The Chinese shoe company has opted to shift its operations to Ethiopia, owing to the advantage of low-cost production that Ethiopia offers, compared to China. However, while the strategic decision is informed by the company’s interests, there are various ethical considerations that arises, all of which touches on the company or the relevant stakeholders in one way or the other.
According to the Consensus theory, the accts of the Chinese company to shift its operation to Ethiopia is unethical. This is because; the Consensus theory provides that the absence of conflict constitutes the equilibrium state of the society, such that whenever there is no conflict, the status quo should be sustained (Krueger, 1998). The Chinese shoe company has decided to shift its operations to Ethiopia as a strategic move that will reduce the costs of production and earn the company high profitability. However, the decision to shift the operations of the company disturbs the equilibrium and the status quo, because it would mean the loss of jobs and means of livelihoods for the previous employees in China. Further, the Consensus theory provides that the core principle of social life is consensus, and thus the existence of a society should be defined through common interests and values (Krueger, 1998). However, if the Chinese company shifts its operations, the element of consensus with current employees will be lost. This is because, the company will not be shifting based on common interests and values with the employees, but solely on self-interest grounds of increasing profitability. Therefore, the shift of the company’s operations would not only create a conflict but also erode census, where in maintaining the status quo, a conflict would be avoided and consensus sustained (Krueger, 1998). Thus, the Consensus theory therefore requires that the Chinese company should maintain its operations in China, to avoid creating a conflict.
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Nevertheless, the Consequentialist Theory holds an entirely ethical view regarding the Chinese company’s move to shift its operations to Ethiopia. According to the Consequentialist Theory, the rightness or wrongness of an action or decision should be based on the consequences of the action (Tully, 2006). In this respect, the theory holds that if the outcome of an action or decision is good, then, the action is ethical. Thus, when interpreted further, Consequentialist Theory would mean that as long as the goal attained is positive, then any means of achieving the goal is acceptable (Tully, 2006). Therefore, the Consequentialist Theory holds the view that since the Chinese company will achieve the target goal of reducing the costs of production and thereby increasing productivity, then, its decision is moral. The Consequentialist Theory provides that any party should carry out that which benefits it, and leave out that which has no benefit (Tully, 2006). Therefore, according to the Consequentialist Theory, it is ethically right for the Chinese company to seek that which is beneficial to it, which in this case is the profitability increase.
Contrary to the Consequentialist Theory, the Utilitarian Ethical Theory would hold the actions of the Chinese company to move its operations to Ethiopia as unethical. This is because, the Utilitarian Ethical Theory moves beyond the concept of the outcome or consequences of an action to a single party, and seeks to address how the action impacts on others (West, 2004). The theory therefore concerns itself with evaluating the consequences of an action from both sides of the divide, to see how each party gains or losses as a result of a decision or action made. In this respect, the Utilitarian Ethical Theory widens the scope of consideration from only considering one’s own interests and goes further to take into account the interests of others (West, 2004). Nevertheless, in recognition that a single decision must have both negative and positive consequences on the different parties, the theory therefore provides that the ethical action or a moral decision is that which creates the greater good for the greater number of people (West, 2004). In this case, the action of the Chinese company to shift its operations to Ethiopia has to be weighed based on how it impacts all parties. For example, if the company shits its operations, it will benefit through profits increment, but it will affect the current employees in China negatively through creating unemployment. Additionally, after shifting its operations, the Ethiopians will suffer the detrimental impacts of poor working conditions, low wages, lack of technology transfer and lack of skills transfer and development, because the Chinese company will shift its production expertise and technology to Ethiopia. In this respect, while the move to shift operations benefits the Chinese shoe company, it is detrimental to the larger number of people. According to the Utilitarian Ethical Theory, since the action/decision does not create happiness for the many, it is unethical and should not be implemented.
Lastly, Ethical egoism would support the position of Consequentialist Theory, which holds that the decision of the Chinese company to shift its operations is ethical. This is because; the Ethical Egoism Theory provides that a party ought to pursue that which is in the best interest of the party itself (Österberg, 1988). Therefore, the theory provides that the Chinese shoe company should pursue the shift of operations, because it leads to profitability increment, regardless of how the other parties are affected.
In conclusion, different theories hold different positions on the actions of the Chinese shoe company. While the Ethical egoism and the Consequentialist Theory hold the action of the company shifting its operations to Ethiopia, the Utilitarian Ethical Theory and the Consensus theory hold that the action is unethical. Nevertheless, despite the positions held by these theories, this discussion holds that he Chinese company’s decision to shift its operations to Ethiopia is unethical, because it does not create happiness and benefits to the many.
- Krueger, J. (1998). On the Perception of Social Consensus. Advances in Experimental Social Psychology 30, 163-240
- Tully, P. A. (2006). Refined consequentialism: The moral theory of Richard A. McCormick. New York: Lang.
- West, H. R. (2004). An introduction to Mill’s utilitarian ethics. Cambridge [u.a.: Cambridge Univ. Press. Österberg, J. (1988). Self and Others: A Study of Ethical Egoism. Dordrecht: Springer Netherlands.