How a ‘model’ employee got away with outsourcing his software job to China

Description: Bob was his company’s best software developer, got glowing performance reviews and earned more than $250,000 a year.

Source: www.theglobeandmail.com

Date: Jan 17, 2013

future-IT17sr1

Bob was paying a Chinese firm about $50,000 a year to do his work, then spent the day surfing the web, watching cat videos and updating his Facebook page.

“This particular case was pretty unique,” computer security investigator Andrew Valentine, who helped uncover Bob’s scheme, said in an e-mail to The Globe and Mail. “We thought it was actually pretty clever.”

Mr. Valentine made Bob’s tale public in a blog post on Monday and it has since been the talk of tech websites.    Read Rest of Story 

 Questions for discussion:

1. Is there an ethical dilemma in what Bob was doing at his place of work?  Why or Why Not??

2.  What benefits can you see with outsourcing as a company?

3.  What pitfalls can you see a company risking by outsourcing?

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48 thoughts on “How a ‘model’ employee got away with outsourcing his software job to China

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  3. Stuart Russell

    A huge ethical issue with Bobs conduct is obvious as he deceived the company who hired him that he was producing his own work; this is undeniable, and Bob’s employers were right to pursue further action. However, the more pressing concern is that adequate security measures were not in place to stop such behavior (which according to the media is prevalent), and most importantly, that someone overseas could do an outstanding job for far less pay than a western worker. This media piece highlights more of the inequality globalization has produced, as a western worker is paid five times more than his overseas outsourced worker for producing similar work. The economic advantages and disadvantages of this practice must be taken into account from both the views of the outsourced workers and those who are working for foreign companies, as security and financial concerns both exist.

    Reply
  4. Jingyi Wang

    Well, it is really difficult to say it is right or wrong in the ethical dilemma. Bob was hired by the company, so he is sure qualified with the occupation, and he finished his job on time with a good quality although it is not what he has done. But if I am the manager of Bob, I will feel cheated by him, I trust my employees and give them enough freedom that they can even do their work at home, but they are using other people’s work to fool me, which is really a bad thing.
    Then not only the manager will feel hurt, Bob’s behivior also cause a potential damage to the internet security to the company. He gives out the company’s security PIN without the permission of the company, which will give the offenders an oppotunity to steal the company’a secret. Outsoucing is a pretty common business appearance nowadays, but the right use of it still need pepole to regulate themselves. In this case, I think the company will change their working system and their situation can also be a warning to all other companies.

    Reply
  5. Chyan Tibert

    There is growing trend and an increasing amount of benefits to outsourcing as a company. The reduced costs for the same quality work or better being the greatest benefit. If your company is able to pay someone in another country one fifth the salary they would pay an employee in North America, this can greatly increase the companies profit. You also have to ask if this is ethically right to outsource from your country, decreasing the economies revenue and how this will affect the country in the long run. The recession in North America has made it harder for people to find jobs and our unemployment rate is rising. This is becoming a increasing burden on our economy and we have to wonder why we are allowing companies to outsource jobs that our country needs. I think that Canada should offer incentives to hire locally and stop outsourcing, such as heavy taxation for outsourcing.
    Bobs company had a policy in the work place and it was clear that what he was doing was ethically wrong. Bob was taking recognition for work he had not in fact done and this is a form of plagiarism. Also he was getting paid to do this job and was only paying the person who was actually doing his job one fifth of the salary.

    Reply
  6. Jarett French

    There is a clear ethical problem with outsourcing the work you are required to do by your employer. In the terms of employment between an employee and an employer it would typically state that the work is to be done by the employee in return for said wage. If Bob had been a contractor working for the company and not an employee, then it could be easier to argue that the outsourcing was both legal and ethical. But in this case since Bob was an employee it becomes a dishonest act that jeopardizes the trust outlined in the employment agreement.

    Outsourcing has many positive aspects. The clear positive in this case is the fact that the company that Bob was outsourcing too was willing to the same work at a fifth of the cost of Bob himself, plus there would be no benefits given to the replacement outsourcing company which would save the company a lot of money over the long run.

    Some very clear negatives in regards to outsourcing are the fact that jobs would be leaving the country. The job where Bob was making $250,000 a year would no longer exist, which hurts the local community that the business operates in.

    Reply
  7. Lauren Gallimore

    Yes, an ethical dilemma exists when Bob outsourced his job. An employee does not have the right to make decisions about outsourcing, it is up to the management of the company to decide if outsourcing is viable or desired. Bob also took credit for the work he did not complete and accepted raises and complements on his behalf. This outsourcing also gave an outsider access to the secure internal network of the company, which could have allowed for leaking of confidential information or computer viruses.
    There are many advantages to using outsourcing. For example, an employer could have a minimum number of employees year round and then outsource during busy times to prevent paying additional wages. Also, if a the company is small, it is too expensive and time consuming for them to produce all materials that go into their product. Outsourcing as a way for them to keep costs down. Outsourcing activities that are complementary to the company’s main function, for example the accounting department, can allow them to focus on the production of their main product. It will also allow for lower overhead cost. If a company is doing a special project that requires skills that the current employees do not have, outsourcing this work will allow for the completion of the project. Hiring people that are experts in their field help complete tasks faster and at a higher quality.
    A disadvantage of outsourcing is that managers lose control over sections of the business and these outsourced companies may have different priorities and different standards for work. Also, outsourcing allows for more people to have access to secure, confidential information and it increases the risk of leaking private data. In addition, people working within a company have a history with the clients and may have a better understanding of their business, strategy and culture than an outsourced employee.

    Reply
  8. Jarrett Potvin

    There is an ethical dilemma present in Bob’s action. The ethical issue is that he did not only just outsource his job to a Chinese firm he took credit of the work as is own. Since Bob took credit he received personal gains in the form of a $250,000 a year salary while only paying the Chinese firm $50,000 of his salary. There are benefits for a company to outsource their workload. One advantage is outsourcing reduces the costs of the company. This occurs because of the lower wages that can be given to citizens of certain countries like China for the same amount of work. Another advantage is that outsourcing can increase the capacity of the company. This advantage can also be twisted into that the country where the outsourced work is being done can be used to do the base or input work and have the inputs shipped to the home country to be assembled and put into a working state causing an increase capacity. But there are disadvantages to outsourcing as well as highlighted by the article. The biggest of problem with outsourcing is security issues especially in technology based companies. Since outsourcing can mean that those who are being outsourced to need access to company computer systems giving access to potentially sensitive information. With access to this information the company being outsourced to has the potential to steal this information as use it themselves.

