Social Dumping

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Discuss the Ethical Issues Involved in “Social Dumping”

Group name: F.P.Y.T

Group members:


Subject Code: IBU5HRM

Due day:

Table of Contents
1. Introduction3
2. The facts of social dumping5
3. Impact of social dumping and ethical issues8
3.1 Negative aspects of social dumping8
3.1.1 Employees in exporting countries8
3.1.2 Child labour in exporting countries9
3.1.3 Industry and environment in exporting country10
3.1.4 Government in exporting countries10
3.1.5 Employees in importing countries11
3.1.6 Shareholders of the company in importing countries11
3.2 Positive aspects of social dumping12
3.2.1 Company in importing country12
3.2.2 Shareholders in importing country12
3.2.3 Customers in importing country13
3.2.4 Industry in importing country13
3.2.5 Employment in exporting country13
3.2.6 Government and investment in exporting country13
4. Summary and recommendation15
5. References17

1. Introduction

With the booming development of the world, there is increasing number of ethical issues. Ethics can be known as moral philosophy, provides the standards to individuals and society about what is good or evil, what is right or wrong, what is virtue or vice. Ethical issue arises when individuals and groups confronted with the conflicts between minority’s interest and majority’s interest make wrong (unethical) decisions. The wrong decision might be beneficial to the minority in short term but definitely jeopardize the benefits of majority in the long run. Today, a controversial topic--- social dumping has become a noticeable ethical issue to cope with in the global market. Social dumping, a definition illustrates the situation in which a relatively rich country imports goods from another country where the production costs are lower and labor legislations are weaker. Social dumping represents an unfair advantage in the international and national trades as the exporter’s price of goods is artificially lower than its competitors in importer’s country, so the exporter’s goods are more competitive in the importer’s domestic market. As for international trade, importer’s country takes advantage of exporter’s country due to the low price of the goods. The exporter’s country may suffer a loss in trade balance as they buy relative expensive things from foreign countries but export very cheap commodities. However, it also increases the job opportunities in global market and win the money for certain group.( Eurofound, 30 November, 2010, industrial relations “social dumping” accessed 28th March) All these results of trades led to both good and bad changes in exporter’s country and 1importer’s country in terms of individuals’ wellbeing, productivity, social and labor standards, quality of employees’ lives etc. This report will discuss the ethics issues arose from social dumping, like the inhuman situations employees face, bad quality of life children suffer, unfair treatments in work etc. Cases of Nike and GAP help us understand the ethical issues and with discussing both bright and dark sides of “social dumping”, we will also develop some opinions to tackle these problems.

2. The facts of social dumping
A domestic country imports goods with lower cost from the foreign countries where there are low-standard labour legislations. The domestic country gains a competitive advantage by selling goods with lower cost in domestic market. The proliferation of social dumping over the world has made known to public long time ago. Here are two examples to illustrate facts resulted from minimizing the cost of products imported: 2.1---Nike

Nike, the most famous sports shoe company in the world, sells millions of shoes and clothes every year. However, Nike...
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