A Response to: If a company uses a foreign supplier with cheap labor that still produces a good product is that bad ethics or good business?

It is not unethical under certain circumstances if a U.S based company chooses to buy its products from a foreign supplier that uses cheap labors. For instance, why will a company want to pay $20 per hour to a U.S based labor for producing the same product that a labor right across the border or in another trade pact country could produce for $ 5 per hour? You do the math. Though we must also consider transportation and other associated cost involved for transporting the goods, it is cost effective to produce or buy the good from overseas.

If the supplier is not using child labor to produce its goods and if they are compensating their employees well based on the nation’s pay scales and is also obeying international human right laws, it is not unethical. However, if the supplier is violating human rights law, it is unethical because it against the core-values of the American society.

To stay competitive in today’s global market, a company will have to make use of those opportunities in order to compete with its competitors or else it will go bankrupt. Will you as a manager pay a higher price to a U.S. based supplier for the same quality goods that you can purchase from overseas for an affordable price? Good luck with that… because your competitors are possibly buying from an overseas market and giving their customers an affordable price on goods that you will be selling for a higher price.

Today’s educated consumers will rather buy from a company that provides quality and affordable price then buy the same items from a company that sells it for a higher cost. You will end up with a 90% discount to get those high price goods out of your warehouse.

Businesses are able to provide customers with lower cost if their overhead cost is reduced. No businesses with a high overhead cost can provide goods to customers for a cheaper cost…good luck with their bottom line if they did.

Over all, my point is not for businesses to exploit its customers or be unpatriotic, but they should make use of opportunities such as buying from foreign suppliers in order to stay competitive and provide reasonable price for consumers.