    Reply
  9. Swati Gade

    There is definitely an ethical dilemma in what Bob was doing at his place of work. He was getting paid for doing his assigned job. By outsourcing his job he has forfeited his right to earn that money he is getting paid. The company has no knowledge of this so in a way Bob is cheating the company by paying someone else to do his work. Bob is passing off someone else’s work as his own and gaining false appreciation and salary increases. As a company, outsourcing is very cheap as seen in this case; Bob’s job is worth a mere $50,000 when outsourced as compared to the company paying Bob $250,000. The company can get great quality workers who are efficient the field. Multinational companies can provide a lot of jobs in underdeveloped countries and help with their economy. Some pitfalls with outsourcing are unequal labor laws, harsh working conditions, low government regulations, and protests of social activists. The employees working in these outsourced companies may include under age children working in harsh environments. The government in these countries may not have regulations put in place to prevent multinational companies from exploiting the workers by providing harsh working conditions and cheap labor.

    Reply
  10. Sheri Durina

    What Bob was doing was absolutely unethical. A company may have the option to outsource and it may be a very advantageous decision for a company – but it is their decision. It is not up to an individual employee to determine. Bob was being paid by his employer to do ‘his’ job. Outsourcing his work may have been clever and it may not have had any unfavorable effects on the company, but outsourcing the software development of the company was not Bob’s decision to make. Bob’s actions were not only unethical but not really in his best interest either. Was Bob actually capable of doing his job? If something happened and he was required to change jobs, would he actually have the skills that his resume would show? By outsourcing his job Bob was in reality impeding his own skills and career advancement.

    There can be benefits to outsourcing. As can be seen in the ‘Bob’ scenario, cost can be a huge benefit. The Chinese company was performing Bob’s job for $200,000 less than he was, and they were doing a great job. Along with reduced salary costs, there would be reduced costs for all other employee related costs. I.e. Benefits, bonuses, etc.

    There can also be some pitfalls with outsourcing. With outsourcing comes reduced control for the company. This can lead to concerns with security and overdependence on the external vendor. If there are issues with the external vendor and a new one must be found, the outsourcing company may have very little knowledge of what the external vendor was doing. This lack of knowledge of its own services could cause significant issues.

    Reply
  11. Alicia Dyck

    Considering that Bob is outsourcing the job that he is paid very well to do and violating company policy, he behaviour is completely unethical. This is because of how he went about doing it. Bob went against policy and should not have outsourced his job, regardless of how cleverly he was able to do it. However, in one way, Bob may have helped the company in the long run. This is because he clearly pointed out that outsourcing could be a viable option for the company he was working for.
    The benefits of outsourcing for any company is that it may be cheaper for the company to do as opposed to hiring a person to do each job within the company. Considering this sitauation, the company that Bob worked for should consider outsourcing some jobs to decrease costs. Through doing this however, they may a few problems present themselves once the process of outsourcing is completed. The first is that employee moral would go down drastically because employees who’s jobs were outsourced would be laid off, which would affect the feelings of job security throughout the company. Another potential risk is that the company that is used to outsource may do things differently and not conform to the policy of the host company. Also, through this, a substantial amount of control could be lost for the company through not being able to control how the outsourcer goes about conducting their business and getting the information necessary to do the work that has been granted them. Considering these risks, I would not suggest that this company outsource many of the jobs in the company although outsourcing a few may be a good idea.

    Reply
  12. Callie Matz

    I believe that it was an ethical issue. He was stealing from the company in the form of time. He was also dishonest to the company he was working for and the company he was outsourcing to. He was stealing the work of the Chinese company and lying to his employer and passing it off as his own. This is dishonest and unethical.
    As a company, outsourcing can save the company a ton of money if they can find another company to do the job as well (or better) than they can do it and be guaranteed that the company they are outsourcing to will not reveal any insider information that could compromise the main companies strategy. Outsourcing can ensure that portions of production that do not add value to the company can be fulfilled in the most economical manner which should mean lower prices for consumers.
    By outsourcing, a company risks losing some autonomy in the production of their product or service. They are also at risk for negative press for reducing the number of local jobs and being the reason for unemployment and job loss. If the company outsources to the wrong places like Nike did, they could be at risk for lawsuits from human rights organizations and have to deal with more bad press about the social responsibility of the company. When a company is outsourcing, it is important that they look into all the options and risks associated with it in order to avoid bad press and costly lawsuits.

    Reply
  13. Edwin Owen

    I think that this situation presents a strong ethical dilemma. Indeed, in my country (Belgium), a employment contract is legally considered as “intuit personae”. It means that a company decides to hire someone because of his qualifications, experience,… It induces the fact that each employee has the legal obligation to do his work personally. If a Belgian employee decides to outsource his work, its company gets the right to break his contract quite easily.
    I think that this situation is totally logical. If a company pays you a salary, it’s because she wants to use your skills and knowledge. In the case where you decide to outsource your job, men can think that you destroy the reason of your hiring.

    Another problem is the fact that “Bob” allows outside people to get access of the intranet of the company. By definition, an intranet is supposed to stay inside the company. Indeed, private information can be exchange inside this network. Nobody can predict if the Chinese computer scientist will sell this information to competitors or not.

    A company can decide to outsource some parts of its activities but it’s necessary to take into account all the drawbacks and advantages of this situation. The most important advantage is that generally you will pay less money than before the outsourcing but in the other hand, you will get a lower quality work. In the case of the article, the company doesn’t enjoy the benefits of the outsourcing but she still get the drawbacks of this situation. So we can definitely think that the action of the employee presents ethical concerns.

