2. ISSUES
International Business Ethics & HRM
Mode of Operation & IHRM
Ownership Issues relation to IHRM other than
Large Multi-nationals
Safety & Security Issues.
4. International Business Ethics and HRM
• Especially problematic when multinationals operate in host
countries that have:
Different standards of business practice
Economically impoverished
Inadequate legal infrastructure
Governments are corrupt, and
Human rights are habitually violated
5. Contd.
• Three main responses to the question:
– The ethical relativism believes that there are no universal or
international rights and wrongs, it all depends on a
particular culture’s values and beliefs - when in Rome, do as
the Romans do.
– The ethical absolutism believes that when in Rome, one
should do what one would do at home, regardless of what
the Romans do. This view of ethics gives primacy to one’s
own cultural values.
– In contrast, the ethical universalism believes that there are
fundamental principles of right and wrong which transcend
cultural boundaries and multinationals must adhere to these
fundamental principles or global values.
6. WORLD OF WORRY
Bribery and corruption top the list of the most frequent
ethical problems encountered by international managers.
The World Bank estimates that about $80 billion annually
goes to corrupt government officials.
7. RULE OF ETHICS
• Universal ethical principles can be seen in the agreements
among nations who are signatories to:
The United Nations Declaration of Human Rights
The OECD Guidelines for Multinational Enterprises (adopted
by the Organization of Economic Cooperation and
Development)
The Caux Roundtable Principles of Business
• They indicate the emergence of a trans-cultural corporate ethic
and provide guidelines that have direct applicability to a
number of the central operations and policies of multinationals
including the HRM activities of
staffing, compensation, employee training and occupational
health and safety.
8. Continued…
US Foreign Corrupt Practices Act, 1977
The United Nations adopted the UN Declaration Against
Corruption and Bribery in International Commercial
Transactions, in December 1996.
Prevention of Corruption Act, 1988 (INDIA)
9. Enforcement of Codes of Conduct
• The attitudes of senior management play a crucial role in
developing, implementing and sustaining high ethical
standards.
• HR professionals can help multinationals to institutionalize
adherence to ethics codes through a range of HR activities
including training and the performance–reward system
10. The Role of HR in implementing
Corporate Ethics Programs
HR has a special role to play in the formulation,
communication, monitoring, and enforcing an enterprise’s
ethics program.
The 2003 SHRM/ERC survey found that 71% of HR
professionals are involved in formulating ethics policies for
their enterprise.
69% are a primary resource for their enterprise’s ethics
initiative.
However, the SHRM respondents did not regard ethics as
the sole responsibility of HR.
11. Continued…
HR is well positioned to make an important contribution to
creating, implementing and sustaining ethical organizational
behavior within a strategic HR paradigm.
key factors for integrating responsibility for ethics into all aspects of
organizational life: expertise in the areas of organizational
culture, communication, training, performance
management, leadership, motivation, group
dynamics, organizational structure and change management
When recruiting and selecting expatriates, ability to manage with
integrity could be a job-relevant criterion.
12. Continued…
The pre-departure training of expatriates and the orientation
program should include an ethics component. This might include
formal studies in ethical theory and decision making as well as
interactive discussion and role playing around dilemmas which
expatriates are likely to encounter.
In designing training programs to meet the challenges of
multinational business, HR professionals must raise not only the
issue of cultural relativities but also the extent to which moral
imperatives transcend national and cultural boundaries. Insufficient
attention may result in unacceptable ethical compromises.
13. Mode of Operation and HRM
Emphasis on IJVs
Contractual modes such as licensing and management
contracts present challenges for IHRM that have yet to be fully
identified and explored
International projects often involve host-government agencies
and present specific HR challenges
14. Ownership Issues
Small and medium-sized firms (SMEs):
International activities place stress on limited resources
especially staff
Key individuals often represent the SME’s stock of international
competence
Retaining key staff critical
Converting tacit knowledge into organizational knowledge a
challenge
15. Ownership Issues
Family-owned Firms:
Not just a sub-set of SMEs
Management succession presents special HR planning
concerns
The globalization of family-owned firms has been a remote
topic in international business studies
16. Ownership Issues
Non-Government Organizations:
As active internationally as for-profit firms, yet receive less
attention, e.g. Red Cross
These organizations share similar management and HR
concerns
Often operate in high risk areas of the globe
Anti-globalization rallies and protest
Global terrorism
17. Safety, Security & Counter-Terrorism
In-facility emergency and disaster preparedness
In-facility Security
Industrial espionage, theft and sabotage
Cyber-terrorism
Out-of-facility fire and travel Risks.
18. RECENT TRENDS @ 2012
Managing talent in a rightsizing environment
Social Media: Blurring the line between real and virtual
Talent analytics and predictive modelling
Coaching will define talent management
Web software & cloud computing, changing HR technology
landscape
Boundary less engagement
19. Continued…
Employee as volunteers
Career direction
Owning the talent supply chain
Emergence of RPOs
Exclusive inclusion
HR transformation
