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ORIGINAL PAPER
Decent Work: The Moral Status of Labor in Human Resource
Management
Miguel Alzola1
Received: 1 December 2015 / Accepted: 10 March 2017 /
Published online: 24 June 2017
� Springer Science+Business Media Dordrecht 2017
Abstract In this paper, I aim to critically examine a set of
assumptions that pervades human resource management

and HR practices. I shall argue that they experience a
remarkable ethics deficit, explain why this is so, and
explore how the UN Global Compact labor principles may
help taking ethics seriously in HRM. This paper contributes
to the understanding and critical examination of the
undisclosed beliefs underlying theory and practice in
human resource management and to the examination of
how the UN Global Compact’s ideal of ‘‘decent work’’
may offer some promising avenues for the development of
ethics in HRM.
Keywords Human resource management � Ethics of
labor � UN Global Compact � Decent work � Property rights
[H]itherto there has been no alternative for those who
lived by their labour, but that of labouring either each
for himself alone, or for a master. But the civilizing
and improving influences of association, and the
efficiency and economy of production on a large
scale, may be obtained without dividing the produc-

ers into two parties with hostile interests and feelings,
the many who do the work being mere servants under
the command of the one who supplies the funds, and
having no interest of their own in the enterprise
except to earn their wages with as little labour as
possible. (John Stuart Mill, Principles of Political
Economy, Book IV, Chapter VII)
The central tenet of this article is that human resources
management research and practices experience a remark-
able ethics deficit, which can be explained by some—often
undisclosed—threshold assumptions and ideals about the
nature of the field and the economic and political institu-
tions in which it is embedded. The invitation of this paper
is to consider whether the United Nations Global Compact
can help remedy such a shortfall.1
The UNGC labor standards—which are derived from
the International Labor Organization’s Declaration on
Fundamental Principles and Rights at Work—are based on

the principle that all employees around the world should
have decent working conditions (‘‘decent work’’ is also the
Sustainable Development Goal number eight). According
to these international agreements, decent work entails four
fundamental principles, namely freedom of association and
the right to collective bargaining, the elimination of forced
labor, the abolition of child labor, and the elimination of
discrimination in respect of employment and occupation.
Despite the fact that the ILO adopted these labor standards
back in 1998, it is apparent that its principles have not been
accomplished yet.2
& Miguel Alzola
[email protected]
1 Gabelli School of Business, Fordham University, 140 West
62nd St., Suite 305, New York, NY 10023, USA
1 The United Nations Global Compact (UNGC hereafter) is a
principle-based framework used to conduct business while
meeting
fundamental responsibilities in the domain of human rights,
labor,

environment, and anti-corruption.
2 A recent UNGC’s Good Practice Note (2014) warns
companies that
in order to meet their corporate responsibility to promote and
realize
decent work they should decide how to organize the human
rights
function internally ‘‘to effectively drive the process of
embedding
respect for human (including labor) rights.’’
https://www.unglobal
compact.org/library/921.
123
J Bus Ethics (2018) 147:835–853
https://doi.org/10.1007/s10551-017-3507-5
http://crossmark.crossref.org/dialog/?doi=10.1007/s10551-017-
3507-5&domain=pdf
http://crossmark.crossref.org/dialog/?doi=10.1007/s10551-017-
3507-5&domain=pdf
https://www.unglobalcompact.org/library/921
https://www.unglobalcompact.org/library/921
https://doi.org/10.1007/s10551-017-3507-5
In this paper, I will explain the limited realization of

such aspirations by reference to a set of assumptions
underlying our theories and practices of human resource
management, which are relevant to its moral dimension
and may prevent the achievement of decent work. The
paper is not concerned with the moral evaluation of HR
practices in themselves but rather with the understanding of
such practices as deserving moral evaluation. It is not an
investigation about the implementation and evaluation of
the UN Global Compact either. My goal is to provide an
explanation and a critical examination of the ethics deficit
in the HR field. Furthermore, I will consider the question
whether the UN Global Compact can help alleviate such a
deficit.3 And I will conclude with a call to take ethics
seriously in both the academic and the practitioner per-
spectives of HRM.
The paper is organized as follows. In section one, I
diagnose the state of the art and show why there is an ethics
deficit in HRM. In section two, I sketch an explanation of

such a deficit by reference to the assumptions and ideals in
which HRM practices and research are embedded. In sec-
tion three, I suggest why we have good reasons to put such
assumptions into question. In section four, I explore the
ways in which the UN Global Compact’s value of decent
work helps disputing the aforementioned assumptions and
provides some promising avenues for the development of
ethics in HRM. Section five concludes.
Diagnosis: An Ethics Deficit
At a first glance, one would argue that most decisions in
HRM constitute significant moral issues (McGregor 1960).
Encompassing everything from quality of work life to
workforce diversity, from job analysis and human resource
planning to recruitment and screening, from training to
performance appraisal, from pay systems and benefit plans
to profit sharing and employee stock ownership, from
union representation to employee voice systems, and from
health and safety to workplace privacy. HRM is a field rich

