A CRITICAL ANALYSIS OF ETHICAL OUTSOURCING USING COMPARATIVE CASE EXAMINATION AND ELICITING CONSUMER MILLENNIALS PERSPECTIVES
Abstract
In the United States, highly competitive market outsourcing benefits are correlated to low consumer prices, growth in sales, and taking over market shares leaving competitors tailgating your organization. The high costs associated with adhering to the United States manufacturing regulations that include adherence to Clean Air Act that controls the pollution levels; Clean Water Act; Occupation Safety and Health Act; labor; and disposal regulations among others are leading reasons for the attraction of companies to outsource to global markets that have fewer regulations. Global outsourcing ventures in manufacturing sectors carry a perception of unethical conduct that involves long hour with low wages, physically abused, and poor working conditions, among consumers. The researchers’ objective was for an opportunity to acquire and understand millennials perspectives on the integration of individual moral values with ethics and millennials personal implications on sustainable development in Apple’s manufacture outsourcing. Consumer millennials decision to purchase Apple products contributes to Apple’s sustainability development; would the millennial’s access to the unethical practices in the manufacturing sway purchasing decisions. The face to face interviews gained insight if millennials considered individual morals and ethics in making purchasing decisions. The interviewed population for the research was millennials ages 18 to 34 who are today’s highest shoppers as documented and the majority workforce by 2020.
JEL: D12, P36, P46
Article visualizations:
Keywords
References
Aeppel, T. (2014). New Balance acknowledges shoe material aren’t all U.S made. (Accessed on April 22, 2017). Retrieved from www.wsj.com
Ammachchi, N. (2016). Ciscto to invest billions in Mexico manufacturing facilities. (Accessed April 22, 2017). Retrieved from www.nearshoreamericas.com
Apple Inc. (2016). Supplier responsibility. (Accessed April 22, 2017). Retrieved from www.apple.com
Apple Press Release (2016) Apple report fourth quarter results. (Accessed April 22, 2017). Retrieved from www.appp.com
Balko, R. (2003). “Sweatshops,” boycotts, and the road to poverty. (Accessed July 7, 2017). Retrieved from www.capitalismmagazine.com
Bango, S. (2014). Inside Nike’s struggle to balance cost and worker safety in Bangladesh. Accessed July 7, 2017). Retrieved from www.wsj.com
Barboza, D. (July 26, 2009). IPhone maker in China is under fire after a suicide. (Accessed April 22, 2017). Retrieved from www.nytimes.com
Barboza, D. (February 22, 2011). Workers sickened at Apple supplier in China. (Accessed June 1, 2017). Retrieved from www.nytimes.com
Bettis, R. A., Bradley, S. P., & Hamel, G. (1992). Outsourcing and industrial decline. The Executive, 6(1), 7-22. (Accessed April 22, 2017). Retrieved from https://www.jstor.org
Blodget, H. (2012). Steve Jobs freaked out a month before fist iPhone was released and demanded a new screen. (Accessed April 22, 2017). Retrieved from www.businessinsider.com
Bloomberg (2006). IBM’s insider in outsourcing. (Accessed April 22, 2017). Retrieved from www.bloomsburg.com
Blumenthal, E. (2016) Millennials drive spike in online shopping. (Accessed April 22, 2017). Retrieved from www.usatoday.com
Bort, J. (2016). IBM’s restructuring continues with reduced severance for laid off employees. (Accessed April 22, 2017). Retrieved from www.businessinsider.com
Brass, D. J., Butterfield, K. D., & Skaggs, B. C. (1998). Relationships and unethical behavior: A social network perspective. Academy of Management Review, 23(1), 14-31. (Accessed April 22, 2017). Retrieved from www.amr.aom.org
Bryne, J. A. (2013). IBM now employees more workers in India than US. (Accessed April 26, 2017). Retrieved from www.nypost.com
Canizares, K. (2001). Nike’s corporate responsibility sham. (Accessed July 07, 2017). Retrieved from www.alternet.org
CBS News (2012) Wal-Mart: Bangladesh factory in deadly fire made clothes without our knowledge. (Accessed April 22, 2017). Retrieved from www.cbsnews.com
Chamberlain, G. (2011). Apple’s Chinese workers treated ‘inhumanely, like machines’. (Accessed April 22, 2017). Retrieved from www.theguardian.com
