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Should We Sweat About the Sweatshop?

Right from its conception in the 1980’s, Outsourcing has been a debatable issue and it can be viewed as a double-edged sword. It may be defined as a subcontracting process which hires a third-party company to perform some specific operations of the business. It has done with the intention of better utilization of time and energy expenses, focusing or conserving energy aimed at the core abilities of a particular business. Today, there is a huge furor against sweatshops in China and Vietnam but oppositions of sweatshops tend to forget that sweatshops in these countries mean employment for the workers and freedom from hunger. (Wilson, 2005)

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There are two sides of supporting sweatshops in China and Vietnam. The first is the side of the outsourcers. Companies today that are deciding to outsource previous in-house jobs to individuals overseas with equivalent skills and abilities that live where the cost of living is less and, thus, will accept much lower salaries. Therefore, the corporations are getting the same work done, often with the same quality, for substantially less cost. These decisions touch on many ethical concerns–the obligation the corporation has to current employees, the communities it will impact, the fairness of wages, the concern for stockholders, etc. (Singh, 2009) From the perspective of the outsourcers it is obvious that the company makes a huge profit margin by the dint of low cost per item whereas from the stakeholders’ point of view relation with outsourcers means constant source of work with comparatively better and secured payment mode. Thus, it is beneficial for the companies to support sweatshops. (Lievens, 2008)

On the other hand, the workers benefit from the sweatshops too. The three prime stakeholders of sweatshop operators at the present day could be enumerated as China, Taiwan and Vietnam. These low-income group countries make the most of the value rendered by US dollar and thus receive a better return of their investments. This return becomes even more vital with the low living standard of these countries thus the marginal utility of the value gets even more heightened. Thus, it could be seen that the relation between the stakeholders and the company is bilateral and beneficial for both the parties. (Kobayashi-Hillary, 2006)

Moreover, with the alleged labor camps, or sweatshops, like factories in South East Asia is certainly beneficial for Asians and none can enumerate better than this illustration as presented by Johan Norberg in his famous article ‘‘Why Not Globalization? For Third World workers like Tsi-Chi, a job with a multinational means prosperity, not exploitation’ in 2005. He mentions, “…eight years ago, when Nike was established in Vietnam, the workers had to walk to the factories, often for many kilometers. After three years, they could afford bicycles. Another three years later, they could afford scooters. Today, the first workers can afford to buy a car.” (Norberg, 2005)

Thus, the point made clear by companies in this context was obviously something to be convinced of. If that is not important or enough for many activists it could be mentioned that if this is an illegal move by the companies then at least the workers are not complaining at any circumstances. Moreover, this move could be regarded as the price of globalization if at all there is a price involved in it. For the South East Asians the presence of outsourced materials and sweatshops are job assurance and not labor camp.

References

Kobayashi-Hillary, M. (2006). Outsourcing to India: the offshore advantage. NY.

Lievens, F. (2008). Development and test of a model of external organizational commitment in human resources outsourcing. Human Resource Management, 47(3), 559-579.

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Norberg, J. (2005). ‘Why Not Globalization? For Third World workers like Tsi-Chi, a job with a multinational means prosperity, not exploitation’. Web.

Singh, S. (2009). How market orientation and outsourcing create capability and impact business performance. Thunderbird International Business Review, 51(5), 457-471.

Wilson, S. (2005). The black book of outsourcing: how to manage the changes, challenges, and opportunities. London: John Wiley and Sons.

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