How a ‘model’ employee outsourced 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

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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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23 thoughts on “How a ‘model’ employee outsourced his software job to China

  1. David Fox

    Bobs actions in the work place, where dubious at best. As bob was hired under the pretense that he would be doing the work, not outsourcing it to a different company. As his terms of employment where that he would complete the work himself, not give it to someone else. (Assuming such, but actually contract examination would be needed to confirm) Additionally he was using the companies resources while pretending to do work, which is an outright act of misrepresentation. By giving the work to someone else and claiming, or not clarifying that he was not its author, is bordering on the grounds of plagiarism. As this is the case, the company could have been liable for any copyright infringements that are a direct result of the employee’s outsourcing.
    The company was also at risk from bob’s actions, as he was leaking secure credentials which could have been used to gain access to other company project or information. From what I understand, outsourcing work requires clear contracts, observations and directed supervision to ensure that both companies are protected and are keeping on track for the planned developments.
    If bob proposed to an upper management team that the tasks he was doing could be outsourced effectively, and then received permission to manage a team. The company then could make allowances to include the team without breaching security, and allow better coordination. He might have been able to benefited the company substantially more. (as he wasn’t very busy with what he was doing) managing / coordinating several more teams while remaining within the companies policies.

    Reply
  2. Cameron Pituley

    I would say there was an ethical issue in what Bob was doing at his place of work only because it violated internal company policy and was not something his superiors condoned or implemented throughout the company. It was pretty clever to pay someone else a fraction of your income to do all your work for you and from a purely economical stand point I would think it was a great idea. Since he was able to do contracting work on the side and further supplement his income without doing any work I would say Bob’s idea of outsourcing was ingenious. Unfortunately his ingenuity came back to bite him because it was not sanctioned in his place of work.
    As far as outsourcing as a company goes I would say the most obvious benefit is a financial one. You would save incredible amounts of money if you were to implement outsourcing in all branches of a software developing company. Bob was able to pay 1/5 of his salary to do absolutely no work during the week and still reap the benefits. If this was a common practice for the entire company they could increase their revenue by a very large sum.
    Unfortunately there are some pitfalls when outsourcing work. Potentially the data you are transferring could reach the wrong hands or you may not receive the highest quality of work all the time. It is important to ensure safety measures are being taken to ensure privacy and confidentiality and it is important to contract out the work to only the most reliable outsourcing firms.

    Reply
  3. Will Mammo

    With the amount of money Bob was getting paid to do his job, there lies a big ethical dilemma in his actions to outsource to China. The amount of credit and appraisal that was being given to Bob, without him even accomplishing the required task, and also the fact that all the company’s confidential information being revealed to an external market brings up an issue of being ethical. Now, although he is using outsourcing to his personal gains, one benefit that this has brought up is employment for the Chinese firm. Also, since the firm is doing a great job, the company is benefiting from the great performance. One main pitfall that arises from this outsourcing process is the lack of security. With all the access codes and confidential information being public, it is easier for the outside market to attack the company and use their information as an advantage.

    Reply
  4. Yaqian Diao

    Yes, there is an ethical dilemma in what Bob was doing at his place of work. It is because that Bob is paid for what he does at his table. Even though Bob can offer what his company lets him do, actually, the job is not finished by him own hands. The company needs the true talented people, not the contacts. What’s more, sometimes, the tasks are secrets which can’t be divulged to the others. Thus, Bob’s behaviour is unethical. Otherwise, if the job can be passed to the outsourcing, is it necessary to keep Bob’s position?
    On the other hand, there are still some benefits with outsourcing. With the development of economic globalization, a company may not finish everything. If they want to get a successful achievement, they have to join an alliance and work with some other companies. That’s why the outsourcing appears in the society. The first main benefit is that the company can spend less money and time on the projects with less risk. It can make a contribution to the strategic competitiveness. The company don’t need to hire too much employees, and pay much more salaries. They can be devoted to what they are good at.