    Reply
  14. Landon Feser

    From my point of view, there is definitely an unethical dilemma in this case. It is not so much that outsourcing is unethical, because it’s actually quite wise in most situations, but for the simple reason that Bob was cheating the system entirely. Bob was being dishonest to his organization by continually telling them that he was the one doing the work when in fact he was not responsible even though the work that was getting done was excellent. He was making vast amounts of money off of someone else, and not doing any of the work.
    There are major benefits to outsourcing as a company. If outsourcing is done ethically and responsibly, it can significantly reduce costs and allow more time for things that the organization is more constructive with. Outsourcing can greatly increase the productivity of a firm and as a result increase profits. With that being said, there are also major drawbacks and severe ethical concerns if a company is outsourcing such as Bob did by outsourcing his work to China without the organizations consent and other examples such as Nike and their outsourcing projects to third world countries. The other major pitfall of outsourcing a product or service is that the origin company has limited to no control over the final product and this in itself may lead to further issues.

    Reply
  15. Jonny Kostiuk

    I believe the biggest issue with what Bob was doing was lying to his work and stealing $200,000 a year, when the company could just outsource his job and pay $50,000 a year to the Chinese company. Because his job could be outsourced by the business on which he worked he should fell lucky to have that job and make that much money. I think he must be a lazy person because he is at work anyways so he should just do his work while he id there and earn his money. The company could use this to save money and do the exact same thing Bob was doing with the same Chinese company because they were doing a great job. They should continually use that in his place as a penalty for what he did. The pitfalls to this are the other employees in the firm could start to fell threatened and maybe seek new employment, which probably would hurt the firm since outsourcing is possible. Overall this was unethical by Bob and his job should remain outsourced but the rest of the employees should remain and no other jobs within that firm should be outsourced.

    Reply
  16. Devin Phalen

    Outsourcing is a disturbing trend in our western society, and Bob’s scheme was just a small-scale version of the capitalists lining their pockets at the expense of local and foreign workers. The local workers lose their $80,000/year job, while the foreign workers do the exact same work for $10,000/year and the capitalists pocket most of the difference. It is an exploitation of labour and is immensely damaging to developed economies. Outsourcing (coupled with a regressive tax system) signaled the end of middle class in America as the gap between rich and poor continues to grow. This is increasingly becoming a bigger and bigger problem in Canada as well, but at least the progressive tax system evens the wealth divide somewhat.

    I’m not sure why we would call Bob’s scheme unethical, while we allow corporations to do the exact same thing, only on a much larger scale? Either they are both ethically ok, or if not, we need to start holding North American companies to the same ethical standards as their employees. It is extremely sad to watch corporate CEO’s treated like celebrities for increasing profits in this way; any idiot without a conscience could duplicate the process. Globalized outsourcing is definitely good………good for the morally corrupt.

    Reply
  17. Carla Hornecker

    I think that although what Bob was doing was very clever, it was undeniably unethical for him to be taking credit and profiting from someone else’s work and effort. In particular, the amount of money he was making for not working is sickening. In addition to deceiving the company he was working for, he was taking advantage of the Chinese firm doing the work, as they were willing to do the work for far less than his six figure salary.

    The benefits of outsourcing are significant. Workers in other countries are willing to perform the same work tasks for far less money than would be expected in Canada or the United States. This means that there is great potential for a high level of profit. Other countries may have greater access to the technology required, or other resources including human capital, which would make completing jobs easier and cheaper there.

    However, by outsourcing a company loses the loyalty of employees who may have worked for the company for many years. Employees in other countries who take these jobs may have less attachment to the company or its values. Standards of performance may be lower in the country the jobs are outsourced to, and the results could be lower quality products or outcomes. In a more general sense, outsourcing jobs creates higher levels of unemployment which has a negative impact on the economy. Outsourcing may appear to be a very profitable and worthwhile endeavor in the short term for companies, but I don’t think that it is a good long-term solution for companies or the economy.

    Reply
  18. Megan Jackson

    1.Yes there is an ethical dilemma here. One reason would be that he’s making 250,000 a year and only paying out 50,000 to someone who is doing all his work. He is making money and not doing any work for it. But, I think Bob was very clever to outsource his work to China. He didn’t have to do any work and yet still got paid a large sum of money. If he hadn’t have got caught and the company he worked for didn’t have such a high security measure, Bob may have gone on to outsource his job for the rest of his life.

    2.The company that Bob worked at did see the benefits of outsourcing. The software that the Chinese firm developed was seen as the best in the entire building that Bob worked at. This showed that even though what Bob did was ethically wrong, the company did benefit from it.

    3.Some pitfalls that I see by a company outsourcing their work to other countries is that the firms or places they outsource their work to may be working for many other companies. So it is possible that the software the Chinese firm had developed for Bob may have been developed for other companies as well. More so, for Bob’s company, they were claiming the software that Bob made was from their company when in actuality it was from China. Outsourcing may violate laws.

    Reply
  19. TJ Winn

    I first caught wind of this story a few weeks ago via Facebook and had a quick look at it then. The first word I thought of to describe the situation was ‘genius’; although I did also conclude that this act was quite unethical and downright deceptive. However, I began thinking about it more and more, and even spoke about it with my wife. As I thought I began to justify Bob’s actions as what he has done is not any different than what almost every other large company is doing. He in fact, in my opinion, has committed the lesser crime as he did it on a relatively small scale and still, surely, completed portions of his job.

    Think about it, many (or I would even venture to say most) large scale companies outsource production and work to other countries every day. Why do they do this? For the same incentive Bob had… free money. They know they can make an easy buck simply by getting someone else to do the job for cheaper. The conclusion to this outsource is lost jobs. Furthermore, when a company outsources a product and has it made cheaper do they usually pass these savings on to the consumer? Not likely. So they may be committing a more extreme crime as they remove jobs from Canadians while continuing to charge us for these jobs.

    In my opinion, it seems as though media has, again, produced a scapegoat from this story in order to continue hiding the mass amount of unethical actions committed by corporations and businesses in our country every single day. Perhaps the company was right; bob simply was the smartest, best software engineer they had in their company. The downfall is this will most likely cost him, and others like him their jobs, as it is proven others can do the work just as efficiently for cheaper elsewhere; and who then will benefit from this?? Not Bob, but somebody will and then it will, apparently, no longer be unethical.

