Offshore or Off-Course? The Ethics of Corporate Migration

Welcome to my new column, where we’ll tackle ethical dilemmas in the workplace. I begin by acknowledging my own limitations — I am not a trained philosopher, nor do I claim to be more ethical than others. However, I have a deep interest in ethical issues, coupled with years of experience advising individuals on how to navigate difficult decisions between right and wrong.

When I address your dilemmas, I will approach them with careful consideration, based on the information at hand. Still, there will always be more nuance to explore. There will be moments when you feel that I have overlooked an important perspective or drawn conclusions you find debatable. I encourage you to share these thoughts. Discussio mater veritas est (truth is born in controversy), as they say.

With the humility box now checked, let’s proceed to today’s dilemma:

I’m a senior manager at a mid-sized tech company. Recently, we’ve been debating whether to shift a number of development and testing teams to a cheaper overseas location (India and Philippines). This move would cut costs significantly, which would make our balance sheet look much better (and shareholders happier) and allow us to stay competitive. However, it would mean laying off a large portion of our local workforce here in Chicago, many of whom have been with the company for over five years. I’m torn — whom do we really owe our ethical obligations to in this case? Our shareholders? Our employees? Or even the communities that would be impacted by our decision? — TS

Your dilemma is a classic one in business ethics, where the obligations of a company to its shareholders, employees and broader community often come into conflict. At the core of your question is: Whom do we owe ethical obligations to in the business world? Most people are guided by ethical principles in their personal lives, but business ethics challenge us to extend those obligations beyond our immediate circle — beyond friends and family — to people with whom we have only an “arm’s-length” business relationship, and even to total strangers.

Historically, the idea that businesses exist purely to maximize profits fed the public’s cynicism toward businesspeople. In Japan and England, for instance, the nobility of past centuries tended to look down on merchants. In India, the business class is still today relegated to the second-lowest caste, just above the “untouchable” caste, in a four-tier caste system. Hermes, the ancient Greek god of merchants, was also the patron of thieves and taught his lessons through deception and trickery.

This perception — that businesspeople are shrewd and untrustworthy — stands in stark contrast to the modern view that businesses drive technological advancements benefiting society. Whether in medicine, healthcare, transportation, agriculture or tech, today’s businesses contribute far more than in centuries past. Therefore, the reputation of business should be a step above its historical origins.

In other words, businesses of today have ethical duties that require them to consider the welfare of others, not just their own, in choosing how to act. This creates a unique challenge: balancing the drive for profit maximization — which is at the heart of any business — with the broader ethical obligations owed to employees, customers and the communities in which they operate.

In your case, I would advise you to resist taking the easy path of immediate profit maximization and instead focus on a more balanced, long-term strategy. Could you implement gradual cost-cutting measures that don’t immediately displace workers? Could reskilling or redeployment programs help those affected transition to new roles within the company or community? 

While the pressure to cut costs and meet shareholder demands is real, the decision you’re grappling with presents an opportunity to shape the kind of company you want to work for.

Have a response? Share your feedback on what I got right (or wrong). Send me your comments or questions.