Chan, J. (2013). A suicide survivor: the life of a Chinese worker. (Accessed July 6, 2017). DOI: 10.1111/ntwe.12007
Chan, J., & Pun, N. (2010). Suicide as protest for the new generation of Chinese migrant workers: Foxconn, global capital, and the state. Asia-Pacific Journal: Japan Focus. (Accessed April 24, 2017). Retrieved from www.apjjf.org
Chan, A. & Unger, J. (2011). Wal-mart’s China connections. (Accessed April 22, 2017). Retrieved from www.prospect.org
Chang, G. G. (2010) Suicides at Apple supplier in China. (Accessed April 24, 2017). Retrieved from www.forbes.com
Chmielewski, D. (2015). Where Apple products are born: A rare glimpse inside Foxconn’s factory gates. (Accessed April 26, 2017). Retrieved from www.recode.net
Chushman JR. J. H. (1998). International business; Nike pledges to end child labor and apply U.S. (Accessed July 7, 2017) Retrieved from www.nytimes.com
Cisco (2016). Cisco reports fourth quarter and fiscal year 2016 revenue. (Accessed April 26, 2017). Retrieved from www.investor.cisco.com
Cooper, R. (2013). Inside Apple’s Chinese “sweatshop” factories where workers are paid just £1.12 per hour to produce iPhones and iPads for the west. (Accessed April 26, 2017). Retrieved from www.dailymail.co.uk
Daily Mail (June 2, 2010) ‘For a factory, it’s pretty nice’: Apple boss Steve Jobs defends conditions at Chinese Factory where 10 workers have jumped to their deaths. (Accessed on April 11, 2017) Retrieved from www.dailymail.co.uk
Daily Mail (July 13, 2011). Nike workers ‘kicked, slapped and verbally abused’ at factories making converse. (Accessed on April 11, 2017). Retrieved from www.dailymail.co.uk
David, R. (2007). The father of Indian outsourcing. (Accessed May 012, 2017). Retrieved from www.forbes.com
DiCarlo, L. (2016). Best countries for outsourcing. (Accessed on April 11, 2017). Retrieved from www.forbes.com
Dou, E. (2016). Deaths of Foxconn highlight pressures faced by China’s factory workers. (Accessed April 22, 2017). Retrieved from www.wsj.com
Duffy, J. (2009). Cisco quietly downsizing through outsourcing. (Accessed April 22, 2017). Retrieved from www.networkworld.com
Duhigg, C. & Bradsher, K. (January 21, 2012). How the U.S. lost out on iPhone work. (Accessed April 12, 2017). Retrieved from www.nytimes.com
Duhigg, C. & Barboza, D. (January 25, 2012). In China, human costs are built into an iPad. (Accessed April 11, 2017). Retrieved from www.nytimes.com
Elmer-Dewillt, P. (June 27, 2009). Foxconn paid iPhone suicides family $44,000. (Accessed April 22, 2017). Retrieved from www.fortune.com
Elmer-Dewillt, P. (February 27, 2010). Reporter roughed up by Apple supplier. (Accessed April 22, 2017). Retrieved from www.fortune.com
Elmer-DeWillt, P. (May 26, 2010). Apple investigating Foxconn Suicides. (Accessed May 05, 2017). Retrieved from www.fortune.com
Elmer-DeWitt, P. (June 1, 2010). Steve Jobs on Foxconn Suicides. (Accessed May 05, 2017). Retrieved from www.fortune.com
Elmer-DeWitt, P. (November 23, 2013). By the numbers: How Foxconn churns out Apple’s iPhone 5S. (Accessed May 05, 2017). Retrieved from www.fortune.com
Feenstra, R. C., & Hanson, G. H. (1996). Globalization, outsourcing, and wage inequality (No. 5424). National Bureau of Economic Research. (Accessed May 05, 2017). Retrieved from www.nber.org
Fernando, V. (2010). Walmart outsources away 11,200 jobs in a month. (Accessed May 05, 2017). Retrieved from www.businessinsider.com
Forbes (2016) America’s best employers. (Accessed May 05, 2017). Retrieved from www.forbes.com
Forbes (January 25, 2012). The real reason the U.S. doesn’t make iPhones: we wouldn’t want to. (Accessed May 09, 2017). Retrieved from www.forbes.com
Fry, R. (2016). Millennials overtake baby boomers as America’s largest generation. (Accessed May 11, 2017). Retrieved from www.pewresearch.org
Garber, M. (2015). How Nike turned running shoes into fashion. (Accessed July 7, 2017). Retrieved from www.theatlantic.com
Goldman, D. (2012) Why Apple will never bring manufacturing jobs back to the United States. (Accessed May 12, 2017). Retrieved from www.money.conn.com
Gralnick, J.G. (2012). Half of U.S homes own Apple products. (Accessed May 12, 2017). Retrieved from www.usatoday30.usatoday.com