    Reply
  20. Leisha Hansen

    There is no ethical dilemma in this case because it is ethically wrong. Bob was the employee hired to do the work that he secretly outsourced it to China. It would not be as clear of an issue if he was an independent contractor that the company hired for the work, but, since he was an employee of the company, he committed to put his time and energy to work for them, not for videos and surfing the internet.

    Outsourcing has the benefit of being cheaper. It also frees up employees for more pressing, immediate work in the case of being overloaded. It is also allows a company that is low on cash build up equity faster by having cheap labor rather than expensive local labor.

    The pitfalls of outsourcing are that the company has less control over the end results. It is difficult to ensure the work is being done correctly from start to finish and they may be paying for unacceptable work. Those hired to do outsourcing may not have commitment to the good of the company and security could be an issue. There is also the issue of local employees feeling their jobs are being taken from them which could result in lower employee loyalty. If it is pursued there needs to be plenty of research with policies and guidelines in place and agreed upon by all parties involved to ensure information is secure and outsourced employees are in agreement with the standards of the company.

    Reply
  21. Akina Morimoto

    I highly believe that what Bob was doing was unethical. He was using someone else’s ideas, instead of coming up with his own. Furthermore, he was paying them to do his job for him. He was claiming work as his own when it was not his at all. It also seems a bit ridiculous, because management had no idea that he was doing this, and Bob spent all of his time at work doing nothing. He was also on social media or surfing the Internet the entire period of his shift, and was getting paid to do so.

    Outsourcing is indeed a benefit to a company, as it can easily increase profits nowadays as technology has become so important. This results in more efficient and quality production. Because of this, it can also increase competition among the industry. It is also significantly cheaper.

    The pitfalls in outsourcing can be that it may reduce profit in one’s economy as it gets distributed to another country. The other is the reliance on technology. If there is malfunction with technology, then it can affect the entire company. There could also be privacy and security issues. As well, management may not know all of their employees and thus, it can create some issues with trust.

    Reply
  22. Josh Bodnaruk

    Of course there was an ethical dilemma at bob’s workplace. Bob was taking the work of another person as his own, and profiting from it. While I admire his business model, it must be said that earning a six figure salary for web surfing is a gross misallocation of pay. If Bob truly was the best software designer, he would be putting the work in to do so. Also, there is a certain intrinsic value missing due to Bob’s transgressions. Without Bob working hard in the office every day, the synergistic benefits within any possible team performance is gone. Furthermore, Bob would also not be innovative by nature, thereby potentially missing out on better, faster programming.
    The biggest reason outsourcing is so popular in today’s business, is cost. When it is possible to manufacture, any product cheaper across the ocean and the difference is cheaper than the shipping, it makes sense as a business to send those jobs there. Especially since the output of a software designer is a software program, the cost of doing business overseas in minimal (yay internet), it would make a lot of sense to outsource these type of positions. The biggest risk of outsourcing in my opinion is the volatility of the host country. If the manufacturer is operating in a country with restrictive securities on web traffic and overseas trade, one could see it not being a wise decision to outsource there.

    Reply
  23. Alexi Kubeczek

    1. Is there an ethical dilemma in what Bob was doing at his place of work? Why or Why Not??
    There is most-certainly an ethical dilemma with what he was doing. He was profiting from the work of another person. It’s similar to plagiarism. That’s why there’s a certain format that we have to follow when using sources that are not from our own fabrication. Quotation marks have become our best friends because they allow us to use BITS and PIECES of work or evidence fabricated by others in our own works. He made false statements about what he was doing for the company and somehow, the work appeared in his hands, ready to be sent to his superiors. The problem is not WHAT he did, but, HOW he did it. It’s like when a company illustrates that their products are 100% Canadian, yet, it was built from the ground up in a factory in Taiwan. Had he been upfront and told them that he found another company who would complete the work, yes, they would have likely terminated his employment but, maybe they would have given him compensation of some kind. Maybe they would have given him an alternative position to seek out more services and keep their overall costs down. Whatever the case may be, it was not his work. In the end, I would have fired him and took on the services from this company in Asia who was completing all the work all along.
    2. What benefits can you see with outsourcing as a company?
    The most obvious benefit is the cost-efficiency. If you can find a way to cut any costs down – especially your fixed costs, why not do it? Providing the quality of the work is equal, if not better ofcourse. The next most beneficial reason to outsource would be an open-ness to more possibilities. Though one CEO or group of management individuals within a large corporation might see things one way, a native of the area of interest who’s been hired by the corporation might have better ideas as to how to go about running the operations. Especially seeing as PR has become such a large part of the business world, the least amount of conflicts mean for a more profitable long-term relationship from everyone from the workers in the project to the consumers.
    3. What pitfalls can you see a company risking by outsourcing?
    The pitfalls one can foresee are the possibilities of lesser-quality workmanship. Furthermore, deadlines might be missed by way of network failures, shipment failures, insufficient equipment or information, there are all kinds of possibilities. When a contracting company outsources, they usually looks for a company or individual who is reputable and has been given praises for their/his work. However, when there is tension being stirred between the contracting company and the homeowner, the first option to blame is the outsourced labour. Whether it is their fault or not is not solely based on one side. The contracting company needs to remember that they intrusted the body that they outsourced and that is now their liability too. The outsourced agent needs to remember that they agreed to have a task completed by a certain time, in a certain way. The blame rests on both of their shoulders.

    Reply
  24. James Perry

    I without a doubt believe that their was an ethical dilemma with what Bob was doing by outsourcing his work to China. For starters it was unethical to pass off someone elses work as his own while taking the credit. It wasnt up to Bob to make the decision to outsource the companies work. Although their are many benifits of outsourcing a companies work, there is also a right and a wrong way to go about it. Outsourcing in many ways can be cheaper, other countries are willing to do the work for alot less money than some of those in North America. By Bob choosing to outsource his own work to China proposed many threats to the company. Viruses, and the protection of the companies internal affairs would be at risk without being prepared for such a move. Bob put the company at risk. Some pitfalls from outsourcing could be that you are taking work away from those that live in North America and sourcing it out to other countries to save money. It seems like the obvious thing to do to save money but then again it is hurting our economy by doing so. I believe that there are deffinately a right way and a wrong way to go about outsourcing and it needs to be a company decision and proper preparations need to be set forth.