    Reply
  5. Carlie Willimont

    Yes, there was an ethical dilemma with Bob outsourcing. Mostly the fact that he was being paid a significant amount of money to sit as his desk and surf social media sites as well as watch cat videos. When you work as a professional there is a sense of agreement that you will be actively doing the work and being loyal to the company. Another aspect is security, if his work was important and confidential enough to need security pins and usernames than I’m sure the company wouldn’t want a stranger from China having access to the information and actually doing the work. Benefits of outsourcing include efficiency and improved timeliness in most situations, having a company over seas can help to improve a company. However in this situation there are significantly more pitfalls than benefits of Bobs outsourcing. Bob risked the security and confidentiality of the organization he was working and got away with it for so long due to his unsuspicious manner. Outsourcing can cause companies to lose control over decisions and confidentiality.

    Reply
  6. Eric Choi

    Yes, what Bob was doing at his workplace was unetethical. First of all, working at the information systems branch, I’m sure he is working as a contractor, where private information could not be shared with anyone outside of the organization. Secondly, he is getting paid for his abilities to do the work that is needed, not outsource it to others and getting paid to sit on his butt and watch cat videos, read news from reddit and posting stuff on facebook, while retaining 75% of his income to pay for the Chinese progammer. By doing what Bob did, he not only jeapordized himself, but jeapordized the whole organization of risking of losing or stolen confidential information to a stranger. The benefits of outsourcing is to minimize operating costs and other costs such as health care for th employee. Another benefit is when there are many projects are needed to be completed, and when there are not enough man-power, outsourcing is a great technique to accomplish tasks that are needed to be completed as soon as possible. As there are benefits, there are risks as well. Risks such as transfer of knowledge These outsource sometimes deliberatly make the codes very complicated and the oursourced codes are difficult to be edited to ensure more jobs with the organization in the future. Secondly, these codes could potentially be sold to other companies or hackers, where it poses a risk to the organization in the future. Thirdly, if there were to have unhappy outsourcing employees, they themselves could intentionally take it out on the organization by hacking.

    Reply
  7. Jessica Holmes

    There is an ethical dilemma concerning what Bob did; this is because he was not actually completing the work he pasted his name on. Not only this, but Bob could have introduced someone with malicious intent into the companies system. Although Bobs actions were an ingenious way of getting someone else to complete his work, getting someone else to do your work is always unethical as you are lying about would actually completed it.

    Bobs actions here have opened his employer to an all new option, this being outsourcing. Outsourcing is inexpensive. This is due to the fact that outsourcing to a country such as China or India the average wages is much lower than in the western world. The work completed in these places is the same as the work completed in the central offices of the company. This is wonderful news for the company as for a fifth of the cost to have a worker within the company the tasks can be completed. Having this extra money the company can now pursue other possibilities. These possibilities could be very lucrative for the company be it better technology, more workers (which in turn creates more profit) or expanding the company. Outsourcing a position has the ability to of tapping into another counties talent pool which could be greater than the talent in the home country. This would enhance the company’s work exponentially. Outsourcing has the potential of giving a company which has no hope of expanding the potential of gaining more skilled workers within other countries.

    Reply
  8. Litchi Peng

    This is a very interesting case. In this case, Bob is a clever guy. However, he is not honest. From company perspective, they give some projects to Bob. As long as Bob finish all his work and reach the satisfactions of the manager, Bob can get his salary. Even it is the choice that How Bob choose the way to get his work done; he should obey the rules and requirements. In this case, Bob was paying a Chinese firm about $50000 a year, and he earned more than $250000 a year. He actually earned 20000 dollars a year which is very neat since he did not do anything. I think there is ethical dilemma in what was doing at his place of work. Some inner information may be known by that Chinese firm. It is very important to keep information secretly for a company. What Bob did is not right.

    There is no doubt that outsourcing has benefits for a company. Nowadays, this is a global marketing. The whole world shares information. Every country or company has their own advantages and disadvantages. There is another issues is time. Time is a definitely advantage for a company to produce more products in the same time period. If companies can work together and do each time, it shorten the time they finish which is a competitive a merit. In order to make the best profits, they can get what they need using outsourcing. For example, China is the biggest factory in the world because there is a large population. It is cheap to get labours and pay lower salaries than any other western countries.

