Global and Business Ethics

Global Business and Ethics Paper

In the early 2000s, the computer company, Dell, decided to outsource its call centers to India. After a start-up period to explore the benefits and risks of outsourcing overseas, Dell jumped in full force, creating at lest 4 call centers in India, and employing as of 2006 a total of at least 15,000 jobs in India. Dell's strategic outsourcing of its call center to India highlights what has become a growing trend in the 2000s, of outsourcing a variety of technology-related 'help desk' functions to countries overseas. Investigative news reporter Steven Mintz, writing for the San Diego Union Tribune in 2004, stated, "Outsourcing by the technology sector is a growing trend, with an estimated $10 billion in net contracts subject to outsourcing in 2004. By 2008, an estimated $23 billion will be subject to outsourcing by this sector. According to Cynthia Kroll, senior regional economist at UC Berkeley, at least 14 million service-sector jobs are at risk of being outsourced over the next decade." (Mintz, 2004) We are now in 2010, with a collapsed economy, a desperate need for jobs, and computer corporations are as avid as ever in their efforts to expand overseas call center outsourcing. Let us take a look at Dell Computers as a case study to examine why outsourcing call centers overseas holds such appeal, and the ethical issues involved, including both the issues arising within the international 'host' country, as well as the ethics outsourcing as these are played out over and over in terms of consequences to both employees and customers within the United States.

Already a global business in terms of sales of its computers worldwide, Dell Computers had kept its problem solving branch for customer service within the United States in the earlier years of its operations. However, it became clear in the late 1990s that improvements in technology and telephones would expansion of call to and from countries overseas to be quite inexpensive, as compared to international calling costs in the 1980s and early 1990s. Improvements in sound quality and speed of transmission opened up the possibility of outsourcing call centers to cheaper labor pools in countries around the world.

After significant research and discussion of the pros and cons, Dell Computers established its first customer contact call center in 2001, in Bangalore, India. The call center continued the tasks and activities that were essential to customer support and that had been the priority of the customer call center when it was in the U.S.A. The primary priority was to provide technical support, as well as making sales calls and reaching out to potential customers. Accounting tasks were also part of the call center outsourcing workload. From 2001 to 2003, Dell established additional call centers in Hyderabad and Mohali. (Dell's Customer, 2006).

Problems of the international outsourcing became apparent quickly. Over the first two years of operations, U.S. customers began to complain that the quality of technical support they were receiving had deteriorated. In 2003, Dell reversed its expansion of call centers and brought some of the tasks of the call centers back within the U.S. borders. However, after further research and discussion, Dell shifted the focus of hiring for the call centers, to concentrate on management of employees, and streamlined education of employees to create a standard set of call back center processes. Even so, technology industry feedback to the company indicated that there could be future problems if Dell increased its call center activities in India. The issue was not the training of call center operators, as this had been to a large extent resolved. The issue, instead, became one of competition to recruit and train the best operators, for other companies were flooding the call center market and establishing their own callback centers in India. (Dell's Customer, 2006). Dell had become one of many companies globalizing the technology support infrastructure of customer callback centers. Outsourcing was not longer a pioneering company activity, or even a risky customer satisfaction scenario. Companies like American Express, GE Capital, and many others had jumped on the bandwagon starting in the late 1990s, and the momentum just kept going. The initial glitches had been resolved, opening the doors to other types of problems of a larger nature, involving the overall ethics of outsourcing such a high number of jobs and this particular type of job, overseas.

To reporter Mintz, outsourcing is not necessarily an automatic negative for the U.S. economy or U.S. employees, although the staggering number of jobs now outsourced overseas tends to weigh against the ethics of outsourcing. Mintz noted that "Most supporters defend outsourcing based on economic considerations. Some say more jobs are created at home because the countries benefiting from outsourcing develop more spending power." (Mintz, 2004) What are some of the factors mitigating against outsourcing? These tend to be particularly the social and economic costs, combined.

The long-term effects are likely to be even greater unless actions are taken now to slow the trend. There are important social costs to consider. What happens to U.S. students who are in school to study computer technology, computer repair, and customer relations in the technology sector, as future careers? Should these students be told that the prospects for this work are a case of diminishing returns, because the jobs are over in India, or China, or Korea, or other countries around the world? A loss of morale through awareness of lack of jobs in the U.S.A. has affected the technology industry in this arena. Dell is making a good profit, and potential employees in the United States are on the bread lines. Are the ethics in favor of continuing the call center international