    Reply
  25. Matt G

    What Bob was doing was highly unethical; he was taking credit for something that he wasn’t actually doing without notifying his clients. Employers expect that the companies and people they higher treat them with some level of respect and therefore that they are up front and honest with them in their dealings with each other.
    Outsourcing is a very valuable tool for many companies in todays economy. Bob’s story proves this, he was able to increase his profit five times through using outsourcing. It is also becoming easier to access outsourcing and connect with people across seas because of significant increases in the technology required. Although outsourcing is more available and will be increasingly more available in the future, its popularity will bring with it more issues. While adopting new business practices, companies must ensure that they are always using ethical business practices.
    Some potential pitfalls that could occur from outsourcing could be the security of your company and its clients. You can only be sure how secure your own company is and not those of others half way around the world. You may have an issue of employee loyalty, the company that you outsource to is not invested in your company success and therefore may not keep up the quality of product you promise your customers. Its important that although you are definitely getting increased quantity you are also getting the quality that is needed in order to keep your clients happy and feeling secure.

    Reply
  26. Jordan Gibson

    1. Is there an ethical dilemma in what Bob was doing at his place of work? Why or Why Not??
    -Absolutely. Bob is portraying himself to be an outstanding citizen and a hardworking, trustworthy employee for his company which is simply not the case. When you, yourself know what you are doing is wrong and you do nothing to change this code of conduct then there is definitely a problem. He was also paying off other people who did not even work within the company to do his work. Clearly unethical in any way you choose to look at it.

    2. What benefits can you see with outsourcing as a company?
    -Benefits would be that more people are able to become familiar with the tools and the products that your company is trying to push along the marketplace. With more outsourcing occurring more jobs can be created and more and more people can begin to telecommunicate from their homes. This can make the whole process much more efficient for everyone involved and companies can begin to grow at a steady rate and at the same time limit costs to hire these new employees.

    3. What pitfalls can you see a company risking by outsourcing?
    -Immediate risks that I see are the same that can be applied with the usage of Social Media. Suddenly when you begin to outsource the same thing occurs, with information beginning to float out to other companies that you may or may not want out there. How do you know you can even trust everyone that you outsource to? You don’t, so you are always basing everything on a hunch or goodwill that people will not double cross you. If it so happened that through this process, precious information leaked out into the hands of another company competing against yours, it could make you vulnerable very quickly. Suddenly you would become victim to attacks and you would quickly find yourself in the hole, looking for a way out.

    Reply
  27. prashant malik

    Yes , I think that there is major dilemma in what Bob was doing at his work place. It was totally unethical on his part because not only he was taking credit on someone’s else work , but he had put the company’s privacy and security at risk by allowing the Chinese people to have access to his personal information. He was getting $250000 per annum for nothing , as he used to fool around on the internet checking out his Facebook account , neglecting his job responsibilities. It was his own fault that he got himself fired.

    If the company or the employer would have outsourced , then that would have been a different scenario as outsourcing has a lot of advantages. First of all , if the work is outsourced to vendors who specialize in that field , then the tasks can be completed faster and with better quality output. Also , Outsourcing evades the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. Most businesses have limited resources, and every manager has limited time and attention. As a result outsourcing can help the company stay focused on its core business activities and not get distracted by complex IT decision , as most of the external work is taken care by the specialised vendors. Also , outsourcing helps to reduce the business risks.

    As for the pitfalls , there is definitely a risk of exposing confidential data to the third party. Also when a company signs a contract to have another company perform the function of an entire department or single task, it is actually turning the management and control of that function over to another company. If the outsourced vendor isn’t very effective , then the company will have to suffer a lot as there goodwill can be tarnished.

    I think that outsourcing has equal amount of advantages and disadvantages. It depends on the company whether they want to handle the work on their own or take the help from outside.

    Reply
  28. Oyinkan Bakinson

    Yes, there was an ethical dilemma. Bob was taking credit for someone else’s work. He is paid a salary every month to do a job and this constitutes a contract to do that job himself. The salary he is paid is not for him dilly-dally all day but to do actual work.
    Outsourcing can cause lower costs, because the amount of money spent locally can be higher than the amount you would have paid if it had been sent outside. The company was paying $250,000 to Bob while he paid $50,000 for someone else to do the same job. This is a clear example of reduced costs. It can also allow companies to spend time on their areas of expertise. Through outsourcing you can service your customers faster and provide better quality service. Outsourcing could possible reduce the amount of work that needs to be done.
    Companies face risks with outsourcing because they are giving outsiders insight into their organization. Companies may also not choose the correct people to take on the outsourcing jobs. There is also the issue of if unethical means are used by the company that is being outsourced to; this could damage the reputation of the organisation. Choosing the wrong activities to outsource may also be another problem encountered by use of outsourcing. It is always possible to lose control over the activity that is outsourced. A risk may also be failure to develop an exit strategy (for either moving to another vendor, or deciding to bring the activity back in-house)

    Reply
  29. shaunagregus

    There is definitely an ethical issue regarding Bob’s actions. Outsourcing is obviously a common place activity in the business world, but the fact that he did it behind his employers back and took credit for someone else’s work is wrong. Not only did he earn the rewards and benefits of a job well done (huge annual income), he spent his time surfing the web and killing time. Had he been working with the company in China to whom he was outsourcing, perhaps the dilemma would not be as trivial. But since he seemed to have nothing to do with it other than supplying codes and information, he’s getting paid to do basically nothing. Yes, in his defense, it was a smart move to find someone who could do your job for you, for cheaper, and free up your time. However, is it fair that Bob now becomes wealthy by playing games and watching videos while his co workers work their tails off to finish their work? If Bob had brought it up to his company that this was a viable option, then they could make a collective decision about whether or not to use it. The fact remains that Bob lied and found a way to get around his job description: this is what makes it an ethical dilemma.