    Reply
  9. Jill

    Since Bob was not completely honest with his employer I believe he violated what should have been his ethics. The company hired him to complete a job, they did not hire him to pay someone else to complete a job. If Bob wants to pay someone to do his work, he should set up himself as an outsourcing company. Then that the company he worked for would know what it is they are paying for.
    People create companies to make money. Unfortunately you cannot make money without spending money, and there are a number of parts of the business cycle that cost the company money that doe not directly generate income. I believe a company should outsource all costs that do not directly generate income for the company. For example at an Oil company, the accounting and IT departments decrease the bottom line. If the employees in these departments need to go on leave, and the size of the department has to be increased, the company earns less. By outsourcing the non-income generating parts of the business, a company could negotiate a yearly rate for accounting services or IT services and they know that amount will not change.
    The largest risk to outsourcing is ensuring the outsource provider treats their clients information with respect. If an outsourcing provider had the information of competing firms, they face an ethical dilemma if one of the companies wanted access to their competitor’s information. Another risk is if the outsourcing provider goes under, then the work may not be completed on time, creating a mess for the company because they may not have the manpower or tools required to complete the work.

    Reply
  10. Songxuan Wu

    It is an interesting case about employee outsource in China. China is a high productivity and low cost country; more and more outsourcing company prefers to choose China for processed their products. Bob was a smart businessman because he knows how to save his day work and get same salary as other employees. I think this is an ethical dilemma about Job’s outsourced instead of his regular work in his firm. However, Bob actually finished his work, and he should get his salary benefit. Totally, this is a controversial issue in this situation.
    In this case, Bob just complete his work on time, and it did not mention that his extra contributions for his firm. The benefits of outsourcing would include cheaper wages for the lower salary labor and company can achieve more productive in a fixed time. In modern world, China and India are two main outsourced countries. Most developed countries choose raw materials and processing in China and India. In recent years, the growing number of technology development in China. Bob choose this convenient way is very smart but his behavior is not appropriate to his firm.
    On the other hand, the outsourced also bring some problems to companies. Many foundational companies would face with strong competitiveness because they cannot content against cheaper labor, so many foundational companies have to reduce their cost for the price balance in local. And more, a lot of lower educated people would be hard to find jobs, and the unemployment rate is also increased.

    Reply
  11. regi

    Of course there was an ethical dilemma with Bob outsourcing his work to another company however; Bob obviously didn’t believe it was a dilemma. Bob was paid to do a job and entered into an understanding with his employer that he would do this job when he was hired. By not doing this he breached that understanding. He also allowed someone else, someone he knew very little about access to company records. He assumed he was hiring them to do his work, but with his password and security access this company could have access to any number of things and could have done many different malicious things to his company. He had no way of knowing what they were doing and a great deal of damage could have been done to his company and its information.
    There are some benefits to outsourcing such as having to hire fewer employees and to use a company that specializes in certain areas to do the work needed. This will reduce cost for a company and will make their products and services more competitive as a result of reduced overhead. There are also pitfalls like decreased company morale because staff lose jobs for someone in another country to do their job. Communication can also be an issue because you are communicating with someone usually far away from you and maybe that does not speak English. Companies have to decide what is best for them when deciding to outsource. However, employees like Bob should not be able to make that decision.

    Reply
  12. James Mahoney

    There is definitely an ethical dilemma that exists in regards to Bob outsourcing his job to china. But at the same time it did not mention Bob’s salary in the article, it only said that he was paying $50,000 to a Chinese firm. It would be important to know what Bob’s salary was as well. If he was making $500,000 annually and outsourcing for $50,000 then there would be a serious problem with this, but if his salary was only something like $75,000 a year then I don’t think there is as much of an ethical problem since it would cost Bob two thirds of his salary to outsource his job. There are many benefits when a company outsources jobs. In this case there was probably tremendous cost savings if an employee was outsourcing work oversees without the company initially knowing. Another benefit is that the talent pool for a specific job can be better in other countries. Outsourcing brings many challenges to the table and the only way to successfully implement outsourcing is to minimize the negatives. The loss of managerial control would be one of the greatest problems when trying to achieve success when using outsourcing. The greater the distance that you outsource in turn brings greater problems with communication to the company that you outsource to. Along with problems in regards to slower transfer of material and ideas, there are also great problems in regards to security of the system since the information must be released to work in cooperation.