Greenhouse, S. (2012). Critics question record of monitor selected by Apple. (Accessed July 7, 2017). Retrieved from www.nytimes.com
Hamlett, K. (2017). Reasons for outsourcing in a manufacturing industry. (Accessed May 09, 2017). Retrieved from www.smallbusiness.chron.com
Harvard, (2006). Labor & worklife; The labor and worklife program at Harvard law school. (Accessed May 09, 2017). Retrieved from www.lawharvard.edu
Heffernan, M. (2013). What happened after the Foxconn suicides? (Accessed May 12, 2017). Retrieved from www.cbsnews.com
HG.org (2017). Legal Resources: Manufacturing law. (Accessed May 12, 2017). Retrieved from www.hg.org
Hogan, R. (1973). Moral conduct (Accessed May 09, 2017). and moral character: A psychological perspective. Psychological bulletin, 79(4), 217. (Accessed May 12, 2017). Retrieved from www.psycnet.apa.org
Hopkins, K., (2015). Top 10 emerging markets for outsourcing. (Accessed May 05, 2017). Retrieved from https://www.raconteur.net
Hyder, S. (2016). Millennials and shopping: how retailers are missing the mark. (Accessed May 05, 2017). Retrieved from www.forbes.com
IBM (January 19, 2017). IBM reports 2016 fourth-quarter and full-year results. (Accessed May 05, 2017). Retrieved from www.ibm.com
IBM (2016). IBM is founded, IBM 100. (Accessed May 05, 2017). Retrieved from www.-03.ibm.com
Innocenti, A., & Labory, S. (2002). The advantages of outsourcing in terms of information management. (Accessed May 05, 2017). Retrieved from www.papers.ssrn.com
ITI Manufacturing (2014). Which five companies do the most overseas manufacturing. (Accessed May 05, 2017). Retrieved from www.itimanufacturing.com
Jamieson, D. (2012). Walmart outsourcing depresses wages in U.S. Warehouses: Report. (Accessed May 05, 2017).
John, J. St (2015). Apple and sunpower to build 40MW of PV in China. (Accessed May 05, 2017). Retrieved from www.greentechmedia.com
Johnson, J. (2011) 1 million works. 90 million iPhones. 17 suicides. Who is to blame? (Accessed May 05, 2017). Retrieved from www.wired.com
Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. Academy of management review, 16(2), 366-395. (Accessed May 05, 2017). Retrieved from www.amr.aom.org
Josephs, H. K. (2014). Production Chains and Workplace Law Violations: The Case of Apple and Foxconn. (Accessed May 02, 2017). (Accessed May 05, 2017). Retrieved from www.engagedscholarship.csuohioledu
Kasperkevic, J. (2016) Rana plaza collapse: workplace dangers persist three years later, reports find. (Accessed May 05, 2017). Retrieved from the www.theguardian.com
Khalip, A. (2013). Insight-Banglore on Tagus? Portugal outsourcing gets reforms boost. (Accessed July 5, 2017). Retrieved from www.uk.reuters.com
Khanna, T., Palepu, G. K., & Sinha, J. (2005). Strategies that fit emerging markets. (Accessed July 5, 2017). Retrieved from www.hbr.org
Knowles, G., & You, M. & You, T. (2016). Exclusive: Inside the eerie deserted dorms where Apple iPhone workers lived eight to a room, showered in groups of 20 and even paid for the privilege. (Accessed May 09, 2017). Retrieved from www.dailymail.co.uk
Kokemuller, N. (2017). Is outsourcing an ethical practice? Retrieved from www.smallbusiness.chron.com
Laha, R. (2017). Cisco launches its first ‘make in India’ product. (Accessed July 7, 2017). Retrieved from www.livemintcom
Lebeaux, R. (2009). IT outsourcing pros and cons for Latin, South America. (Accessed July 5, 2017) Retrieved from www.searchcio.techtarget.com
Lutz, A. (2015). How Nike shed its sweatshops image to dominate the shoe industry. (Accessed May 09, 2017). Retrieved from www.businessinsider.com
Mashable, P.P. (2012). Half of U.S households own at least one Apple product. (Accessed May 09, 2017). Retrieved from www.cnn.com
Mastorianni, B. (2016). With 1 billion devices in use, how does Apple keep growing? (Accessed May 09, 2017). Retrieved from www.cbsnews.com
Maxwell, J. A. (2008). Designing a qualitative study. The SAGE handbook of applied social research methods, 2, 214-253. (Accessed May 09, 2017). Retrieved from www.us.sagepub.com
Mboga, J. (2013). Exploring outsourced vendor operating effectiveness and its effect on clients' objectives (Order No. 3605925). (Accessed May 09, 2017). Available from ABI/INFORM Collection. (1491381209).