    Reply
  30. Helen Reina

    In my opinion there is an ethical dilemma in this, because he was hire to work for the company and when you accept to work in a company is because you are going do the activities you are supposed to do in your work time and that is why your bosses pay you. When he decided to contact the person in China to do his job, he was abusing of their bosses trust because he pretend to be working all day and also showing them that he was “apparently” doing his best and presenting results for the tasks.
    When bob was sitting doing not important things for the company, the man in China was working an bob was not fair with the amount he was paying to him, because he was receiving a lot for doing nothing and the person in China that was really doing his job get just a little part of the payment.
    Besides this case, outsourcing has a lot of benefits for companies because it allows to reduce costs. For example if you have a bank you can outsource your security, by doing this you will be saving money in arms and equipments that are included in the price you pay for the company that will provide you with the service.
    In my opinion the most important pitfall the company will have is the risk of showing important and also private information to different companies or also employees, because they are in touch everyday of the things the company does.

    Reply
  31. Cody Nielsen

    I am a little torn about how I feel regarding this case. There is no questions what he did wasn’t ethical, merely because he was keeping it secret from the company knowing they would have a problem with it. But the fact that he is getting credit for something without doing anything doesn’t bother me as much. Business consultants don’t get the credit for how well a business does even if every idea and management tool could have been his idea. The business gets the money and credit for being managed properly, but without the consultant they may not have gotten there. Or take the example we learned in class about UPS and Amazon. Most people think when ordering from Amazon that they deal with the delivery and packing and so on. But UPS does all the work, and Amazon gets the credit for “delivering your product.” What Bob did was genius, and it benefited more than just him by providing a job to someone else. But the trust issue is where it went sour. I would have fired him in a second knowing he was potentially opening a segway for outsiders to take a sneak peek at the company and use that information against us. I like a guy who can make me or the company money, but not if I can’t trust him!

    Reply
  32. Lindsey

    1. Is there an ethical dilemma in what Bob was doing at his place of work? Why or Why Not??
    Yes, absolutely. The employee was falsely representing another’s work as their own, which is wrong at a fundamental level. Additionally, the person who the work was outsourced to wasn’t being compensated a competitive wage for the work that they were doing. While the cost and quality of living may be different abroad, the lack of compensation also meant the lack of confirmation of work well done. As we learned in “The World is Flat” documentary, this is becoming increasingly common at the company level: outsourcing manufacturing, call centres, etc. But those decisions are made legally, with contracts in place and punishments if the work fails to be completed or if information is mishandled. None of those were in place in this situation. While some may say the employee displayed initiative at the creativeness of outsourcing his job for better quality work, he did not have the right or the authority to make that decision.

    Reply
  33. Andrew Garlock

    Clearly what he was doing was against company policy, and was certainly dishonest. Like other people have mentioned, he was hired to write code on the merit that he was capable of writing good code as well as being able to maintain company security. By outsourcing his work, he was breaching the company’s security, and therefore was potentially harming the business that had hired him. I liken this behavior of allowing another company in China access to the business to an employee of a construction company staying home and sending in a migrant worker to do the job. When the foreman sees that the employee that he hired has been replaced by someone that he does not know, who has not been screened to give him confidence that he won’t be walking away with stolen tools at the end of the day, and very well might be wanted by the police, the foreman is surely going to be upset. It does not matter that the migrant worker is faster and does a cleaner job of pounding nails, he still can’t be trusted until he has gone through a proper hiring process. At that point, the new employee might be a good candidate to hire, but the actions of the original employee are not acceptable. It’s worse that it went on for so long. There was likely a great sense of betrayal and concern, as executives are wondering what information was available to these programmers overseas, and how much of it was recorded and filed away. This information could have been acquired their competitors, and potentially could have crippled the company if there was information on new products pr marketing that the company needed to keep under wraps. All in all, this was likely a huge expense to the company to clean everything up. Maybe outsourcing the code is a viable option for this company, but they need to ensure the security is in place first, and strangers are not going to be let in to wander around their information systems without anyone knowing.

    Reply
  34. Edward Agyapong

    1. Is there an ethical dilemma in what Bob was doing at his place of work? Why or Why Not??
    Yes, there is. This is because he was being paid a huge sum to do something the company though and knew him to be good at. The company believed in his developing skills in the software industry. Even though outsourcing also improved the level of work he submitted every day, it was very unethical of him to cheat the firm by almost $150,000 every yeah. If the company wanted to outsource or wanted another employee they woud have hired someone else to join or do that work.

    2. What benefits can you see with outsourcing as a company?
    Well to outsource is more like seeking further or other opinion on any piece or puzzel or job from others. There are some minor downsides to that but in a larger context there benefits out weighs the disadvantages. Now the benefits of this particular firm enjoyed from Bobs actions of outsourcing was that the level of work anticipated by Management from Bob kept on increasing in Level of excellence. Because it was a group of people working on the project daily, different ideas were always put together to form the perfect job.

    3. What pitfalls can you see a company risking by outsourcing?
    There are quite a few pitfalls, one of them is that the company risked a shoddy work being done. Also the company risked loosing their private information to other firms if there are bad nuts or staff like Bob in the company that the job is outsourced to.

    Reply
  35. Oyinkan Bakinson

    Yes, there was an ethical dilemma. Bob was taking credit for someone else’s work. His payment every month to do a job constitutes in a contract to do that jobs himself.
    Outsourcing can cause lower costs, because the amount of money spent locally can be higher than the amount you would have paid if it had been sent outside. It can also allow companies to spend time on their areas of expertise. Through outsourcing you can service your customers faster and provide better quality service.
    Companies face risks with outsourcing because they are giving outsiders insight into their organization thereby creating risks. Companies may also not choose the correct people to take on the outsourcing jobs. there is also the issue of if unethical means are used by the company that is being outsourced to, this could damage the reputation of the organisation.

