Offshoring and outsourcing can be important turnarounds for companies. They provide additional advantages that are difficult to obtain when working in the home country. Nevertheless, stakeholders have perceptions and ethical concerns about working abroad, and these perceptions have supporting evidence.
In this paper, I will discuss some of these perceptions.
Stakeholder perceptions of offshoring and outsourcing:
According to (Robertson, Lamin & Livanis, 2010), many stakeholders are concerned about some of the decisions that the company makes in ignoring security breaches in other countries, which usually the foreign investor or the company that works remotely cannot guarantee in the work environment of another country, the writer argued the example of working in China, there are significant concerns about the security of electronic information transmitted to branches of US companies in China, which can not adopt strict control there according to the labor policies of this country, next comes concerns about the deterioration in the quality of the product or service, but these concerns can be worked on and resolved by applying the same quality standards in the home country, then comes, but to a lesser extent, concerns about child labor and the validity of the work environment itself, finally the impact of this on the American society's view of companies that violate US laws abroad.
Factors that affect the opinions of stakeholders:
The country's foreign policy: Investment and labor policies and laws in a foreign country significantly affect the decision of stakeholders to go to this country or not (Edgson, 2022)
Data protection: according to (Robertson, Lamin & Livanis, 2010), the potential for sensitive data to be leaked carries significant weight from an ethical stakeholder point of view, more than involving product/service quality or job losses in the home country.
Lack of transparency affects stakeholder decisions because consumers always want to know where their products came from and who made them. Outsourcing complicates this, as the same product can consist of several parts different from the same quality (Weidenbaum, 2005).
Communication problems: There may be communication issues beyond the expected costs. For example, there are developing countries where telephone lines and the Internet do not work well, which prevents stakeholders from going to or continuing in these countries (Ishizaka et al., 2019).
Conclusion
To reduce stakeholder concerns and assure them of offshoring and outsourcing, it is necessary to provide guarantees that demonstrate the avoidance of these fears; for example, in information security, government policies must be chosen in a country that largely agrees with the expectations of stakeholders in this direction, as for quality, working on a unified Vendor certification model in the home country and the host country may ensure the quality in both countries equally, (Heineman, 2012). Finally, analyzing the day-to-day performance of offshoring and outsourcing service providers is an essential part of reducing stakeholder concerns and working to bridge the ethical gaps that can occur in the host country.
References
Edgson, J. (2022). 27 eye-opening outsourcing statistics (2022 update). Capital Counselor.
https://capitalcounselor.com/outsourcingstatistics/#:~:text=The%20global%20outsourcing%20market%20was,to%20an%20MSP%20in%202021
Heineman, B. (2012). In defense of responsible offshoring and outsourcing. Harvard Business Review. Retrieved from:
https://hbr.org/2012/02/in-defense-of-responsible-offs%3Freferral%3D03758%26cm_vc%3Drr_item_page.top_right
Ishizaka, A., Bhattacharya, A., Gunasekaran, A., Dekkers, R., & Pereira, V. (2019). Outsourcing and offshoring decision-making. International Journal of Production Research, 57(13), 4187-4193.
Robertson, C. J., Lamin, A., & Livanis, G. (2010). Stakeholder perceptions of offshoring and outsourcing: The role of embedded issues. Journal of Business Ethics, 95(2), 167-189.
Weidenbaum, M. (2005). Outsourcing: Pros and cons. Business Horizons, 48(4), 311-315.