in ethical dilemmas. One may be tempted to claim that
decision-making in HRM is inherently morally relevant.
Yet, it is barely framed as a moral issue, both in the aca-
demic literature and in HR practices.
Recent surveys by the Society of Human Resource
Management indicate that almost 70% of 395 randomly
selected HR professionals responded that their organization
does not offer ethical training.4 Only 43% of human
resources professionals said their organizations include
ethical conduct as part of employees’ performance
appraisals. Only 23% of HR professionals say that their
organizations have a comprehensive ethics and compliance
program in place.5
Presumably, HR professionals are sensitive to moral
issues in their workplace. Some have reportedly quit their
jobs due to management misleading or lying to employees,
customers, vendors, shareholders, or the public. Further-
more, half (51%) of the organizations included in a study

of workplace bullying conducted in 2012 reported that
there had been incidents of bullying in their workplace,
which lead to decreased morale (68%), increased stress
and/or depression levels (48%) and decreased trust among
co-workers (45%). Such findings roughly reflect how HR
practices raise significant ethical dilemmas.
However, the role of ethics in HRM theory and practice
is barely examined in the literature to date (Winstanley and
Woodall 2000; Lengnick-Hall et al. 2009; Greenwood
2013; Jackson et al. 2014). The moral dimension of HRM
is typically evaded within academia and overlooked in
HRM systems and practices (Wright and McMahan 1992;
Legge 1995; Van Buren et al. 2011). This tendency is
reflected in the most influential papers in the HRM field
(Taylor et al. 1996; Matusik and Hill 1998; Lengnick-Hall
and Lengnick-Hall 1988; Baird and Meshoulam 1988;
Rogers and Wright 1998; Cascio 2005; Geare et al. 2006)
and finds expression in the HR function (Handy 2002;

Kochan 2007; Jack et al. 2012) and consulting activities
(Thomas and Ely 1996; Pfeffer 1998; Liu et al. 2007)
which are not typically framed as ethical issues.
I shall offer a handful of examples to illustrate what I
mean by ‘‘an ethics deficit’’ with the caveat that the list is
not exhaustive.
The first is, of course, the very name of the functional
area and the corresponding title of the academic field:
‘‘human resources.’’ Workers are named ‘‘resources,’’
which entails that they are treated like commodities, as
suggested by John Stuart Mill in the opening passage. Such
treatment is often regarded as demeaning because, if taken
seriously, it disrespects workers’ personhood. They are
considered to be like any other production factor, regard-
less of the fact that they are (also) human beings. Indeed,
since labor is allegedly subordinated to capital, it is not
even regarded as the most important production factor (De
Geus 2002).3 The intended contribution of this paper lies at the
level of the ideas

and ideals underlying HRM rather than at the level of the
implementation of the UNGC labor principles, which has been
thoroughly reviewed in recent special issues of Business Ethics
Quarterly (Vol. 21, No. 1), Business and Society (Vol. 52, No.
1), and
Journal of Business Ethics (Vol. 122, No. 2), among others. I
am
grateful to an anonymous reviewer for pressing this
clarification.
4
http://www.shrm.org/Research/SurveyFindings/Pages/Corporate
EthicsSocialResponsibility.aspx.
5
http://www.shrm.org/Research/SurveyFindings/Articles/Pages/E
thics
landscapeinAmerica.aspx.
836 M. Alzola
123
EthicsSocialResponsibility.aspx
EthicsSocialResponsibility.aspx
thicslandscapeinAmerica.aspx

thicslandscapeinAmerica.aspx
Even the views that are more sensitive to the workers
conceptualize them as ‘‘our most important asset’’, as
‘‘human capital,’’ or as ‘‘intellectual capital.’’ These tags
are revealing. Being a valuable ‘thing’ is still better than
being useless or replaceable, but it still fails to acknowl-
edge people’s humanity. The problem is worsened by
prevalent accounting techniques, which do not even record
the employees as assets but merely as costs (Lepak and
Snell 1999; Fulmer and Ployhart 2014; Russ 2014).
Second, the transition from HRM to strategic HRM
(SHRM) has been, among other things, a process of
focusing on corporate performance and financial metrics,
thereby emphasizing the instrumental view of workers as
mere means to strategic ends (Buckley et al. 2001; Leng-
nick-Hall et al. 2009). HR professionals have marginalized
employee-focused responsibilities and ethics activities