McIvor, R. (2008). What is the right outsourcing strategy for your process?. European management journal, 26(1), 24-34. (Accessed May 09, 2017). Retrieved from https://www.journals.elsevier.com
McCarthy,K. (2015). Another death in Apple’s “Mordor’- its Foxconn Chinese assembly plant. (Accessed May 09, 2017). Retrieved from www.theregister.co.uk
Merriam, S. B. (1998). Qualitative Research and Case Study Applications in Education. Revised and Expanded from" Case Study Research in Education." Jossey-Bass Publishers, 350 Sansome St, San Francisco, CA 94104. (Accessed May 09, 2017). Retrieved from www.wiley.com
Messick, D. M., & Bazerman, M. H. (2001). Ethical leadership and the psychology of decision making. In The next phase of business ethics: Integrating psychology and ethics (pp. 213-238). Emerald Group Publishing Limited. (Accessed May 09, 2017).
Monge-Gonzalez, R. (2016). Innovation, production, and growth in Costa Rica. (Accessed July 5, 2017) Retrieved from www.innovationpolicyplatform.org
Mul, Y. Q. & Rosenwald, M. S. (2011). Wal-Mart shelves old slogan after 19 years. (Accessed May 09, 2017). Retrieved from www.huffingtonpost.com
Nike (2016). Nike, INC. report fiscal 2016 fourth quarter and full year results. (Accessed May 09, 2017). Retrieved from www.news.nike.com
Niranjan, T. T., & Rao, S. S. (2011). A toolkit for balanced outsourcing. Industrial Management, 53, 19-24. (Accessed May 09, 2017). Retrieved from http://www.emeraldinsight.com
Nisen, M. (2013). How Nike solved its sweatshop problem. (Accessed May 09, 2017). Retrieved from www.businessinsider.com
Novite. (2015). Bulgaria ranks 38th in World Bank’s ease on doing business 2016 ranking. (Accessed on July 5, 2017). Retrieved from www.novite.com
Oremus, W. (2012). How Apple turned the Foxconn scandal into another way to beat its competitors. (Accessed May 09, 2017). Retrieved from www.slate.com
Orton-Jones, C. (2015). Future of outsourcing. (Accessed July 5, 2017) Retrieved from www.raconteur.uberflip.com
Oster, S. (2016). Behind the scenes at Apple’s controversial China iPhone factory. (Accessed July 07, 2017) Retrieved from www.chicagotribune.com
Paine, L. S. (1994). Managing for organizational integrity. Harvard business review, 72(2), 106-117. (Accessed May 09, 2017). Retrieved from www.hbr.org
Paulson, E. (2002). Incise Cisco: The real story of sustained M & A growth. Wiley Publications (Accessed May 09, 2017).
