What are the ethical concerns involved in outsourcing?


By Harshvardhan, the Subject Matter Expert at Edumarz

Solution: Outsourcing is yet another trend that is radically reshaping business. Outsourcing refers to a long-term contracting out generally the non-core and of late even some of the core activities to captive or third party specialists with a view to benefiting from their experience, expertise, efficiency and, even investment. This simple definition leads one to the salient features of the concept that are not peculiar to an industry/ business or country but have become a global phenomenon. 

It will not be out of place to be aware of some of the concerns that outsourcing is involved with:-

  1. Confidentiality: Outsourcing depends on sharing a lot of vital information and knowledge. If the outsourcing partner does not preserve the confidentiality, and, say, for example, passes it on to competitors, it can harm the interest of the party that outsources its processes. If outsourcing involves complete processes/products, there is a further risk of the outsourcing partner starting up a competitive business.
  2. Sweat-shopping: As the firms that outsource seek to lower their costs, they try to get the maximum benefit from the low-cost manpower of the host countries. Moreover, it is observed that whether in the manufacturing sector or the IT sector, what is outsourced is the kind of components or work that does not much build the competency and capability of the outsourcing partner beyond the skills needed to comply with a rigidly prescribed procedure/ method. So, what the firm that goes in for outsourcing looks for is the ‘doing’ skills rather than the development of the ‘thinking’ skills.

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