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Acme, Inc. is a clothing manufacturer that employees 1,500 people in the state of New York. Unfortunately, it has experienced two straight years of business losses and must increase profits to stay in business. Acme is bidding on a contract with a major retail chain and must come in as the lowest bidder to win the contract. To cut costs, Acme is considering purchasing T-shirts from China from a company that is known for cheap labor and sweatshop conditions.
This is the question: As you have probably already experienced with some goods you purchase, this scenario is very common in the real world. On the one hand, there is the issue of being able to remain in business and save the jobs of some; companies often seek less expensive alternatives. But what are the ethical costs associated with such an approach?
Expert Answer
These costs can be major as well as minor. The ethical costs that are associated with the given scenario are as follows:
- The cost that god with job security I.e the salary of employees who are employed at Acme.
- The costs that goes with the psychological fear of losing job and other benefits.
- The fear of finding another job.
- Fear of losing business for the employer
- Exchange rate fluctuations for the employer.
- Company will not be able to attract fresh talents in the home country as there will be no job security.
These are a few examples of ethical costs associated with the above scenario.
