Business, ethics, and morality

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In the last blog entry, “someone who cares” expressed dismay that I seemed “proud” to be sending work outside the USA.

This raises some interesting issues about business, ethics, and morality.

Here is my opinion, and I would be interested in yours:

First, the purpose of business is to generate a profit. Capitalism in and of itself is a system. A business in and of itself is a structure. Neither carries any moral implications at the start. Sell a product/service to people who want it, and sell it for more than it cost you to make/provide it.

Now, how we conduct business does have moral and ethical weight. There are many behaviors that are unethical, in business and in life:

– Misleading people with inaccurate information

– Negligence in safety

– Financial mis-conduct

– Non-competitive practices like collusion

– Corruption and fraud

– Environmental damage/pollution

There are also many behaviors that are good/nice things to do, and often also make for good business, such as supporting your local community with charitable work, by creating jobs, and by working hard to make your company a great place to work/learn. And there are fantastic examples of managing ethical issues, such as Johnson & Johnson’s famous response to tainted pain relief medication. Also, companies on the 100 Best Places to Work list do some great things to retain and develop employees — but probably more because it is good business.

But business has an obligation to shareholders (or the owner) first and foremost to generate a profit — within the bounds of what is legal, moral, and ethical.

So is outsourcing immoral?

To me, it is not. To me, preserving jobs that are non-competitive is more immoral. Here in the USA, companies receive huge subsidies to protect a variety of industries: farming, cotton, high fructose corn syrup. And many jobs have structural costs that do not exist overseas, as General Motors and Ford are finally having to confront. So preserving non-competitive jobs creates a dependent class of employees that will one day face destructive change. Life is change, and business is no exception. The pace of change has gotten more rapid, but that is not immoral.

Outsourcing jobs to less expensive people takes away opportunity and creates opportunity. The people who don’t get the jobs (because they are too expensive) lose an opportunity. But they have the opportunity to “up their game” and go to the next level. In my case, using outsourced programmers lets me create an online site that I could never create with more expensive labor.

Those who miss out on the opportunity to build my site can take a number of next steps. They can start building their own sites for income. They can become an expert on outsourced labor, and help people like me find good international coders without the usual hassles. Those are only two of many examples.

To me, being a victim is the ultimate immorality. That’s because being a victim hurts the individual and, if one becomes an entitled victim, can spread like a cancer through society.

Having said the above, I think that successful businesspeople have an obligation to “give back” as much as they can. First, it is good “karma” for those who believe in that. Second, as a business school professor used to say, “Society gives you the right to run a business, and society can take that right away.”

Also, as citizens, we have an obligation to hold business accountable to good behaviors, just as we do for government.

So I appreciate “someone who cares” frustration at my outsourcing a job overseas. But I disagree that it is a moral issue. Also, I am neither proud nor not proud to be outsourcing. I am happy to have found an excellent professional provider at a low cost, though — regardless of where they work and live.

What do you think?

Andrew NeitlichAndrew Neitlich
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