Perez, S. (2014). Millennials are the largest group of smartphone owners, and adoption is still growing. (Accessed July 5, 2017). Retrieved from www.techcrunch.com
Peterson, H. (2014). One stunning stat that shows how Nike changed the show industry forever. (Accessed July 7, 2017). Retrieved from www.businessinsider.com
Quinn, J. B., & Hilmer, F. G. (1994). Strategic outsourcing. Sloan management review, 35(4), 43. (Accessed May 09, 2017). Retrieved from www.sloanreview.mit.edu
Rao, D. (2014). Walmart’s $10 million plan is a good start. (Accessed May 09, 2017). Retrieved from www.forbes.com
Reuters, 2016). Apple iPhone maker Foxconn says two of its workers died last week. (Accessed May 09, 2017). Retrieved from www.fortune.com
Ribeiro, J. (2006). Cisco to manufacture some products in India. (Accessed May 09, 2017). Retrieved from www.infoworld.com
Rosoff, M. (2016). The end of the iPhone’s amazing eight-year run. (Accessed May 09, 2017). Retrieved from www.businessinsider.com
Sin, B. (2016). Latest Foxconn worker deaths build case for Apple to move operations from China. (Accessed May 09, 2017). Retrieved from www.forbes.com
Singam, P. T. (2000). Putting the boot into Nike, the west Australian. (Accessed on July 7, 2017). Retrieved from www.archive.cleanclothes.org
Snow, M., Rizzo, J., & Foley, V. (2009). IBM draws criticism for job cuts, outsourcing. (Accessed May 05, 2017). Retrieved from www.cnn.com
Statt, N. (2016). 1 billion Apple devices are in active use around the world. (Accessed May 05, 2017). Retrieved from www.theverge.com
Steele, A. (2017). Cisco to lay off 1,000 more workers –2nd update. (Accessed May 05, 2017). Retrieved from www.foxbusiness.com
Strom, S. (1996). A sweetheart becomes suspect; looking behind those Kathe Lee labels. (Accessed May 05, 2017). Retrieved from www.nytimes.com
The Economist (2017). The global economy enjoys a synchronised upswing. (Accessed July 5, 2017). Retrieved from www.economist.com
The Star (2007). Wal-Mart’s ad slogan changes after 19 years. (Accessed July 7, 2017). Retrieved from www.thestar.com
Trendall, S. (2016). Czech Republic: The touchpaper has been lit. (Accessed July 5, 2017). Retrieved from www.soitron.com
Treviño, L. K., Hartman, L. P., & Brown, M. (2000). Moral person and moral manager: How executives develop a reputation for ethical leadership. California management review, 42(4), 128-142. (Accessed May 05, 2017). Retrieved from www.cmr.ucpress.edu
Triulzi, D. J. (1997). Advantages of outsourcing the transfusion service. (Accessed May 09, 2017). Retrieved from https://www.elsevier.com
Varinsky, D. (2016). Here’s what 5 of your favorite products would cost if they were made in the US. (Accessed May 09, 2017). Retrieved from www.businessinsider.com
Walmart (2016). Walmart reports Q4 adjustment EPS of $1.49, fiscal year adjusted EPS of $4.59. (Accessed May 09, 2017). Retrieved from www.news.walmart.com
Watch, C. L. (2012). Beyond Foxconn: Deplorable working conditions characterize Apple’s entire supply chain. (Accessed May 09, 2017). Retrieved from www.chinalaborwatch.org
Wazir, B. (2001). Nike accused of tolerating sweatshops. (Accessed May 07, 2017).
Willcocks, L., Griffiths, C., & Kotlarsky, J. (2009). Offshoring in non-brick countries: Egypt-a new growth market. (Accessed July 5, 2017). Retrieved from www.lboro.ac.uk
Worstall, T. (2013). If apple brought iPhone manufacturing to the US it would cost them $4.2 billion. (Accessed May 09, 2017). Retrieved from www.forbes.com
DOI: http://dx.doi.org/10.46827/ejefr.v0i0.150
Refbacks
- There are currently no refbacks.
Copyright (c) 2018 Jet Mboga
This work is licensed under a Creative Commons Attribution 4.0 International License.
The research works published in this journal are free to be accessed. They can be shared (copied and redistributed in any medium or format) and\or adapted (remixed, transformed, and built upon the material for any purpose, commercially and\or not commercially) under the following terms: attribution (appropriate credit must be given indicating original authors, research work name and publication name mentioning if changes were made) and without adding additional restrictions (without restricting others from doing anything the actual license permits). Authors retain the full copyright of their published research works and cannot revoke these freedoms as long as the license terms are followed.
Copyright © 2016 - 2023. European Journal of Economic and Financial Research (ISSN 2501-9430) is a registered trademark of Open Access Publishing Group. All rights reserved.
This journal is a serial publication uniquely identified by an International Standard Serial Number (ISSN) serial number certificate issued by Romanian National Library. All the research works are uniquely identified by a CrossRef DOI digital object identifier supplied by indexing and repository platforms. All the research works published on this journal are meeting the Open Access Publishing requirements and standards formulated by Budapest Open Access Initiative (2002), the Bethesda Statement on Open Access Publishing (2003) and Berlin Declaration on Open Access to Knowledge in the Sciences and Humanities (2003) and can be freely accessed, shared, modified, distributed and used in educational, commercial and non-commercial purposes under a Creative Commons Attribution 4.0 International License. Copyrights of the published research works are retained by authors.