model clearly depicts how outsourcing could benefit an organization and by extension, benefit the country as a whole.
Both sides made valid arguments. However, they don't answer if outsourcing is moral or immoral. As such, let us look at the arguments made by the Forbes' Adam Ozimek.
Ozimek wrote a dialogue between a Mr. Fear (the People) and Mr. Trade (the Businesses). In Ozimek's article, Mr. Trade likened outsourcing to providing charity to poorer nations by helping these countries become richer. The citizens of these developing nations are then lifted out of poverty because they can live more comfortably. As Ozimek writes, outsourcing could be as simple as a simple consumer donating money to China instead of going to the movies. It is not about stealing American jobs.
Yet Reid's comments imply that people believe that they have a moral claim on the jobs that are being offshored to other countries because they are Americans and they need to earn money. Doing so is very un-American of them seeing that this goes against the very core of the nation: namely, the Declaration of Independence which emphasizes individual rights: a person's rights to life, liberty, and the pursuit of happiness.
By echoing the American constitution, one can argue that outsourcing is a moral business practice. Since the constitution highlights individual rights, then it goes to follow that businesses have the right to outsource their business processes as this would help them make more money. After all, a businessman's primary goal in life is not to create a significant number of jobs for the American public, but to earn enough to keep his family's comfortable lifestyle. Is he selfish? Well, it's his intrinsic right.
The same principle suggests that each person is responsible for his own happiness. In this case, if there are no jobs in a worker's area, then that person can move to another borough where there are more jobs and where the standard of living is not as high as in most metropolitan areas. Similarly, the concept of free trade enables businesses to outsource jobs wherever they can produce more products and be cost-efficient.
Yes, outsourcing is a moral business practice. It helps developing countries and enables businesses to earn more, which in turn benefits the economy and the country's population.

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