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This topic has 4 voices, contains 8 replies, and was last updated by OsmanMusah 54 days ago.
Viewing 9 posts - 1 through 9 (of 9 total)
October 6, 2012 at 12:01 am #1715
Osman Musah
Subscriber
http://forums.saylor.org/topic/ethics/
is it ethical for a foreign company to pay a Ghanaian worker far less
than a foreign national to perform the same job?
October 6, 2012 at 6:23 am #1718
Cuy
Subscriber
First off: I think your question would really belong into a sociological forum – that being absent (and
the course title being “business law and ethics”), I’ll try to give my personal, unprofessional view.
The short answer: No. This practice is not ethical.
The long answer: Businesses, especially publicly traded ones, will strive for maximizing profits. That
means they will try everything to get the best possible ratio from input to output.
An international company will rationalize that the average living standard in Ghana is lower than in
the home country of the higher-paid worker, that the higher paid individual had to move for the job
and/or that they are more experienced or have been with the company for a longer time.
3. However, the pay difference won’t be noted in the home-country of the company, so the public (the
target market) is ignorant of this practice.
For example: Coca Cola built a bottling facility in India in 1998. In 2003 it became apparent, that the
facility used up too much water – ground water levels in the area dropped. The water became too
salty to drink or to water fields – Coca Cola caused a drought.
But because it was half way around the world for large parts of their market, these unethical
business practices didn’t cause a problem for them (with “a problem” meaning a significant loss of
money for the company).
I guess the same holds true for your scenario: It does not make sense to pay local workers equally,
simply because it won’t change the public perception of the company at home. And because the
average income in Ghana is around 600 $US per month (Wikipedia told me, please correct me if I’m
wrong), they reason that the pay is fair in respect of the local normal income for the job.
October 11, 2012 at 4:34 am #1737
Joey Smith
Subscriber
I’m not quite sure I followed your logic all the way through, there, Cuy; because Coca-Cola used
unsustainable practices in an India bottling plant, paying local workers based on the local economy is
unethical? I don’t see the correlation at all. Let me be clear, if your story is 100% accurate (I’m not
going to bother fact checking it, we can stipulate accuracy for sake of the discussion) then Coca-Cola
did a terrible thing; what does that have to do with the ethics of paying workers in terms of the
foreign market instead of in terms of the domestic market?
For this topic, I would personally like to direct people to the second series of the “Ethics in America”
lecture series from the Fred Friendly Seminars. The sixth episode in this series, “Risk, Reward,
Responsibility: Ethics in Business”, covers an example very close to what we’re discussing here.
There are some very good discussions in the episode that talk about ways that a business can
ETHICALLY participate in foreign economies without discarding their entire opportunity for a lower
cost of business; in other words, I don’t think you can argue in complete abstract that it’s unethical
to paying a Ghanaian worker “X” for a job that a citizen of (say) the United States would demand X*Y
to perform – in fact, if a business desires to be ethical, outsourcing certain jobs can actually be really
good for the foreign economy, giving people opportunities that might not otherwise have ever been
available to them, and plowing money into local infrastructure to allow these corporations to meet
standards of quality of service, while still being sensitive to local standards in work environment and
cultural needs.
4. This reply was modified 70 days ago by Joey Smith.
October 14, 2012 at 6:33 am #1750
Cuy
Subscriber
@ Joey Smith
If people were paid in terms of the local economy, then why does the foreign worker earn more?
The core of the question, how I understand it, is not why the Ghanaian worker in Ghana earns less
than a US worker in the US, but why the Ghanaian worker in Ghana earns less than a US worker in
Ghana.
Equal pay for equal work. I don’t see why people of color, age or gender (let’s face it, women are
treated like a minority) should earn less than anybody else for doing the same job.
My mentioning of Coca Cola was just an example how business practices with disastrous
consequences for a foreign region are mostly ignored in the rest of the world. That gives big
corporations the freedom to behave however they like, as long as the shareholders are happy.
I’m not blaming you for not fact checking the story. But it seems like you haven’t heard of this
before, and that is exactly the point I wanted to get across – you don’t know of the unethical
practices of a corporation, thus your opinion (and more importantly: your behavior as a customer) is
not affected by it.