(Van Buren et al. 2011). As a result, trade-offs between
organizational goals and workers’ welfare are not only
conceivable but also permissible or even required (Wren
1995; Kaye 1999; Harley and Hardy 2004; Liu et al. 2007).
Third, the moral dimension of HRM research is
neglected because a commitment to ‘‘decent work’’ entails,
among other things, a commitment to ‘‘non-scientific val-
ues.’’ HRM as an academic field is self-presented as a
scientific approach, which is supposed to be morally neu-
tral or value-free (Bird and Waters 1989; Carroll 1991;
Schuler and Jackson 2005), and based on scientific evi-
dence rather than moral judgment (Lengnick-Hall and
Lengnick-Hall 1988; Batt 2002; Anker et al. 2003; Rous-
seau 2006; Pfeffer 1998). Thus, there is no room for a non-
scientific value such as ‘‘decency.’’
In sum, our intuitions tell us that decision-making on the
HRM function is morally significant but still neglected.
The fact that there is an ethics deficit in HRM is not a new

finding (Linehan and O’Brien 2016). But it remains an
under researched topic in academia as well as only a sec-
ondary concern in HR systems and practices.
An Explanation: Five Guiding Ideals
It follows from the above premise that there is a moral
deficit. The fact that is not perceived as a problem is
explained, I submit, by certain assumptions, which I take to
be the foundational beliefs of the field and the (often
undisclosed) normative ideals of HRM practices,6 namely:
• The autonomy of ethics and business.
• The priority of property rights.
• The virtues of competitive markets.
• The organization of the firm.
• The principle of national sovereignty.
These assumptions and ideals are particularly robust in
the Anglo-Saxon version of capitalism, invigorated by
neoclassical economics (e.g., Friedman 1962, 1970; Fama
and Jensen 1983) and libertarian theory (e.g., Nozick 1974;

Gaus 2011)
I will argue that these five assumptions comprise the
prevailing understanding of the firm, its environment, and,
indirectly, the HR function. These ideals drive and orga-
nize our thinking about HRM. Next, I will argue that such
assumptions have become self-fulfilled (Frey 1998; Ferraro
et al. 2005).
The Autonomy Thesis
Traditionally, philosophers and social scientists agree there
is a somewhat strong distinction between the normative
and the descriptive domains of academic research. The
distinction has been articulated in several ways (Hume
1739; Moore 1903). For simplicity’s sake, we can sum-
marize it by saying that business decision-making is basi-
cally amoral and that the domain of morality does not
overlap with the business world (Freeman 1994; Sandberg
2008).
According to this rationale, business decisions lack

moral content and ethical decisions do not appear in the
context of business, where facts have priority. One might
see this as an empirical thesis, which describes how busi-
ness executives think and behave as a matter of fact (or how
scholars think about such decisions). Alternatively, one
might conceive of this thesis as a normative claim about
how business executives ought to think and behave (or how
scholars ought to think about them) (see Alzola 2010).
What is implicit in the autonomy thesis is that each
domain is concerned with a different research question
(Sidgwick 1988). While HR practices and HRM research
are concerned with the question of what is the case, ethics
is about what ought to be the case. While HRM practi-
tioners and scholars are concerned with facts, ethicists are
interested in values, that is, with the moral evaluation of
such facts. While ethical decision-making is a matter of
what is believed to be ‘‘ethical’’ in HRM practices and
scholarship, to call something ‘‘ethical’’ in ethics entails a

moral predicate (Hasnas 1998).
Hence, it is not surprising that their methodologies,
assumptions about human nature, and goals are radically
different on both sides of the divide (Werhane 1994).
First, HR scholars aim to empirically test hypotheses as
a way to check the plausibility of their theories in
6 A careful reading of the most influential publications in HRM
suggests these five principles. But, typically, these
‘‘undisclosed
assumptions’’ are not explicitly discussed or argued for. Rather,
they
are taken for granted as the starting point of HRM theories.
They may
be considered to be so obvious that they do not need to be
defended.
Management 837
123
predictions or explanations of behavior (Harley and Hardy
2004). Ethicists, on the other hand, are concerned with

testing how consistent a theory is with our considered
moral beliefs. When our intuitions and beliefs are not
aligned with a moral theory’s prescriptions, we have to
adjust one, the other, or both (Rawls 1971).
Second, social scientists assume that human beings are
(at least to some extent) externally determined, a claim that
most ethicists would rightly reject insofar as it is incon-
sistent with our nature as noumenal selves, as autonomous
human beings who are responsible for what we do (Kant
1785).
Finally, while HR practitioners and scholars focus on
how to transition from theory to practice and how to suc-
cessfully apply their findings in real organizations (Co-
lakoglu et al. 2006), ethicists are rather interested in critical
reflection and deliberation about what ought to be the case,
above and beyond how the real world works (Kagan 1998).
Property Rights
Both HR practices and academic scholarship take the ideal

