Saving money is not the only benefit of outsourcing manufacturing to China.
It also gives it access to resources and skill-sets that wouldn’t have been possible locally.
Nonetheless, these benefits also come with the ethical dilemma of offshore outsourcing. It is now widely accepted that outsourcing is not just a cheap labor tactic, but also a strategic business decision. However, ethics and outsourcing continue to be burning issues for many businesses who want to make the move to outsourcing.
Understanding Cultural Norms in China
By understanding the cultural sensitivities and how they can affect the outsourcing relationship, cultural differences between the USA and Asian countries can be bridged.
“In the 1980s and 1990s, U.S. companies set aside much of their supply chains for outsourcing. Globalization, technology and the desire for profit made it possible to manufacture parts in one nation, put them together in another and sell them in a third. While controversial in some quarters, outsourcing proved to be expedient and profitable,” explains Doug Guthrie, professor of International Business and Management at the George Washington University School of Business.
Changes have been implemented to avoid having or promoting sweatshops abroad after some major American companies were criticized for not respecting labor laws and human rights in factories in Asia. Not only do poorly treated workers typically make poor-quality goods, but U.S. companies that aren’t careful about sweatshops could face the costly job of reputation repair if a watchdog group links their brands to workplace abuses.
Human Rights and Social and Economic Development
Respect for human rights leads to social and economic development. Businesses that respect labor rights put more money in the hands of workers, helping them to educate their children, live healthier lives, and eventually, inevitably, buy American brands. Americans in general benefit when U.S. businesses act to enhance the rule of law in China. Furthermore, desirable employees want to work for companies whose values they share, just as consumers want to buy from companies that put values into practice
Considering the abovementioned facts, one can conclude that investing in China will probably bring high profits to a corporation and sustainable power for competition. In today’s global business environment, it is of crucial significance for a company to search and discover new potential markets, either for trading or manufacturing. Based on the chain of command, China is the best investment alternative for companies looking for opportunities for growth and to produce with low costs in particular. That being said, companies should comply with labor standards, human rights laws, and pursue the strategy of trying to improve the working conditions in the country in question, in this case, China. If other countries follow suit, not only the working conditions begin to improve and widen throughout the country and also throughout the world, but also the investors and companies benefit and profit from the opportunities of China in compliance with the ethics rules.