Outsourcing at Any Cost Essay

Galaxywire. net decided to choose its central location in Green Fork, because the city development officials offered a 300,000 low-interest loan for employee training, promise 50 percent tax abatement for the first 10 years and construct a new 2. 3 million dollar secondary building for day care and executive suites. Galaxywire. net can help the city solve high unemployment rate, because they planned to hire 3000 employees. CEO promised they will stay and treat their employees as a family to deal with increasing distrustful of large corporations in local. Few years later, the outsourcing trend becomes popular in the United States of America, especially, most of Galaxywire’s competitors were already outsourcing. Therefore, top management started to consider moving to India in order to save at least 10 million a year. Galaxywire. net let its employees know immediately of its intention to close the home office. It provided severance packages of a month’s full pay and extended health insurance coverage for five months. But none of the top executives would be laid off and still get paid high compensations. At that time, the unemployment rate is still at 10 percent, so the city tried to find solution to make Galaxywire. net stay and still recoup most of the money it hoped to save by moving. The city does not want to lose its largest employers, so they proposed a deal that would save 7 million dollar in the first year, 8 million dollar the second, 9 million dollar yearly thereafter and extended the 60 percent tax abatement for another decade. Also, the employees agreed to a 15 percent pay cut. However, the company was not interested in the first offer and still would not stay. So the employees agreed to another 5 percent pay cut and other concessions. In addition, the city increased the tax reduction by another 5 percent. The second offer totally helps the company save 10 million dollar in the first year, 11 million dollar the next and 12 million dollar year thereafter. The second offer is very attractive, and how should the Galaxywire. net make a decision? From my own perspective, the ethical issue in this case is that Galaxywire. et is confronting the moral challenge, they are in moral dilemma, because their profit against needs of employees and the city government. If they choose to stay, it proves they fulfill the commitment. But if they choose to move to India, it proves they break the promise and dishonest. There are two solutions for Galaxywire. net to make decision. First, I suggest that Galaxywire. net should choose to stay in Green Fork and accept the first offer. The first solution has many benefits for Galaxywire. et, the reasons as follow: first, if the company chooses to stay in Green Fork and fulfill the commitment, it would increase employee loyalty and enhance the relationship with local government. Second, it is hard to measure the Indian employees will be qualified for their positions. But there are many skilled and dedicated employees in Green Fork. It is not necessary to take risk to move abroad. Third, the company should choose the first offer instead the second offer, because the second offer will bring the greater burden on local government’s budget and the employees will become inactive due to lower salaries. If the company chooses the first offer, the employees and local government will feel grateful to the company because it proves that company still care about the interests of employees and local government. According to the Libertarian theory, the company did not sacrifice individual interests and rights to satisfy the company’s interest right and interests, we can say what the company did is just and moral. Although the company sacrificed some interests, they guaranteed the employees and local government’s interests. The goodwill of Galaxywire. et will be better and better due to choosing the first solution. Second, I suggest that Galaxywire. net should move to India and give up both the first and the second offer. Also, the company should provide the employees who will be laid off a chance to purchase original issue stock as compensation. There are many benefits if the Galaxywire. net chooses the second solution, the reasons as follow: first, the company can reduce the cost and save around 10 million dollar a year, because salaries expense is largest expenditure of each company. Although the second offer can help the company saving more, the local government may not be able to afford it in few years later, because the local government’s budget is limited, and it is unfair if too much budget goes to Galaxywire. net. The local government can have more budget to support other developing or small companies in local, if the scale of the companies become bigger and bigger, the high unemployment rate problem can be solved in the long run, because larger companies need more qualified employees. Expending too much budget to keep a largest company is not a wise choice. Also, the government can set up funding to training local people to be qualified employees. Second, issuing original stock as compensation is a good way to solve breaking the promise. The employees can reap benefits from this decision, because they will earn more income per year and feel thankful to the company, and it proves that the company does not put them away; the employees still can rely on company to make money. The employees who will be laid off are used to work at the largest company, and it can prove they are qualified to their position, so it is not hard to find a new job in local or Chicago. Also, the qualified employees can help the local developing or small companies develop faster. The unemployment rate seems not to be worsening if the company moves to India. In addition, the company will have more money to invest in more profitable projects in order to make more profit. When the company gains more and more revenue, they can pay dividends to their stockholders. The second solution relieves the burden of governmental budgeting, makes employees have more income, and help the company reduce the cost. From the view of Utilitarian theory, the company, the government and the employees reap great benefits of the second solution, and it means the greatest good for the greatest number. Therefore, the second solution can be just and moral theoretically. As far as I am concerned, the second solution is more appealing than the first solution. The reason is that the second solution can distribute benefits to every member. Galaxywire. net can reduce the cost and save 10 million dollar, holding stock can help employees who will be laid off earn considerable returns, and local government will not expend more and more to keep the company stay anymore instead giving money to someone who needs it. It seems that the company move to India unequal and against the moral obligation, but according to Rawls, it is moral and just, because unequal distribution of power, opportunities, income or wealth is not just unless everyone benefits. Also, according to Utilitarian theory, everyone will happy due to the benefits he or she received, so the second solution can achieve the good consequence. In addition, the second solution helps limiting the role of government to guarantee the individual1rights. If the company accepts one of two offers, more and more resources will move to the company, it would make other companies cannot have right to achieve these resources. The government plays an important role of social resources distribution. Therefore, the second solution is moral and just in Libertarian theory. The first solution is good but not the best, so it should be rejected, because the Galaxywire. net still does not receive the ideal cost reduction. Also, the local government still needs to expend more to keep company stay, and other companies will receive less support. In addition, the employees will earn less than before, it will make them inactive. Although it is moral and just in Libertarian theory, the company sacrifice own interest to other members’ interests, it cannot lead to a good consequence, because the benefits cannot make each member satisfied. Therefore, the first solution is not perfect due to the view of Utilitarian theory.