of a private property-based economy as a central pillar. We
can certainly think about HR research and practices on
alternative economic systems—such as HRM in socialist
economies—and certain regulations to the use of property
may still be consistent with mainstream scholarship on
HRM, but the backdrop assumption when we talk about
HRM is the widest possible level of private property.
The expression ‘‘maximum property rights’’ entails the
strongest protection of property along two dimensions,
namely, the extension and range of property (Gaus 2010).
The first dimension is concerned with what the owner
can do with the thing he or she owns (Honoré 1961).
Maximum property rights comprise the right to use the
thing, exclude others from using it, and the right to transfer
the thing (selling or renting it). It also entails the right to
managing and modifying the thing, enjoying its benefits,
being compensated when it is damaged by others, as well
as the right to destroy, spoil, or waste the thing. And it

includes the right not to be expropriated without a just
cause and fair compensation, which raises the issue of
legitimate taxation (Epstein 1985).
The second dimension is concerned with the question of
what can be owned, that is, what things can be privately
possessed. In the ideal system that informs HR practices
and research, both consumer goods and the means of pro-
duction can be privately owned. A more radical position
holds that natural resources can also be privatized. Indeed,
given the inconsistent rationality of our conduct at the
individual and the collective level—known as the tragedy
of the commons (Hardin 1968)—state ownership of natural
resources is seen as the cause of the environmental crisis
and, hence, according to this extreme view, should be
abolished (Schmidtz 1991). The privatization of natural
resources is proposed as the best solution to environmental
pollution and degradation because the price system is
supposed to induce an efficient search of alternative tech-

nologies and to favor the best use of scarce goods.
The right to property is, under this rationale, a natural
right that the law should protect in order to secure a sphere
of freedom for each individual so he or she can pursue his
or her interests without arbitrary interferences (Hayek
1945). Possessing property is then one of the fundamental
means to protect the individual against coercion. And that,
the argument goes, applies equally to the employer and the
employee (who has ownership over his or her labor).
The Virtues of Competitive Markets
Related to the extension and range of private property, is
the question about the relative role of government in the
economic system. Full protection of property rights pre-
sumably leads to a ban on government intervention in the
economy. The fundamental economic problem is the
coordination of who produces what for whom. In answer-
ing this question, one may appeal to a centralized planning
system. Alternatively, one may trust in decentralized,

market systems to make the most important decisions about
production and distribution in society (Hayek 1945).
HR practices and scholarship are based on the assump-
tion (the ideal) of the price system making those important
decisions instead of governments (Butler et al. 1991).
Labor markets, according to the assumption, can and will
deliver appropriate—one might say fair—outcomes, rep-
resenting the level of decency that is regarded as appro-
priate by market participants.
As described by the Coase’s theorem, regardless of the
initial allocation of property rights, when there are no
transaction costs or income effects, bargaining will lead to
an efficient outcome in the presence of externalities either
through payments due to liability or through bargaining
(Coase 1960). If Coase is correct, then the main justifica-
tion for government intervention—namely, that it is nec-
essary to regulate market failures arising from externalities
such as when one party imposes costs on another party who

is not considered in his or her calculations—collapses
because, according to Coase’s theorem, market transac-
tions can solve the problem of externalities and lead to
efficient outcomes.
Then, one standard way to reconcile the standpoint of
the firm (and its executives) with the standpoint of the
community is through the design of market institutions,
which entrust us to care for our own welfare instead of
adopting the standpoints of those affected by our decisions
(Maitland 1997). This is where the metaphor of the division
838 M. Alzola
123
of moral labor or ethical specialization enters. It has been
widely used in professional ethics (Luban 1994; Jacobs
2005) and political philosophy (Nagel 1979; Rawls 1982).
The idea is that through institutional design we can produce
a differentiation of the self between public and private roles

which externalizes the impartial requirements of morality
through such institutions, thereby reconciling the demands
of society and those of personal or individual morality
(Nagel 1995; Scanlon 1998; Scheffler and Munoz-Dardé
2005).
In the context of free markets, there is an institutional
division of moral labor: a system of checks and balances is
part of the market system—a sort of invisible hand—which
makes self-interested behavior permissible. Indeed,
according to the division-of-labor metaphor, it is not only
permissible but also required to care exclusively about
one’s own interests, because one’s partial activities are part
of an impartial scheme that benefits everyone (Heath
2006).
Assuming a principle of social division of responsibility,
competition is good because it creates social benefits. And
the virtues of competition are associated with the structure
of the social institution—i.e., the market, labor markets in

our case—rather than, paraphrasing Adam Smith, with the
good intentions or the benevolence of the employer (or the
workers, for that matter). Hence, market players do not
need to intend creating social benefits for us. It is enough
for them to act as self-interested rational agents who care
only for themselves because the price system will lead to
greater social efficiency. An invisible hand will guide
them. Thus, competitive behavior is not only permitted but
also required. And moral constraints are not only pointless
but actually harmful (Gauthier 1982).
The Theory of the Firm
The next ideal, which follows from the previous two
assumptions, is concerned with the questions of why
business firms emerge at all, where transactions are per-
formed (internally or in the market), and how economic
activities are organized within firms.
Three features distinguish the typical capitalist firm—
the structure that informs the theory of the firm guiding

