Outsourcing labour is meant to be cost effective for a firm. This is because labour in America is expensive as compared to another place while the quality is the same or even better (Johnson, 2010). The fact that the Ohio Art company was going through a financial crisis was enough reason for them to seek to minimize costs. Outsourcing is somehow similar to franchising; the same treatment that employees get in the mother firm should be given to employees in an outsourced firm. This was the sole responsibility of the Ohio Art Company. This means if the employees are not paid below the recommended minimum wage and have good working conditions, the same should be done to the employees in the outsourced firm (Johnson, 2010).
Before outsourcing with any firm, Ohio Art should have conducted research on the ethical reputation of the firm. This means if Ohio Art does not completely advocate for poor working conditions, underpayment and labourer’s mistreatment then it should not couple up with a firm that has had that reputation. As much as outsourcing is all about working within a strict budget, the labourer should not be on the losing side. It will cost the firm much more to correct a negative PR and image than it would have taken them to ensure the working conditions are good (Johnson, 2010). It may even be a mark that cannot be changed and this will make the firm to experience low sales and eventually shut down.
The fact that Ohio Art Company claims that it was not aware of the mistreatments of the labourers, is not true. This is because having transported all their expensive equipment there, they must have had supervisors stationed there to ensure that the equipment is used appropriately or even to train people on how to use the equipment.
Johnson Debra, Turner Colin,(2010), International Business: Themes and Issues in the Modern Global Economy, Prentice Hall Press, New Jersey
There are some very important steps that a firm should take before and after outsourcing labour from other countries. Before outsourcing the firm investigates the where operational costs would be less, once that is discovered they should evaluate the minimum wages, working conditions and overtime payment set by the country they intend on going to (O’Toole, 2013). This should be followed by evaluating the working conditions offered to employees in the mother country and what they would like to offer. Then draw up a budget. After this, they should look for a company to outsource to whose work and business culture and ethics are similar to theirs (McIvor, 2005). A proper investigation should be conducted at this point to ensure no mistake is done.
After a company has been found and production begins there should be supervisors who are stationed there to ensure the working conditions are as per expected. This is because when a firm seeks to save a lot of operational costs they end up ruining the reputation that may not be amended (McIvor, 2005). A good victim was the Nike sports shoe company that fell from its times of glory to not making enough to sustain the company. Years down the line Nike as a company is still struggling with trying to rebuild its reputation, but this has come from experiencing losses.
McIvor Ronan, (2005), The Outsourcing Process: Strategies for Evaluation and Management, Random House Publishers
O’Toole James, Mayer Don, (2013), Good Business: Exercising Effective and Ethical Leadership, Springer Publishers
Bustillo, M. (2010, July 26). Nike to pay some $2 million to workers fired by subcontractors. Wall Street Journal. Retrieved from com/article/SB10001424052748704700404575391551065295316.html”>http://online.wsj.com/article/SB10001424052748704700404575391551065295316.html
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