    Reply
  13. Xinying Du

    . This is an interesting story. This article is mainly talk about a ‘model’ employee outsourced his software job to ChinaBob use outsourcing to finish his own work. He must feel free when he at work. The article said that Bob spent his workday checking sites such as Reddit, Ebay, Facebook and LinkedIn and watching cat videos. Then he would type an e-mail at the end of the day to update management about his “work” and left at 5 p.m. Although he spent 15% of salary to the outsourcing, he still gets his price without any energy. He must be a very smart people to use this method. But, his action is not appropriate.
    I think the reason that the outsourcing exists is that the company also meeting with telecommuting. So employees are not always meeting together. In other words, if people use outsourcing correctly, it brings you benefits, however, if you do outsourcing without noticing your own company, you will have to duel with more problems. I don’t know if there is a best option in solving this problem, it seems complex. From my knowledge, it’s extremely hard to prevent this from happening because the people who always in distant locations, are very intelligent and always seem to be one step ahead of law enforcement

    Reply
  14. Crystal S.

    Yes, there is an ethical dilemma, because he did not let his employer know what he was doing. He was hired to do a job, not turn around and hire someone else to do the job for him. In this case the company itself could have done the same thing and probably saved themselves some money. They could of outsourced the job instead of hiring Bob to do it. Obviously Bob found it easier to get someone else to do the job for him or maybe he did not know how to do the job at all. Bob was deceitful and untrustworthy and the company was right to fire him. The company would have saved $200,000 annually if they outsourced the job themselves. This is one major benefit they would have made and also possibly getting the best programmer for such a low cost. With outsourcing there are also risks which would include breach of confidentiality and putting the company’s information in jeopardy. How Bob could have gotten away with this for such a long amount of time makes you wonder why it took so long for the company to find out this was happening. Bob was disclosing company information to people from another country and how does the company know that Bob even knew this person who was doing his job. The company records only went back 6 months so they can not even be sure how long he was doing this or how long the company was at risk for exposure.

    Reply
  15. Liz Martin

    I think the unethical part of Bob’s role in this is not that he outsourced his work, but that he was lying to management on a daily basis and that his actions went against company policy. Had he arranged to outsource his work in a different way this may have turned out better for him. Perhaps he should’ve created a small company of his own, made the man in China his employee, and then proceeded to sell his program development services to the company.
    In this case, outsourcing could’ve helped the company eliminate any high-salary employees like Bob and allocate the work to someone like the Chinese man, who is willing to do it for a much lower price. These cost-savings that outsourcing offers are one of the major benefits. Other benefits could include things like increasing efficiency and cost-savings, for example, specialized tasks that are complicated and take a lot of resources and time can be outsourced. This will free up all the time that employee or managers would have been spent on that one task. Outsourcing can also provide stability during busy seasons, or when there is a sudden need for labor and it can’t be fulfilled locally.
    Some problems with outsourcing are that there could be a loss of management control. Essentially an organization that outsources most of it’s work is not one but many companies working together, and each company may have different priorities and goals. Outsourcing also poses a threat to security, especially in this case for program development, and it’s hard to ensure that the work will be kept confidential.

    Reply
  16. Kristina Madarasz

    Outsourcing has many positives such as cost reduction, the company can focus more on what they do best and rely on someone else to do the work no one else wants to do, HOWEVER. Because of the nature of the work that Bob’s company does, there are some major negative affects to outsourcing when dealing with confidential information. Someone the things that should be considered include: How secure is the software even? Could someone have bugged it? What security measures are in place? Is there testing available beforehand by someone not from the outsourcing company to see if the software is secure? How long will the outsourcing company keep the companies confidential information? Will the information be kept onsight or offsight? These are all questions that should be asked when outsourcing confidential information, otherwise, the company is taking a huge risk and opening themselves up to something they may never recover from if their information is compromised.

