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The Ethics of Outsourcing Meets Business as Mission

By Virginia Thomas of Olive Technology - Globalization has created tough decisions for business and ministry leaders. In a down economy, should we be sending jobs overseas? What are the long term effects of outsourcing? How does offshoring affect the Business as Mission movement, and how can it be used for God’s glory?

It is 7:30 AM, and Vasantha Koorpad climbs into a rickshaw on the crowded street in Hyderabad, India. As the driver dodges scooters, cars, bicycles and buffalo, Vasantha answers her cell phone. It’s her boss, calling from America in the evening his time, asking her input on a potential software development project.

Vasantha is on her way to work at Olive Technology, a Great Commission Company based in Hyderabad. Over 11 years ago, Vasantha stepped into Olive’s doors for the first time as a junior programmer trainee. As the years passed, she grew in skill and experience, and earned both respect and responsibility. Now she is a project manager, and has overseen projects for myriad industries, as well as churches and para-church ministries.

Vasantha, a Christian, sees her faith integrate with her work daily.

“My words and actions should give a message to the people around that I’m Christ’s child. I’m interested in leading our people by example and serving our clients,” she said.

Is outsourcing unethical in a down economy?

As the US economy struggles to tread water, questions loom in the minds of American businesspeople and ministry leaders. Those who provide Vasantha and her team with the majority of their projects are forced to choose how to best steward their resources in a down economy. When organizations cut costs by outsourcing, they can help the organization survive and thus protect the jobs of the rest of the workers. However, tough questions are raised in board rooms across the nation as decisions like this are made. Is it wrong to outsource projects to companies in foreign nations when the domestic economy is in a slump? Are they hurting their own economy by outsourcing offshore?
Some experts say no.

“To the extent that we’re helping India grow, we are also creating new jobs here in the US because they’re going to be buying US-produced goods,” said Dr. Steve Rundle, Professor of Economics at Biola University and author of Economic Justice in a Flat World. “There are industries in our country that are shrinking because of globalization, but also industries that are benefitting—and those jobs actually tend to be better paying. In the long run, everyone benefits from allowing products and services to be exchanged internationally.”

Most economics textbooks reference the theory of comparative advantage, developed by David Ricardo at the turn of the 19th century. Simply stated, nations benefit from free trade when they focus on producing the goods and services they can develop more easily and cost-effectively than other nations. Wise nations purchase the goods and services difficult for them to produce from nations who can sell them for less.

Thomas Siems, a senior economist and policy advisor in the Research Department of the Federal Reserve Bank of Dallas said in a 2003 article, “International trade generates higher overall output by redirecting jobs to those who create the most added value—that is, to those who maximizetheir productive abilities. Put simply, the benefits of free trade can be summarized as: ‘Do what you do best. Trade for the rest.’”

Short term trials, long term benefits

While the economy benefits in the long run, outsourcing can still strike fear for workers in danger of having their jobs sent offshore.
“There is always displacement of American workers and of American supplier-firms and distributor-firms in the short term,” said Dr. J. David Richardson, Professor of Economics and International Relations at Syracuse University. “But workers who upgrade their skills, and suppliers and distributors who narrow their focus to core competencies and upgrade them find their displacement brief, and their new activities more remunerative and stable than their old.”

Economist/journalist/author Thomas Friedman not only agrees with Richardson, but strongly encourages Americans to focus on the education and innovation necessary for success in the global marketplace. Outsourcing provides the opportunity for highly-skilled workers to focus on higher-skilled and better-paying tasks than they could have before. Skilled workers as whole have more to gain than they do to lose when it comes to outsourcing. Those in danger, however, are low-skilled workers who choose not to grow and upgrade their skill sets.
“…while protectionism would be counter-productive, a policy of free trade, while necessary, is not enough by itself,” Friedman said in his highly-publicized book, The World is Flat. “It must be accompanied by a focused domestic strategy aimed at upgrading the education of every American, so that he or she will be able to compete for the new jobs in the flat world.
Who is my neighbor?

While some economists say that in the end, everyone benefits from outsourcing, the question still looms for Christians about the ethics of outsourcing in the short term. What about those low-skilled nationals? Is there a moral obligation to employ those who hold the same passport you do? Do you owe your fellow citizens more loyalty than non-citizens, and to what degree?
Dr. Richardson sees two possible answers.