both HR practices and research; they are for-profit, hier-
archical, and shareholder-oriented organizations. This is
not just a stipulation. This conception of the firm—the
standard Anglo-Saxon model—is said to summarize the
best management practices as well as the best normative
view of corporate structure and governance. According to
Hansmann and Kraakman (2001), there is worldwide legal
convergence on this model. And we should expect this
convergence to also produce substantial convergence in the
practices of corporate governance and corporate law in the
near future.
We are concerned here with the questions of what a
corporation is, its purpose, in whose interests it should be
governed, and who should control the corporation. If we
see the firm as a group of individuals who pool their money
for the sake of achieving some goals that they cannot
achieve or finance alone, it follows that the interests of the
shareholders have priority over the interests of the other

corporate constituencies.
Therefore, the primacy of shareholders is justified, in
the standard model, on grounds of property rights. If
the firm is just a piece of property of equity capital pro-
viders, it follows that their interests have priority as an
extension of the right to property that any person has
(Jensen and Meckling 1976). Ownership entails the right
to the thing and its proceeds (see ‘‘Property Rights’’
section above).
Hierarchy and control can also be justified as a matter of
property rights. Or, they can be justified on grounds of
efficiency: the firm is a hierarchical organization, the
argument goes, because hierarchy reduces transaction
costs, thereby maximizing profits (Jensen 2010). Neoclas-
sical economists show how production is organized in
hierarchical firms instead of markets and price mechanisms
when the transaction costs of conducting production
through market exchanges—in the absence of perfect

information, such as negotiating and information costs—
are greater than within the firm (Coase 1937).
There is, according to this fundamental assumption in
HR practices and research, a widespread consensus that a
firm is a profit-driven organization, in which shareholders
hold ultimate decision-making power and, as owners of the
firm, have a right to its profits (Huselid 1995; Legge 2005).
National Sovereignty
The last assumption amounts to another division of labor,
in this case in the global arena between state institutions
and non-state actors such as business corporations. The
assumption holds the concept of the sovereignty of nation-
states over their territory and domestic affairs, thereby
forbidding the intervention of external agents in such
issues. States are defined as the primary institutional agents
in an interstate system of relations. This assumption still
has a decisive influence in the way we think about HR
practices. The principle of national sovereignty, the right of

political self determination, and the principle of non-in-
tervention of one state in the internal affairs of another
state not only describe international relations but also
delineate the rights and obligations of non-state actors and
citizens.
Management 839
123
From these assumptions, it follows that nation-states
have the capacities and the political legitimacy to deal with
most regulatory issues of economic activities (which,
according to ‘‘Property Rights’’ section, will be strictly
limited in a capitalist system). Labor laws and local cus-
toms are the normative standards when it comes to define
HR practices. The same applies to the rights of other rel-
evant stakeholders. Legal standards and contracts matter,
as they establish what is owed to each group and person.

Laws and regulations are supposed to be the outcomes
of political deliberation in the context of democratic soci-
eties and the rule of law. These ideals, in turn, assume the
independency of the judiciary, the accountability and
transparency of government officials, and the integrity of
legal procedures (Waldron 2012). Furthermore, the state is
supposed to have in place effective enforcement capacities
(Lafont 2015).
The only actor that can draw on the resources of law and
legitimate enforcement power is the nation-state. It is not
the business of business firms to take on the responsibilities
of nation-states. Corporations do not have any special
responsibility no matter how powerful they may be
because, after all, they lack political legitimacy. Both HR
managers and scholars work under the assumption that
corporations operate in the context of functioning regula-
tory frameworks of national governments who take care of
their citizens’ welfare (Koontz 1969; Bhattacharya and

Wright 2005). Indeed, national laws are still viewed as the
main standard when it comes to the evaluation of interna-
tional HRM: ‘‘national governments generally play a lead
role in developing the framework of legal regulation of
employment’’ (Edwards and Kuruvilla 2005, p. 10).
Table 1 summarizes the foundational assumptions in the
HRM field and practices.
Five Ideals Under Fire
We are witnessing, perhaps as never before, an overload of
radical criticisms against capitalism. The international
protest movement is just one of many outings of this dis-
enchantment. Critics point their fingers to business firms
and the capitalist system. Business executives, politicians,
and even business schools are blamed for the current (and
recent) social and economic crises. Our confidence in
capitalism and market institutions has been seriously ero-
ded. Business firms and business practices—including HR
practices—are under serious social scrutiny precisely

because of the assumptions on which they rely. It has been
attributed to Keynes that capitalism is ‘‘the astonishing
belief that the nastiest motives of the nastiest men some-
how or other work for the best results in the best of all
possible worlds.’’ (Schuster 1951) But the evidence
apparently indicates that it does not even work for the best
results for everyone.
Besides the reasons we all have, as intellectuals, to
critically examine the foundational beliefs of our research
and HR systems, we also have prudential reasons to
question the deeply held ideals and unexamined ideas that
model our research and the HR function on grounds of
social legitimacy. This is where we turn in this section.
Autonomy Versus Integration
While the autonomy thesis is still very popular both in
ethics and management, a growing number of scholars are
questioning the is/ought distinction and the separation of
business and ethics (Weaver and Treviño 1994). Freeman