    Reply
  36. Janelle M

    Bob’s decision to outsource was a possible indicator of the trends coming up in the future. With the organization moving towards easier access to work from home, they set up a system which provided opportunity to create a global workforce. Though Bob unethically breached the company policy, he gave the organization insight into what is possible. As his employee evaluation proved, the quality of work from the outsourced workforce in China was above the local caliber. Bob’s action helped him in the short term, but the reality is he set his job and the jobs of his coworkers in jeopardy. He proved there is a strong work force outside of the local talent that works better for lower wage. The organization could certainly benefit from this insight by making long term changes to implement this under-utilized strategy. By outsourcing their workforce they could potentially expand the company and branch out into a larger market. The disadvantages to this come back to the accountability of the employees. If it is this simple for a local employee to outsource their workload, this same behaviour could occur from an employee across the globe. By outsourcing work, it becomes incredibly difficult for any organization to ensure the work is done by the person it was delegated to. It could also become a potential threat to the security of the organization, as accountability could be lessened if employees work from such great distances. However, I believe these obstacles will be overcome as we see more of a trend towards a global workforce.

    Reply
  37. Sean

    Yes, there is a major ethical dilemma in what Bob was doing at his work. Getting credited for someone else’s work is majorly unethical. When entering the workforce, you tend to sign a contract, which binds you to the organization and demands personal, authentic work to be done by specific deadlines. The work was authentic, but not to Bob the employee, therefore resulting in this extremely unethical issue.
    A company choosing to outsource wishes to find a comparable quality product that they would purchase locally or build in house, at a cheaper price. Outsourcing helps a company increase inventories for cheaper than they would be able to locally. This in turn enables the company to be more profitable in the long run as well as focus their in house assets for other business.
    Some pitfalls a company outsourcing might face can range from communication issues, missing time deadlines and receiving below standard quality products. Therefore, outsourcing can be risky for some companies as they give the control of their inventory and products to the company who is making them.

    Reply
  38. mark schmitz

    The ethical dilemma is this. If you are an employee you are bound by company policy. He violated that policy, making his dismissal warranted. Had he been a contractor, this would have been totally okay unless a clause permitted him otherwise. Coupled with this and passing someone else’s work off as your own is both unethical and, if it were another American, illegal. In Canada and the United States, if you want to use other people’s information, you need to site who those people are and where you got your information.
    As a company, outsourcing enables you to get things done efficiently and on budget. If you don’t have the infrastructure to develop some type of component of your product or service, outsourcing is the answer. Other companies focus attention on areas that can help your business. If they do it better than you and can do it for much less cash, use them. “If you can’t beat’em, join’em”.
    By outsourcing, you are giving control to the other company whose product or service you are using. Unless there is a broad range of supplier s to choose from you are put the ball in the hands of your supplier. You focus on CRM but at the same time leave the stability of those relationships in the hands of another company.

    Reply
  39. Kathie

    There are many benefits that a company could receive from outsourcing, one being cost reduction. In this specific case, the company could have cut their costs by $200,000 on Bob’s work alone had it outsourced the work to a country like China. Some will argue that the quality of work may not be as high when outsourcing, but if a company finds the right people to outsource to, they can cut their costs without having to take a hit on the quality of work done. For example, Bob was apparently his company’s best software developer, but this work was done by the people that he outsourced his work to.

    A pitfall of outsourcing is that if security is not tight enough, it could leave a company vulnerable to foreign hackers. If a company keeps many records for it’s customers, the customer’s information is then vulnerable as well. As soon as their personal information is obtained, it could be used for unauthorized purposes. Another downside to outsourcing could be the reduction of job opportunities for individuals living in countries where work is being outsourced from. These countries would definitely see a rise in unemployment.

    I feel that what Bob did was very unethical. Not only was he lying about the work he was doing (and getting praised for it as the company’s “best software developer”), he put the company’s privacy and security at risk by allowing subcontractors to have access to his personal information. He was also getting paid $250,000/year to do nothing but fool around on the internet and neglect his job’s duties.

    Reply
  40. Justeen Kolody

    What “Bob” was doing was entirely wrong, although a very good idea. The fact is that he had sent the pins that were only meant for him to his outsourced contact, leaving him in violation of his companies acceptable use policy. Now that the company’s information that Bob had access too is in the hands of his outsourcer there is no guarantee that they don’t sell or misuse that information to someone else. The company now has to do some major damage control, they had said that it’s a large firm but is left unnamed so I’m sure that if someone else gets into there system they may not be hired as a subcontractor.
    As for the benefits to the outsourcing the company may want to consider it, as they were paying Bob $250,000/ year they can cut those costs by a third by doing just what he did. But with a specific contract put in place and there own training and being issued their own security information. As they were saying he was doing a good job but it was the outsourcer from China that was doing the better work the company could almost use that to their advantage.

    Reply
  41. Jordan Slemp

    This is unethical of Bob. He was hired to do a job with honesty and integrity. He broke the trust of his employer and his entire company. Terminating him was the right decision.
    But if you look at it another way. This was very very smart. Bob used all the available advantages he could to perform his job at the highest level. Even though it wasn’t technically his work, the work provided to the company was said to be of very high quality. Bob was providing his employer with exactly what they wanted. He may have been doing it in an unethical way, but he did get the results.
    This is a great example of the power of outsourcing. The work was done at an extremely high quality, for (I’m assuming) a very low price, by someone across the world. It’s very remarkable and gives reasons for similar companies to start looking outside of their own boarders for workers.

    Reply
  42. Haley

    There are obvious benefits of outsourcing to companies when it is done properly. You can acquire more raw materials, more labor more efficiently and cost friendly. In Bob’s point of view he never had to do any work while he was at work and he still made a handsome salary. However, Bob’s outsourcing of his entire job was highly unethical not only for the Chinese subcontractor who was doing all his work for him for way less than half the pay he should have been receiving, but it was also against his companies policies. He went behind his companies back and was unprofessional and dishonest. There could also be huge pitfalls for a company choosing to outsource. If they are outsourcing to foreign countries for computer software programming there may or may not be security issues, are the over seas employees going to try and hack the company unknown to the company, or maybe the workers overseas will feel less important, or know they are making less money then there American counterparts and it will cause them to not care as much, as not do the best work they could be capable of doing. Hopefully Bob’s company can re cooperate from this and not have too many problems, especially with computers!

