Operations Management and Outsourcing
Outsourcing presents a number of difficult ethical concerns for theoperations manager. Recently, IBM was faced with the decision of whetheror not to outsource technical jobs to India. In considering outsourcing,IBM had to balance potential negatives like job loss against potentialprofit gains. A Machiavellian look at the ethics of outsourcing and areview of the golden rule reveal that even these simple ethical frameworksonly illustrate the complexity of the issue. A practical solution to theproblem may be emerging, however, as firms that experience poor performancethrough outsourcing are moving jobs back to the United States. Ironically,ethical issues often follow corporations to outsourced countries, as manyoffshore outsourcing firms are in danger of losing information technologycontracts unless they begin to adopt Western ethical standards that protectemployees, the public, and customers. Prior to investigating the role of ethics within operationsmanagement, a short definition of operations management itself may beuseful. Operations management (OM) involves the initial creation,continued operation, and subsequent changes involving the systems used for
Few managers would wish their jobs to be outsourced. plant (Turrettini) Overall, "there isevidence that now emerging firms are rethinking outsourcing and that theyare now manufacturing in the United States products previously outsourced"(Melnyk and Swink). Instead, the American people focus on the cost of outsourcing to Americanworkers as the most important ethical consideration (Breslin). For IBM, this was a particularly important concern, as the revenuegenerated per employee has steadily declined in recent years (Cringely). While the outsourcing trend as seen with IBM has certainly met with agreat deal of negative reaction in the U. In an interesting twist on the outsourcing debate, many offshoreoutsourcing firms are in danger of losing information technology contractsunless they begin to adopt Western ethical standards. net, "If we stay silent, then welegitimize bad practices and cause long-term damage-not just in the areaswhere our outsourcing work is being performed, but for our customers tooand discredit the outsourcing process as a whole" (Mitchell). The Golden Rule may also play an interesting role in outlining theethical considerations of outsourcing. Operations managers at companies likeIBM must balance the financial benefits of outsourcing with the potentialnegatives of job loss and damage to corporate image. In recent years, ethical concernsover outsourcing have proved problematic for those in operationsmanagement. Breslin argues that corporations often make decisions based on theMachiavellian argument that "the ends justify the means. Clearly, putting managers to this test inregards to outsourcing may result in the stoppage of outsourcing to othercountries. The humancosts of outsourcing are particularly high, as laid-off employees faceunemployment, and loss of retirement and health benefits (Breslin).
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Acceptance Essays
