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Business Ethics in the News
HP: Are Companies Paying Suppliers Enough to Allow for Good HR Practices?
Tuesday, Feb. 12, 2013
Hewlett-Packard Co. announced this week that it would tighten oversight on its Chinese suppliers' use of student interns and temporary workers. Chinese factories often resort to interns and temporary workers to supplement its workforce while avoiding the costs associated with full-time employment, and reports of abuse of these workers are on the rise: such as long hours and being underpaid. In response to these trends, HP is imposing a limit on the number of student workers allowed at its suppliers, as well as mandating that they must be working in an area related to their field of study. While labor groups view HP's announcement as a positive step forward, many fear that the source of the problem is directly linked to HP not paying high enough supplier fees, forcing suppliers to cut corners to win contracts. Is HP obligated to take additional steps toward addressing this problem?
Patrick: While additional steps toward preventing labor force abuse should be taken, HP is not obligated to increase the amount they pay in supplier fees. Let's not forget that HP isn't the only moral agent here, suppliers and factory owners have a role to play as well. Accordingly, it is the responsibility of suppliers and factory owners not to take contracts that they cannot legally fulfill. Aggressive negotiation is well within HP's right and does not serve as an excuse for factory worker abuse. Despite this, HP should consider additional measures toward preventing this problem; such as, increasing the screening that suppliers and factories must go through, as well as implementing a penal system for transgressions.
Kirk: I think you let HP and other firms off too easily. The competitive bidding process inevitably leads to visible and hidden cost reduction. HP needs to do something concrete to demonstrate it is willing to pay for safe and humane working conditions. Imposing one or more standards, such as limiting intern workers, will likely lead to cost cutting elsewhere unless HP and other global forms that outsource can "lean against" bad practices by deep engagement and communication with suppliers.