Ethics Issues in Outsourcing to Emerging Markets: Theoretical Perspectives and Practices

Document Type

Book Section

Publication Date

12-1-2019

Publication Title

Corporate Social Responsibility in Developing and Emerging Markets – Institutions, Actors and Sustainable Development

Publisher

Cambridge University Press

First page number:

336

Last page number:

347

Abstract

Offshoring has become a popular practice for multinational corporations (MNCs), with emerging markets being regarded as attractive locations. Although offshore outsourcing has economic benefits, it also involves several ethical issues, such as poor working conditions, child labour and environmental pollution. To identify implications for how to establish ethical practices in MNCs’ offshoring operations, we discuss theoretical perspectives (i.e., institutional, instrumental and normative) on MNCs’ motivations for being socially and environmentally responsible. Based on a review of these perspectives, this chapter provides practical guidelines for both MNCs and policymakers, including (1) re-designing governance, (2) establishing industry-level action and (3) developing institutional capacity. Developing both public (e.g., government regulation) and private (e.g., corporate code of conduct) governance mechanisms is important. Also, MNCs should take collective action at the industry level. Lastly, MNCs should provide resources and capacity to outsourcing companies and local communities to contribute to alleviating ethical concerns in emerging markets.

Keywords

Corporate Social Responsibility; Emerging Markets; Multinational Enterprises; Offshoring; Sustainability

Disciplines

Business | Business Law, Public Responsibility, and Ethics

Language

English

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