“If your answer is ‘No, none,’ as many Christians claim, using ‘Who-is-my-neighbor?’ reasoning from Jesus, then there isn’t much of an ethical issue,” Dr. Richardson said. “If your answer is ‘yes, and to a modest degree,’ using citizens-as-family style or Galatians style (‘especially to the household of faith’) or buy-local style reasoning, then the ethical issue is the trade-off between loyalty to ‘your people’ and charity toward the poorest.”

Dr. Rundle, who teaches Business as Mission classes at Biola, has recently visited BAM companies in Thailand, Romania, Moldova, China and India for his upcoming book, the second edition of Great Commission Companies. Dr. Rundle is keenly aware of the ministry potential of outsourcing.

“As Christians, as foreigners of this world, sojourners, this world is not our home and neither is the United States. We need to think more globally in terms of our business and ministry outreach,” he said. “We have advantages here [in the United States]. We don’t want to ignore unemployment and say it’s not important, but on the other hand, where are people most needy?
It still comes down to [places like] India, and you can create four or five jobs in India for the price of one here. So you can see the benefit, and I don’t think God shows preference. I don’t think he is more concerned about American employees than he is about Indian employees. It’s tough though,” Dr. Rundle said. “We’re very nationalistic by nature, but I don’t think God is nationalistic.”

Ron Fleming, CIO of Biblica (formerly the International Bible Society,) has outsourced a number of Web development projects to Olive Technology. Like Dr. Rundle, his faith causes him to look beyond the bounds of nationalism.

“I love my country, but the answer is the kingdom of God takes precedence,” Fleming said.

BAM opportunities in a flat world

Fleming stated that if the prices were equal, he would contract an international BAM company over a secular domestic company. While cost was a factor in his decisions, so was choosing an organization that would utilize their resources to do missions work. He selected Olive because of the multiple bottom lines of the company: financial, spiritual and social.

While outsourcing will force westerners to make horizontal and vertical job shifts, it also provides a greater impact for influencing individuals in hard-to-reach countries. Improvements in communications make it possible for more interactions and relationships across oceans and national borders. As Dr. Rundle stated in the first edition of Great Commission Companies, globalization does not catch God by surprise.

As Fleming, Rundle, Friedman and others have realized, the change is upon us. Outsourcing and offshoring are here to stay. Globalization, or flattening of the world, brings its share of challenges to the American workforce. Nevertheless, rather than fighting the change, the body of Christ will do well to embrace it. Perhaps a better question than “how can I protect myself from the change?” is “God, how will you be glorified through this change?” As the global economy continues to specialize, we as Christians can devote ourselves to learning and growing or futilely resisting the change occurring around us. We can choose fear, or boldly move forward in faith. Perhaps rather than asking if our jobs are safe, we should ask how we can use the creative abilities God gave to create better jobs for ourselves and others. Perhaps we should ask how ministry can occur through the communication and interactions facilitated by globalization. Perhaps we should ask how we can advance the Kingdom of God in a flattening world.

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posted by Justin Forman | 9.15.2009 - 9:02 AM

5 Comments:

Amen and amen. Virginia, thank you for sharing your poignant thoughts on this delicate issue. I believe entirely too many American believers want to throw stones at globalization and our flattening world, neglecting to recognize that with its challenges come a tremendous amount of opportunities for the Church and the world.

Thank you,

Chris Horst
chorst@hopeinternational.org
commented by Blogger Chris Horst, 10:06 AM  

Awesome article Virginia!

Randy Griffin
commented by Blogger rgriffin, 8:04 AM  

I love it. God is answering this morning the question I was just contemplating last night. I'm starting a new B2B venture and I'm going to have to eventually outsource if I want to expand. My mentors have recommended global outsourcing, but I was concerned about the ethics of national loyalty. Thanks, the info from this post is certainly a great place to start finding solutions from a BAM point of view.
commented by Anonymous Anonymous, 9:32 AM  

Virginia,

Thank you for the thoughtful, challenging and nicely written article. I appreciate your insights and the Kingdom-building work Olive Technology is engaged in.

May we all ask what God is up to in our world, listen for how He would have us join Him in that work, and take action accordingly - whether in our neighborhoods or around the world!

Grace and Peace,

Todd Kemp
tkemp@convenenow.com
commented by Anonymous Anonymous, 10:36 AM  

Great article! This hits the nail on the head. It helps us at GlobalHires give better answers to people's questions. www.globalhires.com People need to ask themselves, "Who is my neighbor?"
commented by Anonymous Anonymous, 11:49 AM  

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