(2010), for one, pleads that the autonomy thesis is falla-
cious and should be rejected. Instead, he advocates what he
Table 1 Foundational assumptions in HRM
Ideals Assumption References
The autonomy of
ethics and
business
While HR practices and HRM research are concerned with
matters of fact,
ethics is about values and what ought to be
Rousseau (2006), Pfeffer (1998), Kagan
(1998) and Alzola (2011)
The priority of
property rights
Both HR practices and academic scholarship take the ideal of
the widest
possible level of private property, including labor as property
Gaus (2010), Honoré (1961), Epstein (1985)
and Hayek (1945)

The virtues of
competitive
markets
The virtues of competition—e.g., social welfare—are associated
with the
structure of the market rather than with the benevolence of
employers and
workers
Coase (1960), Luban (1994) and Scheffler
and Munoz-Dardé (2005)
The organization of
the firm
Firms are for-profit, non-democratic, and shareholder-oriented
organizations. Shareholders are special because they own the
firm and are
the residual risk-bearers. Hence, they should govern the firm
Jensen and Meckling (1976), Hansmann and
Kraakman (2001) and Jensen (2010)
The principle of
national

sovereignty
The sovereignty of nation-states over their territory and
domestic affairs
forbids the intervention of external agents such as business
firms in
national issues
Koontz (1969), Bhattacharya and Wright
(2005) and Edwards and Kuruvilla (2005)
840 M. Alzola
123
calls the integration thesis, which holds that ‘‘most business
decisions (…) have some ethical content or implicit ethical
view. Most ethical decisions (…) have some business or an
implicit view content about business’’ (Freeman 2010,
p. 7). Freeman has provided a second formulation of the
integration thesis, according to which ‘‘it makes no sense to
talk about business without ethics,’’ ‘‘it makes no sense to
talk about ethics without business,’’ and ‘‘it makes no sense

to talk about either business or ethics without talking about
human beings’’ (2010, p. 7).
Elsewhere, I have explained why both the autonomy
thesis and the integration thesis are problematic (Alzola
2011). Here, I shall briefly summarize the arguments
against the autonomy thesis. A strong dichotomy between
the realms of facts and values and between descriptive and
normative research are untenable because there are ‘‘thick’’
ethical concepts which are both descriptive and norma-
tive—such as decency or decent work—because of the
entanglement of facts and values (Putnam 2002). The value
creation process necessarily brings together economics and
ethics. Moreover, the development of sound normative
business ethics theories should rely on realistic assump-
tions about the kind of persons to whom those theories are
directed (Williams 1985). In other words, ought implies
can. Given that neither separation nor integration goes
without problems, we should recognize the limitations

normative and descriptive approaches reciprocally place on
each other.
In spite of hard efforts (e.g., Rousseau 2006; Rousseau
and Barends 2011), HR scholars cannot seriously expect to
be conducting pure value-free research because there is no
purely objective management research (Donaldson 1994).
The ideal of positivism is just an unachievable ideal
because social scientists cannot entirely disengage their
own values from the studies they conduct. HR scholars
make a number of value-laden decisions, from the selection
of observational techniques to the selection of what will be
observed, which has a decisive influence in the conceptu-
alization of the object of observation and in the conclusions
they will reach (Werhane 1994).
Management scholars will profit from acknowledging
the normative commitments of their research (Tenbrunsel
and Smith-Crowe 2008). As listed before, some of these
commitments are revealed by the discipline’s name, ‘‘hu-

man resources.’’ Calling workers as ‘‘resources’’ or capital
might be just a way to degrade them to the status of
commodities. Labor is, under this view, a resource that
firms can buy or terminate like any other production factor,
according to market rules. Whether one makes this com-
mitment explicit or not, it is a normative commitment
anyway. Likewise, a research agenda is a reflection of
allegiances about what matters in the field. When a scholar
chooses to focus on, say, workplace romance (Alder and
Quist 2014), talent retention or idiosyncratic deals (Rous-
seau 2005) rather than, say, workplace exploitation, decent
termination, or industrial democracy, the scholar is neces-
sarily taking a side. The ultimate question scholars and HR
practitioners might ask themselves is the uneasy and fun-
damental question of professional ethics: What cause are
we serving? (Luban 1994).
The Meaning and Scope of Property
The debate about property and its limits are especially

timely nowadays, when wealth disparities and income
inequality are among the most serious social concerns in
the Western world.7 It is not merely seen as obscene, it is
even said to harm the economy by creating instability and
undermining growth.8 Inequality and poverty increase
social pressures to redistribute wealth and address basic
social needs. And it challenges the moral status and eco-
nomic justification of the system that determines such
levels of wealth and income.
Having discussed the issue of property and property
rights along two dimensions, let us try to identify the
problems associated with the assumption of full property
rights along such dimensions. The issue of the extension of
property raises concerns over the permissibility of certain
uses of property and the legitimacy of taxation and wealth
redistribution. Ultimately, it is also a debate about the
social function of property and whether the government
may regulate the use of property.