    Yes, i do believe what Bob did was unethical. He should never have outsourced without considering all of the risks involved as well, he should have never taken credit for what that was not his to take credit for. Some people might see his decision to outsource as smart because Bob was still able to make money from his decision, however, down the road, his decision could reasult in lawsuits with large financial implications for the company. You should always consult with all stakeholders in an organization to see how your decisions will affect all individual units as each unit may have different regulations that they have to abide by and you may be going over their heads by making decisions that directly affect them without asking them. Making well thought out decisios is key!

    Reply
  17. Ahmed Awad

    There is an ethical dilemma in what Bob was doing at his work place. Instead of doing the work himself he outsource it to other people while he on his Facebook page. This could be considered one of two ways. The first way is that Bob does not know how to do this particular task and therefore he outsources it to other people where they can do it faster and cheaper. This allows Bob to focus on other stuff (not Facebook tho). The Other side is Bob is lazy and he is outsourcing the work so he doesn’t have to do any. Outsourcing as I said before, allows you to focus on other aspects while the other part is outsourced. It is a great way to reduce operating costs and overhead For a company it could be considered time and money saver option, because if the company would hire someone to do work would be a lot more expensive then outsourcing it. A company might want to cut down it expenses. The pitfall of outsourcing could include communication problem; weather it linguistic or just communication with whoever doing the work. Secondly, quality issues; the product/output that is make offshore might not meet the standard of company. Another pitfall is how a company might be exposing it sourcing to the world. Whether it’s a software company or not revealing their product could put you at a disadvantage. Also outsourcing is considering lying people off from their jobs which has an impact on the economy.

    Reply
  18. Kai Zhao

    1This is a controversial issue. In this case, Bob was not doing his work on himself, but paid 1 fifth of his salary to a Chinese issue. From this company’s point of view, Bod did get his job done completely and successfully. Moreover, a firm is different from a company, firm is more like a place that get job done for companies. For example, if an account works for a company, this account actually make balance sheets or statements for his own company. In contrast, if this accountant works for a firm, his job is to make balance sheets and statements for other companies. Therefore, Bod did not commit a law crime for sure, but he did in an ethical dilemma.
    2By outsourcing, a company could gain benefits from several aspects. It can reduce the use of labor, decrease workload, and be more flexible for their working schedule. In addition, a certain sized company may be not able to contain enough technicians, so by distributing jobs on other firms, this problem can be solved.
    3. By outsourcing, one main pitfall is that the company would have less control about their job issues. If they keep getting works and jobs done by paying a firm to finish them, then what if this particular firm accidentally shut down, stop offering help, or all of a sudden, increase their charge dramatically. Thus, a company should be able to finish their main tasks by themselves, just in case, some day in the future they may lose their outsourcing places.

    Reply
  19. Calvin Chu

    First of all, I have to give this guy a thumbs up. It is everybody’s dream to not do anything but still have a good earning. It is hard to achieve that as it is rarely to see that happen. Most people who tried will end up with something bad. I do find there is an ethical dilemma in what this smart guy did. Never do what he should but to use the work from other people and hand in what their work are without any edit. Most funny thing is what if the organization do not know what he did for a long time. It is costly to realize if it is too late because secure and privacy issure are matters.
    Outsouring is a good thing to know, understand and use. If you use it correctly, it brings you profit but if you use it without knowing what you did. It is costly and cause many problems.
    Like what i said above, if you outsouring correctly it brings you benefits, however, if you do outsouring without noticing your own company, you will have to duel with more problems afterward. Therefore, in my opinion, when you/ the organization are doing outsouring, make sure people know what’s happened and make sure to duel with the secure and privacy problems.

    Reply
  20. Jingyi Wang

    This is really a funny story, and in this case, there is an an ethical dilemma in what Bob was doing at his place of work. Instead of doing the work by himself, he outsource the work to another people, but still get the salary, he is not an honest person to his company. While in the other side, we have to say, he is a smart guy, because he was earning money with no effort. But just as the company concerned, his behaviour will cause the company a security issue, someone may use his ID to get into the company’s website and steal the company’s information.