October 14, 2012 at 7:17 am #1751
Joey Smith
Subscriber
To address what you called out as “the core of the question”, I’m not sure what a “US worker in
Ghana” is, in this context; are you suggesting that if a US employee of Acme Corp goes to Ghana –
5. let’s say either as a consultant, or as a temporary worker during some kind of off-shoring spin-up –
that the US worker should be paid in terms of the Ghanaian economy for that term? Unless it’s a
completely isolated individual, the US worker still has to cover bills in their US economy, which
means to pay them in terms of a lower economy is not only unethical, it’s impractical in the extreme.
A “US worker in Ghana” by this definition quite obviously should be paid in terms of the US
economy, because he’s employed as someone whose compensation has to match the local economy
of his primary residence. If there’s some other definition of the term that makes your assertions
make more sense, I really don’t see what it is.
I don’t believe that color, age, or gender should affect pay, but paying according to the cost of living
for the individual is perfectly ethical. The cost of living for an individual living in Accra, Ghana
(chosen based on what data I could find in Google) is roughly 2 orders of magnitude lower than for
the part of the US where I live for, even a modest standard of living; how would it be ethical to pay a
foreign national (who likely has to maintain two different residences) the same amount that you pay
a local employee? “Equal pay” does need to mean “same exact dollars to everyone regardless of
locale”; we must consider the buying power of the money we give people in compensation, not just
the overall numerical figure.
I agreed with your assertion that unethical is unethical – changing the locality doesn’t make it less
so; however, as I don’t consume Coca-Cola products, I can’t say I voraciously consume news media
reports on their corporate practices. My “behaviour as a (non-)customer” is sufficiently affected by
the fact that they produce a filthy, habit-forming, chemical-ridden poison and market it as a
refreshing drink. Knowing that didn’t require me knowing their practices regarding India
groundwater, but merely looking at what they do as a company; and I think in most cases, you can
arrive at sufficient conclusions about most multi-national companies based on their behaviour in
their country of origin.
Yes, there are unethical companies out there; yes, some of them might use the current state of
multinational law to escape or evade the side-effects of certain business practices. I think we can all
grant that these events are deplorable, but also are not particularly relevant to the question of
“Should a foreign national get paid in terms of the economy of their primary residence, or of the
economy in which they are (presumably temporarily) being employed”.
This reply was modified 67 days ago by Joey Smith.
This reply was modified 67 days ago by Joey Smith.
This reply was modified 67 days ago by Joey Smith.
6. October 17, 2012 at 1:39 pm #1761
Cuy
Subscriber
I’ve noticed that I based my posts on my personal moral views, rather than a sense of business
ethics. I probably should not have done this.
It’s sad that the OP does not seem to be around anymore, to specify their case. So we are both
working on different assumptions as to the nature of the company and the people working there.
I’m afraid, this way we can turn around in circles forever.
So unless the OP cares to define the circumstances a little more precisely, I really don’t want to
argue about this topic.
Let’s just say that I generally agree with you, Joey. I guess I was really questioning, why there would
be a foreign worker (doing the same job) in the first place and assuming too much about the nature
of their stay.
October 17, 2012 at 4:37 pm #1764
Joey Smith
Subscriber
I agree, without more info from the original author, we’d probably just spin around the topic
forever; but thanks for the great discussion, Cuy! Sometimes just having the conversation can force
you to think through things that maybe hadn’t even occurred to you before, and I definitely found
value in engaging with you on this. :)
October 22, 2012 at 4:29 pm #1862
Nathan Thompson
Forum Moderator
7. Joey and Cuy, thank you so much for this debate. We love to see this kind of back and forth at the
Saylor Foundation. Thanks!
October 27, 2012 at 4:25 pm #1892
Osman Musah
Subscriber
Thank you all very much for taking time to delibrate on this topic.am so sory for beign out of the
discussion as it progress.i had little problem that took me away from the net for some time.@Cuy
what i meant was ,both workers reides in Ghana.thanks so much,i appreciate your contributions and
am most grateful for that.God richly bless you.
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