First, the story of natural property rights as originated in
the labor of individuals prior to the institution of govern-
ment or civil society—as Locke, Nozick, and their fol-
lowers want to suggest—has been seriously discredited. All
of the things we exchange in the market were and are
governed by legal and social arrangements, which were
developed having in mind the needs of the communities
that allow the idea (and the very existence) of property.
Private property is a social artifact decisively shaped by
state institutions and public authorities, which have had a
prominent role in the institution and the distribution of such
rights. Hence, property rights are not ‘‘prior to society’’ and
its institutions. And what can be done with what one owns
is not only a private decision. This entails that all forms of
property might be democratically regulated and that such
regulations do not violate the owner’s liberty. In other
words, to say that any regulatory change is out of the
question once market mechanisms and property rights have

7 Georgescu, P. ‘‘Capitalists, Arise: We Need to Deal With
Income
Inequality’’ The New York Times, August 7, 2015. Available
at:
http://www.nytimes.com/2015/08/09/opinion/sunday/capitalists-
arise-
we-need-to-deal-with-income-inequality.html.
8 ‘‘Inequality and Its Perils’’, The National Journal,
09/28/2012.
Management 841
123
arise-we-need-to-deal-with-income-inequality.html
arise-we-need-to-deal-with-income-inequality.html
been established is the view of an outsider whose only goal
is rent-seeking, rather than the perspective of someone who
lives in that society and cares about welfare in such a
society (Waldron 2012).
One may argue, against libertarians, that rights to
property and rights to subsistence, in the context of a

community, are on a par. Need-based rights (welfare
rights) are not secondary. Property-based rights may not
have priority over welfare rights. Rather, basic unmet
needs challenge the legitimacy and the justification of
private property (Griffin 2008). Thus, in the same way the
standard assumption grounds property rights on freedom
and autonomy, one may argue that the right to a decent
life—including ‘‘decent work’’ as held by the UN Global
Compact labor standards—is fundamental to our concep-
tion of respect for the person as an autonomous being.
When it comes to the range of private property, that is,
to the question of what can be owned, the possession and
market exchange of other human beings is surely objec-
tionable. Most people are concerned about treating humans
as commodities, as is seen in the market of organs (body
parts), wombs (surrogate motherhood), and sex (prostitu-
tion), among others (Walzer 1984; Sandel 2012). Similar
concerns guide the adoption of the UN Global Compact

Principle Four about the elimination of forced labor, bon-
ded labor, and compulsory labor, as elaborated below.
The core issue is that when human bodies and body parts
are exchanged in the market they are valued and appreciated
according to market rules (Alzola 2012). Thus, the com-
modification of humans fails to respect their dignity as ends
in themselves—not merely as means. Similar objections
have been raised on grounds of exploitation and alienation
(Anderson 1990), gender inequality (Moller Okin 1989;
Pateman 1988) and social inequality (Satz 2010), which
also inform the UN Global Compact Principle Six about
discrimination in employment (see next section).
Furthermore, the privatization of natural resources and
the idea of natural-resource markets run counter the ideals
of equality and human rights, as they entail depriving some
human beings from, say, safe drinking water if they do not
have money to pay for them (UN 2010). In short, the
exploitation of natural resources in a way that overlooks

public goods and social needs may become intolerable and,
therefore, morally objectionable (Waldron 2012).
Markets and Justice
The virtues of market mechanisms relies on a number of
assumptions that lead to the division of moral labor
metaphor, which in turn leads to greater competition to
push prices toward the levels at which markets clear. At
that point, social resources have been put to their best use,
in which they go to those who derive the greatest satis-
faction from their consumption (Gaus 2010).
For competition to produce an efficient allocation of
goods and services, there should be symmetric information
between the parties to the market transaction, a complete set
of insurance markets, perfectly rational, utility-maximizing
agents who have consistent preferences, and no externali-
ties. None of these conditions is met in real markets. If the
conditions do not hold and the allocation of goods by a
market transaction is not efficient—it is not Pareto opti-