    Reply
    1. Nicole Freeman

      This of course was completely unethical. “Bob” was being paid to do a job and he was not doing it. Had Bob’s job been to reduce costs without compromising quality, he would have been promoted to CEO! Unfortunately, I believe the message this article sends is that there are just as many capable and maybe even better workers to be hired in other countries that will do the job at a fraction of the cost. Why wouldn’t companies embrace the idea? The cost benefits alone are a compelling argument. I think the downside to outsourcing is of course the fact that local jobs are lost hurting our economy and for some, their way of life. Think of the Caterpillar jobs that were outsourced from Ottawa to the U.S. Those workers were pulling in $30/hr, there is no local job comparable to replace it. Outsourcing can leave a foul taste in a consumer’s mouth if they know about it. Consumer ‘s may feel the company is disloyal. Ultimately,(and I hate to say it) consumers will generally turn a blind eye if the price is right.

      Reply
  43. Jessi Chrapko

    I believe it was highly unethical for Bob to outsource his job to someone in China. It was not up to him to make that decision. If the company he worked for wanted to outsource its work, they would have made that choice. To take credit for someone else’s work is extremely unethical and is often punished severely. (Ex: policies on cheating and plagiarism in universities, laws regarding copyrights, patents, etc) It also exposed Bob’s company to high security threats. Their whole company could have been jeopardized if the person doing Bob’s work had used his security information in a spiteful way or to create competition by creating another company.

    Outsourcing is beneficial way for a company to save money in employment costs while still getting quality work. It could also help a company expand and appeal to a more global market.

    Pitfalls of outsourcing would be that employees don’t feel as loyal to a company they are working for which could lead to poor quality of work or products in some circumstances. Cultural differences could make it difficult for a company to appeal to workers of some countries and animosity can come from homeland employees.

    Reply
  44. Ida Draper

    I think it is highly unethical that Bob had outsourced his job to China. It is not the pay rate that bothered me; I understand that exchange rates and cost of living could mean that the $50,000 pay was more than enough. What bothered me is that not only did he break the companies trust by leaking his personal security information that should not be shared with anyone but he also was taking credit for another person’s work when it was in all ways as good as or better than what he could do.

    This case also proves that it could be an asset to the company to outsource many more jobs to China. There would be a lower labour cost for the company. Along with the high quality of work that would get done. It would make the company more efficient and in turn have a higher rate of return for the shareholders.

    As for pitfalls, there is the security risk associated with having a computer company that is spread that far around the world. I am also not sure if China has the same computer security standards as the United States. There is also the local government that you would either have to adapt to or change some aspects of the business operations. The company could also risk its image by taking a preference in recruiting. overseas workers instead of perfectly competent local labour. Companies are being pressured by social responsibility to worry more and more about the local conditions as well as trying to maintain their bottom line.

    Reply
  45. Lanre Paulissen

    I believe there’s an ethical dilemma, Bob was actually getting credit for work he was not doing. Besides that, shipping his VPN tokens to a third-party could constitute a huge security breach for the company if the token fell in the wrong hands or if his Chinese ‘subcontractor’ decides to become malicious.

    Outsourcing is beneficial to companies as more work gets done and most times at lower costs. I remember working for a company, after the day is over we transfer our undone jobs to the East and send a note of our progress and we go to bed. By the next morning, the work has gone farther and sent back to us with another note of progress and this team in the East is also in bed. This way work gets done 24 hours a day, 5 days a week and the progress is phenomenal.

    Some argue about the issue of pay but when companies act ethically in addressing this; this should be a non-issue. Companies are in the business of maximizing profit, but the management should ensure that the employees, no matter which side of the divide they are located, are paid a fair wage based on living standards.

    Reply
  46. Tayler Orban

    I believe that this is an ethical issue because Bob was lying and going behind his employer’s back. It is very unprofessional and it is his duty to act in an honest way. He should be doing his own work and submitting the work that he has completed not someone else’s work. Employees are hired by a company to do specific tasks and if they wanted someone else to do them then they would have hired someone else or outsourced the work themselves. Outsourcing is beneficial to companies because more work can be done at a cheaper price. Employees are the most valuable assets of a business but they also cost the most. If a business needs to cutback on their expenses then outsourcing is a good option because they can send the work to a country and it will be completed for a much cheaper price than if employees were to do the same work. Even though outsourcing seems to be a positive thing it can have negative consequences as well. Outsourcing takes away jobs in the home country and there is a decrease in employee loyalty because the people doing the work have no idea who they are doing the work for. There can also be cultural differences as well as the ethical dilemma of paying people a smaller amount to do the same work just because they are from a different country. Overall, outsourcing has the same amount of positives and negatives and it is up to each individual company to determine whether or not it will work for them.

    Reply
    1. Adam Christensen

      Firstly, I would say it is an ethical issue because Bob technically is an employee for the company and you can’t contract out the work you’ve agreed to do. It is a usual thing for a contractor to subcontract out work to other firms or people but for an employee to do it probably isn’t right especially since he is allowing another firm to breach his firm’s information in doing so.
      There would be many benefits for a company to outsource there work to others. The obvious first benefit would be cost, it clearly would’ve been way cheaper to just outsource the job to the Chinese firm which would have resulted in $200,000 less every year not to mention the costs that they would save on additional benefits given to Bob. Also, if a company was to outsource major parts of the business, it would be less costs to operate, i.e., building costs.
      I could see this as becoming an issue because with outsourcing growing more and more popular in the world, wages are generally a lot less in other parts of the world and would seem to drive them down here in North America as well. The problem with this, is that the cost of living isn’t getting any cheaper which would add to the poverty problems that people already face. Also, you then run into privacy and trust issues because as a contractor you would be more worried about your firm then the firm you are working for which could lead to giving out vital information or just doing a poor job. You would lose control in that aspect.

      Reply

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