When in Malaysia W.B. Milestone, Inc., a manufacturer of sophisticated computer

Question

When in Malaysia

W.B. Milestone, Inc., a manufacturer of sophisticated computer parts, recently moved the operations of one of its divisions to Malaysia.  The Company has hired several hundred workers at wages considerably below their U.S. counterparts, but consistent with the prevailing wages in Malaysia. Not only is the Company benefitting from the lower wages, it is also able to reduce its costs further because of the deplorable factories used for its operations (no air conditioning and poor ventilation), it can dispose of waste without any government oversight, and government inspectors are routinely given gratuities for favorable inspection reports or to otherwise grease the skids for the Company.  The Company’s operations are in all key respects in accordance with the laws of Malaysia. You were recently hired as a senior vice-president in charge of the Malaysian operations and you are concerned about what you have seen and heard as to how the plants are being operated.  When you called a colleague in the states, he said to you “keep your mouth shut and when in Rome do as the Romans do”.  What are some of the ethical issues you should consider in charting your course of action and how would you resolve them?

Explanation / Answer

There are no defined universal moral principles, which make morality subjective to cultural tastes. These differences in moral practices across various cultures give rise to the concept of ethical relativism, which holds that morality is relative to the norms of a culture. Hence, the right and wrong actions actually depend on the moral norms of the society those actions/decisions are being taken. The states colleague’s suggestion “when in Rome do as the Romans do” is in accordance to this theory of ethical relativism.

When charting my course of action as the Senior VP of Malaysian operations for the company, I would consider the theory of ethical relativism. Although Malaysian law allows the company to pay lower than US norms, and deplorable working conditions in the factories, I need to decide what can be morally justified and what cant to ensure my decisions and actions are ethical.

Paying Malaysian workers lower than what their counterparts are paid in the US is ethically not wrong in my view, as it allows me to control or reduce the prices of my products, which in turn is benefitting my company’s stakeholders: customers and the shareholders which is my first ethical responsibility. Companies chose foreign locations to setup their manufacturing operations to take the advantage of these lower labor costs and transfer the benefits to the customers. If I decide to pay the Malaysian workers by US standards, the benefit of manufacturing in Malaysia will diminish and I will be forced to close my operations there which in turn will take these workers out of job, which is not ethically justified.

As for the deplorable conditions in the factory, I will set a basic requirement that would be needed to be followed, like proper ventilation and safety. But, in doing so I would have to ensure that the cost of better conditions is not high enough to eradicate my lower labor cost advantage.

Lastly, inappropriate waste disposal and bribing the inspectors for favorable inspection reports is not ethically justified in any culture in my view, hence the theory of ethical relativism does not hold in these scenarios. Hence, I would work towards stooping these practices in my factories, but for this I would have to work towards improving the working conditions and processes/systems as required by the Malaysian law.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.