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A Competitor Firm Has Outsourced Its Production Abroad. You Could Do The Same. You Are The Major Employer In The Town Where You Are Located. You Have To Decide Whether Also To Outsource Your Production

2065 words - 9 pages

Good Business Bad Business and Sustainability
The coursework is to complete a discussion of an organisation, policy, or product and evaluate the ways in which the object could be regarded as ‘good’, and ‘bad’. You may choose a specific case to evaluate; or build a hypothetical case using suitable real world examples.

A competitor firm has outsourced its production abroad. You could do the same. You are the major employer in the town where you are located. You have to decide whether also to outsource your production.

Introduction

The industry that my firm operates within is the winter clothing industry. The company supplies clothing to multiple clothing retailers across the U.K ...view middle of the document...

If I were to outsource the labour it would be outsourced to Bangladesh due to its minimum wage being 3000 Taka per month, which exchanges to £22 also Bangladesh is closer than the alternatives, which therefore decreases carbon emissions and cost of transport. On the other hand the other option is to keep our labour force and find other means to stay competitive. This is the issue I am going to address in this report. I will try to address every issue using ethical theory and approaches to try and deduce the right decision to make.

Utilitarianism

Utilitarianism is the view that an action is morally right if it results in the greatest amount of good for the greatest number of people (J. Bentham 1815). When looking at this approach we have to take in to account all of the organisations stakeholders. The utilitarian approach is simply a balance of good verses evil; pleasure versus pain. Utilitarianism has a few issues especially within this context where we are trying to remain competitive. Where utilitarianism is concerned, trying to maximize economic value can lead to three difficulties. Firstly increasing the inequalities between people and between groups. Secondly it puts too much emphasis on material wealth and economic value creation, and therefore neglecting other aspects of well-being. Thirdly utility is usually considered in atomistic terms, paying little regard to the norms prevalent in more collectivistic cultures (Renouard 2011). When looking at my case the main stake holders we have to take into account are the current factory staff, the prospective Bangladeshi staff, the local Brackley community as a whole, The local Bangladeshi community, the share holders, the customers, and Global environment as a whole as it effects us all.
The move over to Bangladesh will mean that the 2500 factory workers in Brackley will obviously be out of work. This is obviously a strong negative and will have knock on effects through out the community, as there will be less money circulating in the town. However for the Bangladeshi community it will have positive effects due to the extra 2500 jobs. Due to the far lower standard of living in Bangladesh it could be argued that these jobs are more valuable to the Bangladeshi’s. For the shareholders who’s main desire is to receive maximum gains on their investment outsourcing labour would be preferable as it would maximize contribution per unit and therefore profits and return on investment.
The main interests of the customer are lower priced products, which the outsourcing of labour will achieve. However the outsourcing of labour could be seen as unethical due to the loss of jobs and the very low wages the Bangladeshi’s receive. This would not be in the interest of the customers who trust us as a brand due to our moral and ethical codes.
The company would have a much larger carbon footprint if we decided to move due to the extra transport and the emissions from the vehicles used.
Therefore...

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