Outsourcing presents a number of difficult ethical concerns for the operations manager. Recently, IBM was faced with the decision of whether or not to outsource technical jobs to India. In considering outsourcing, IBM had to balance potential negatives like job loss against potential profit gains. A Machiavellian look at the ethics of outsourcing and a review of the golden rule reveal that even these simple ethical frameworks only illustrate the complexity of the issue. A practical solution to the
problem may be emerging, however, as firms that experience poor performance through outsourcing are moving jobs back to the United States. Ironically, ethical issues often follow corporations to outsourced countries, as many offshore outsourcing firms are in danger of losing information technology contracts unless they begin to adopt Western ethical standards that protect employees, the public, and customers.
Prior to investigating the role of ethics within operations management, a short definition of operations management itself may be useful. Operations management (OM) involves the initial creation, continued operation, and subsequent changes involving the systems used for producing the primary products and services within a specific organization (McShane). As such, the wide scope of responsibility for operations managers means that these professionals are often faced a number of potentially difficult ethical concerns. In recent years, ethical concerns over outsourcing have proved problematic for those in operations management. In 2003, IBM was faced with the difficult decision of whether to outsource a number of technical positions to India. IBM clearly stood to save money by outsourcing, mostly in reducing the costs of human capital. For IBM, this was a particularly important concern, as the revenue generated per employee has steadily declined in recent years (Cringely).
While outsourcing clearly seemed to be good for the company'...