Day 58 – Q 4.A company in India outsources 50% of its activities to a firm in Philippines and fires 50% of its employees to increase profit? Is it ethical? Critically comment.
4. A company in India outsources 50% of its activities to a firm in Philippines and fires 50% of its employees to increase profit? Is it ethical? Critically comment.
भारत में एक कंपनी फिलीपींस में एक फर्म को अपनी गतिविधियों का 50% आउटसोर्स करती है और 50% कर्मचारियों को लाभ बढ़ाने के लिए निकालती है? क्या यह नैतिक है? समालोचनात्मक टिप्पणी करें।
An unethical act is one that violates someone’s right, leads to dereliction of someone’s duty, and in general is against the normative ethical standard.
To judge whether an act is ethical or not requires ethical analysis of the act using some ethical standards.
It is not ethical
a) From the Perspective of fired employees
- Emotional and psychological suffering.
- Profitability over social responsibility. It violates virtue based ethics.
- Constant fear of being fired by other employees as well.
b) General perspective
- As per Gandhiji corporates must act as trustees of employees. Firing employees without adequate compensation goes against trusteeship principle and deontological ethics.
It is ethical
a) Perspective of the company
- Right to make the company profitable.
- If there is no contract for tenure then its company is not bound to not fire the employees.
- Firing also helps to keep employees efficient and competitive. From teleological perspective, with telos (end) of efficiency, firing of employees can be justified.
b) General perspective
- Outsourcing helps to keep economy efficient which is a common good.
- Efficient economy is helpful for everyone, especially for the poor. It helps in growth and development of a nation. Hence firing employees and outsourcing can be justified by utilitarian principle.
- Job loss of employees also means new jobs elsewhere.
Aristotle said there cannot be any absolute ethical standard. Buddha also said that intention of an action is more important than the action itself. Hence if firing is done with the consideration to maximize benefit to the society and minimise loss to the effected people then it can be considered ethical.
Points to consider while firing employees
- Any decision of firing of the employees must be announced well in advance to avoid emotional and psychological shock.
- Adequate compensation to fired employees – may be salary of three months.
- Employees must be given skill training and updated market information to feel more confident to look for new job.
Ethics is contextual. Ground reality must be taken into ground for ethical analysis. The manner in which employees are fired will decide if action can be considered ethical or not.