    Outsouring if you use it in the correct way, it will bring you a lot of benefits.For example, NIKE has outsourced their manufacturing work to other countries, such as China and Indian. NIKE only holds the design right, materials to use and price setting in their hands, with this they lower their cost and improve their work efficiency. There are many companies using outsourcing, they give out some of their work or all of their work to other companies, and try to cut cost and improve revenue.

    We can clearly find in this case that if the employees outsource thier work privatly without noticing their company, it will cause the conpany a security problem. Other companies can pretend to be a person doing the outsourcing work and get access to your company then steal your information. In addition, when the companies are doing outsourcing, they should also pay attention to this problem.

    Reply
  21. Tammie Tuccaro

    My thoughts are that this was unethical of Bob, as he was the one taking credit for the subcontracted company’s hard work. Very clever though, but still very unethical especially if the company he worked for did not know what was going on right under their roof. They then had to turn around and spend money on trying to figure out how they had contracted a malware virus.

    The benefits of outsourcing would include, cheaper wages especially considering that Bob was paying someone else to do his job for 20% of his salary. As mentioned in the article, the subcontracted company made Bob look like he was the best developer in the company, thus saying that outsourcing could possibly find individuals around the world who are more qualified in these types of positions.

    The pitfalls to outsourcing I think would be the non-existent face-to-face meetings. The article did mention that this particular company does support telecommuting and working from home, but this confirms exactly how that privilege can be abused by the wrong employees. Companies are more likely to get viruses, plus sharing of confidential company data, and security breaches. I also feel that there could definitely be some communication problems as internet and phone connections may not be as good as you would get in the office where you know that there is an IT department who is dedicated to making sure that those types of issues are dealt with.

    Reply
  22. Sean Annis

    Yes i do think it is an ethical dilemma in taking credit for someones work other than your own. Bob was pretty smart to out source his job and reap the benefits;however, this is unethical in that bob violated the companies obvious concern for privacy, and for taking credit for the work of others. Otherwise from an economical point of view, i would say it was smart of bob. He was able to still make money as a distributor of software.

    I think that is a company were to outsource their programming to a country such as china, it would be smart because with the internet, anyone can potentially “be your neighbor.” also in countries with an immense and growing population, they are able to provide their work at a lower price which leads to lower prices for consumers and higher profits for the business.

    The downside of outsourcing is that one must put out confidential files and trust their software in the hands of someone outside of their company. Also their could be a potential back door to the software that the developers could use to do harm to one’s company. I think that it would not be wize to contract out software to companies if the software was going to deal with confidential information. Otherwise, i believe contracting out software could be a huge benefit to companies looking to gain a competitive advantage.

    Reply
  23. Matthew Malm

    I can help but assume that Bob was signed in on a contract basis, which most software developers are, so there is indeed a large ethical dilemma. The contract likely specified that he would work to the best of his abilities so by allowing someone else to do his work, this criteria was not satisfied. In addition, programming standards between people differ greatly so the nomenclature used in the naming of variables would likely be different and this would cause extraordinary problems for scalability in the future.

    Outsourcing is a great way to reduce operating costs and overhead. Companies can operate without a headquarters and utilize the internet for communication between employees. Without these absorbent costs, companies can in turn offer the consumer lower cost alternatives for products thus expanding the average consumers technical abilities. Large corporations that use Agile Programming or Extreme Programming often outsource small components and tedious tasks to others at lower cost. Hence why a program like Microsoft Word is the nice price of 79.99$ rather then 1000s, as a consumer I like the idea of outsourcing but as someone who dabbles in the industry, it is a severe disadvantage for profit. If the mean salary for programmers in every country was the same, this would be a nice alternative for gathering multiple perspectives. However, due to the large variance in salary, programmers in first world countries get the short end of the stick and likely receive less wages because of outsourcing.

    Pitfalls from outsourcing include the possibility of group mentality on problems, different standards on components of a program, and the inability to hold people in different countries accountable for their actions. If a malicious employee was unhappy with their company but still had access to all of their source files (.lib), the employee could run all sorts of havoc internally.

    Reply

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