Question

In: Operations Management

Scenario: Your company appears to be taking unfair advantage of the working conditions in an overseas...

Scenario: Your company appears to be taking unfair advantage of the working conditions in an overseas subsidiary in which you work. At the same time, however, your company is providing much-sought-after employment in this developing region.

1. What are your thoughts regarding this difficult situation?

2. What rights and obligations does your company have?

3. What would you do as upper management?

Solutions

Expert Solution

1. My thoughts would revolve around ethical principle of justice for this matter. It is possible that a company from a developed country exploits the workers in the developing countries. However, what I would judge this is based on the fact, what is the market scenario in the developing country. By taking advantage of the working condition in the outsourced country are we actually providing terrible work condition to the employees? Do other companies provide the same? Is that the regular business practice in that country? These are some of the questions that need to be answered. If our working condition is poorer than most of the companies in that country, then it is not right and some action needs to be taken. On the other hand, if it is at par or even slightly better than the country’s normal working conditions then it is quite ok. In that case the benefits provided outweighs the drawbacks.

2. Company has the right to set their own standards, set their own policies on working conditions and determine the pay structure. They also have their rights to hire and fire people depending on performance and requirement of the company.

In addition to this, they also have certain obligation to the society and the employees. They have obligation to be ethical, be reasonable and be just while dealing with the employees. They have obligation to provide the employees with safe and respectable working condition.

3. As an upper management I would assess if the subsidiary is following the company’s policies and standards when it comes to treatment of employees. If not, then I would make sure that the fair practices and policies as per the company’s guidelines. I would also look into the matter if there are any loopholes in the policies and company standards which can be taken advantage of and subsidiaries can take unfair advantage of workers. In that case, I would work on making the policies more uniform and justified on a global scale.


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