Question

Ethical issues follow managers overseas. Consider the following passage from Fortune Magazine, a U.S. business magazine that is not usually sympathetic to the victims of free markets. The article relates the story of Mary who works for a Taiwanese company which has a contract to make components for Motorola (the factory does not belong to Motorola):

For the privilege of working 12-hour shifts seven days a week in a factory where she makes plastic casings for Motorola cell phones, Mary, 30, will be in debt for years to come. To secure work at the Motorola subcontractor which is in Taiwan, Mary had to pay $2.400 to a labor broker in her native Philippines. She didn't have that kind of money, so she borrowed from a local money lender at an interest rate of 10% per MONTH. That payment, however, only got her as far as Taiwan. A second labor broker met Mary at the Taipei airport and informed her of his separate $3,900 fee before delivering her to her new job.

Before she left the Philippines, Mary rejoiced at the $460 she would earning in Taiwan; it was more than five times what she could make doing similar work, if she could find it, in her own country. But once in Taiwan she began to realize that after the brokers' fees and other deductions, she would be left with almost nothing.

Out of her monthly check came $215 to pay th3e Taiwanese broker, $91 for Taiwanese income tax, $72 for her room and board at the factory dorm, and $86 for a compulsory contribution to a savings bond she will get only if she completes her three-year contract. After 18months, she will have repaid the Taiwanese labor broker. But she still must contend with her Philippine debt and its rapidly compounding interest.

In response to the inquiries of Fortune's reporter, Motorola issued a statement saying it "has a strict policy of adherence to the laws and labor practices in the countries where it operates, in addition to a rigorous code of conduct." Is this an adequate response? In your opinion, what responsibility (if any) does Motorola have to workers like Mary? Defend your answer.

Answer 1

The response towards the entire inquiry is not appropriate. As per Webster dictionary- "ethics is the discipline dealing with what is good and bad or right and wrong or with moral duty and obligation." and every company bears the moral, legal and mental accountability towards their employees . Mary in the above study has clearly faced the labor abuse in the hands of Motorola's lack of due diligence. Mary has to overwork herself in lieu to earn $460 per month post paying taxes, brokers and room she has nothing left. The company fails to provide cost free board at the factory dorm, Mary works overtime (12 hrs and 7 days a week) therby exploiting Mary's unawarness about unfair labor practices and adequate working conditions.

The company is entitled to ensure the amount of the contractual worker's investment is reimbursed like board at the factory. The company also needs to decide upon the nature and degree of control by the principal like the number of hours to be worked, quality control , pay rate etc.

The protection of labor should be of prime importance and extraction money by the Taiwanese broker should be considered as unlawful practice. The management at Motorola must intervene as to how the contractor is being paid and must regulate the middlemen being involved in hiring such contractors.