orable tax breaks if they relocate some company operations across the borders1.
Communications and transportation technologies have also improved to such an extent that mobile and transferable production facilities are now possible. Such a highly competitive environment forces the lowest possible cost of production, given the tendency of competitors to undercut each other in order to secure business. According to Rosen Sharma, CEO of Solidcore, a startup company that makes backup security systems for computers in Silicon Valley, states that if he does not outsource, venture capitalists these days would not fund a single nickel. He also says that "as a business, you have to stay competitive. If we don't do it (outsourcing), our competitors will, and they're going to blow us away.2"
The basic premise behind outsourcing is reasonable and justifiable because corporations have a legitimate interest in self-preservation, and in offering competitive prices to its consumers. They also have a fiduciary responsibility to provide a reasonable rate of return to shareholders who assume risk by buying its stock. Unfortunately, outsourcing activities often involve the retrenchment of local, and usually more expensive, employees replacing them with contractors or foreign workers.
Therefore, outsourcing presents a very unpleasant and unethical social aspect of the company when it attempts to reduce overheads at all costs in order to remain competitive. Although outsourcing may be in the best financial interests of the company, it seems to deprive local employees of their 'rightful' jobs. Even the use of cheaper contractors in the local country seems to have an immoral flavor because it seems to avoid liability and care towards the original employees. Furthermore, the use of cheaper foreign workers in other countries usually entails a lowering of environmental and labor standards that are normally enforced in the local coun...