PHOTO: All Rights, Microsoft Corporation
No one is surprised that there are labor issues in China. While China is the premier manufacturing and outsourcing location in the world, it is also a dictatorial government. There are signs that they are trying to allow greater freedom for workers, but there is no history of worker's rights, and there are few channels to make positive changes for workers.
There is an undeniable record of workers being underpaid and over worked. The very visible problems at Apple give us insight into the numerous problems with Labor. However, step back a moment, and compare it to the early days of Ikea. Today an unhappy Apple engages with leaders in China to successfully improve conditions for workers. There are still many changes to be made, but progress is being made, including the doubling of worker pay. Ikea in the 80s didn't use the term "outsourcing, but it did use a "network of providers," including Soviet era manufacturers in Eastern Germany. Today we are learning that this deal came with slave labor from Soviet prisons. Ikea was aware of this, but didn't want to rock the boat, and endanger their low-cost supplier chain.
The big lesson from this is that when you work offshore, you get what you ask for. Apple is demanding humane work conditions, and they are getting them, by being a partner and not a disinterested recipient of services. When you choose your outsource, you are choosing a partner, and a specific culture. If you get a culture that puts profit over workers, it's because you chose that culture and did not push for transparency and oversight.
We know from the Ikea example that even decades later, you may be called to task for bad choices and unethical behavior, not just your own but that of your vendor partners as well. If you let the chance for slightly higher profits today guide your choices, be prepared to have your company's reputation crushed at some time in the future. Outsourcing isn't about washing your hands if how your services and products are produced. Like every other long-term partnership, it's about choosing your partners carefully!