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My-Corp, Inc.: Ethical implications of offshoring from the view of the Financial Manager

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  1. Introduction
  2. Advantages of offshoring
    1. The lower overhead that results in reduced prices
    2. Developing the economy of less wealthy nations
    3. Simplicity, asset protection and anonymity
  3. Negative points in offshoring
    1. The closing of manufacturing plants in the states and lost jobs
    2. The phantom GDP
    3. The 2006 annual report of the Pollina Corporate Real Estate
  4. Reputable safety and quality standards
  5. Conclusion
  6. Work cited

Not long ago, offshoring was uncommon for companies. Today, however, it is becoming a more commonplace practice: as prices for manufacturing rise in the US; shipping these operations overseas becomes more appealing. If we talk about offshoring we can separate the practice in two distinctive types of offshoring: Offshoring Blue Collar Jobs and offshoring White Collar jobs. Blue Collar jobs are basically all jobs which historically have required the person to wear a uniform (which were often blue). A Blue Collar worker is a person working manual labor and is usually paid hourly. Manufacturing Jobs are usually referred to as Blue Collar jobs and can include unskilled or skilled labor. On the other hand White Collar jobs can be any job which is not considered a Blue Collar Job and usually does not include manual labor. White Collar Worker most often receives their income in the form of salary. Examples of White Collar Jobs include Sales, Managerial and Clerical Jobs. Offshoring can refer to moving jobs to companies already in existence in another country, or can refer to a company building facilities in their own name overseas.

[...] There are 12 distinctive guidelines of moving jobs oversea as stated in an article on the Ethical Corporation website: BT's set of 12 guidelines for ethical offshoring Consult with affected stakeholders before making a decision to offshore. Clearly articulate policy and be honest and transparent about company decisions. Limit or avoid involuntary redundancy. Invest in retraining and skill development for affected employees. Work with communities to help find ways to fill the gaps created by offshoring. Work with suppliers in the recipient country to develop best practice and CSR awareness. [...]

[...] Also in the same article mentioned is part of a survey from the National Public Radio in 2006 stating that offshoring and job loss is the number one concern of Americans, ahead of the Iraq war and Immigration. It is not ethical to let experienced workers go who have responsibilities and obligations, if they were hired with any reasonable expectation of job security. Not simply for profits, at least. Other negative impacts on offshoring include the so called ?phantom GDP?. [...]

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