mal—then the virtues of competition and the permissibility
of competitive behavior do not hold either (Heath 2006).
Economists identify several sources of market failures,
including information asymmetries (adverse selection,
moral hazard, and information monopoly), non-competitive
markets (monopoly, monopsony, oligopoly, oligopsony),
principal–agent problems (moral hazard, conflict of inter-
est, and information asymmetries), externalities (costs or
benefits incurred by a party external to the transaction), and
public goods (non-excludable and non-rivalrous goods).9 In
addition, market interactions can also be seen as forms of
reciprocal and cooperative relationships in civil society
(Bruni and Sugden 2008).
In HRM, there are also market failures in labor markets
because the good traded in labor markets is not as homoge-
nous and tradable as other goods. Thus, workers’ produc-
tivity is heterogeneous and may be unobservable, jobs’
mobility is costly, and productivity is the result of amatching

process (Viscusi and Moore 1987). The typical sources of
labor market failures are the existence of skills gaps
(poaching workers instead of training them will lead to the
provision by firms of insufficient levels of general skills),
immobility (workers are not willing or able to move geo-
graphically, between industries, and between occupations,
all of which may bring about structural unemployment) and
inequality (asymmetric bargaining power, information
asymmetries, wage discrimination, exploitation).10
Economists investigate the causes of market failures and
propose possible means of correction. There are still con-
troversies about state intervention in the economy as ameans
to achieve efficiency and social justice. Above and beyond
the justification of government intervention as a remedy for
market failures, some authors suggest two institutional
responses. One involves the creation of the firm, which, as it
is explained on ‘‘The Theory of the Firm’’ section, entails the
substitution of an organizational hierarchy and a set of

administered transactions for a competitive market, which is
supposed to promote cooperative behavior in agency
9 A serious discussion of this issue goes beyond the scope of
this
paper but see Arrow (1973) and Stiglitz (1989).
10 Again, I cannot do justice to the issue of labor market
failures here
but see Cohen (1985) and Pindyck and Rubinfeld (2001).
842 M. Alzola
123
relationships. The second response involves the defense of
market transactions when the state regulations intended to
correct market failures are insufficient.
If the argument for the moral division of labor does not
work as a result of market failures, then as a matter of
justice, it is not morally permissible for business firms to
profit from market failures even when such conduct is
legally acceptable (Norman 2011).

Governance, Authority, and Legitimacy
Market imperfections are indeed relevant reasons to chal-
lenge the distinctive features of the capitalist firm—a
hierarchical and shareholder-oriented organization—that
are taken as given by HR scholars and practitioners. Market
failures may provide reasons for workplace democracy.
Two salient market imperfections are especially critic in
the realm of HRM. First, capital markets are not perfect, so
workers who lack collateral are not in a position to borrow
money in order to set up a firm. Second, the labor process is
not easy to monitor, and hence there are important moni-
toring costs. Democratically run corporations may be
superior to the typical capitalist firm in terms of account-
ability and efficiency.
At least two arguments from market failures have been
offered in support of democracy in the workplace. First, the
accountability argument is based on the premise that there is
a struggle between workers and their bosses over the per-

formance of labor because of the nature of the exchange of
labor for wage: in power relationships, those who exercise
power should be accountable to those directly affected by the
exercise of power. Ideally, everyone affected by a decision
should be given voice in such a decision (Dahl 1985). Sec-
ond, the efficiency argument holds that democratic firms will
be technologically more efficient (but also more risk averse)
than capitalist firms because, as residual claimants, workers
have strong incentives to monitor each other, thereby saving
monitoring costs (Bowles and Gintis 1993).
More generally, there is a widespread consensus about
the superiority of democracy as a governance system over
its competitors at the state level. Democratic government is
said to be associated with the promotion of citizens’
autonomy and personal development and it is said to pre-
serve the equal status of citizens (Nagel 1991; Dahl and
Shapiro 2015). In the workplace, equal voice and decision-
making power make significant contributions to political

democracy, as corporate members develop the attitudes,
interests, and skills of responsible citizenship in the
workplace (Pateman 1970).
The puzzle is why we glorify democracy when talking
about political institutions but accept autocracies when it
comes to corporate governance. Work is not organized
democratically today: business executives are not elected
by workers. Indeed, workers are supposed to obey rules and
orders in which they have no say. Why do we praise
democratic nations but do not object corporate oligarchies
(or managerial dictatorships)?
Many scholars subscribe to the analogy between politi-
cal and economic institutions and argue that if residents
deserve democratic rights in territorial organizations, then
employees must deserve comparable rights in economic
associations. It follows, the argument goes, that if
democracy cannot be justified at the corporate level, it
cannot be justified at the political level either (Dahl 1983).

Can the exercise of power by business executives be
legitimate if there is no participation in decision-making by
employees? The equal claims of corporate members justify
equal votes about binding rules.11 The argument holds that
decision-making power should be shared equally by all
who contribute to the enterprise. I am not talking here
about having a say, but rather about equal say and equal
vote. In this understanding, disciplinary sanctions and other
forms of punishment cannot be justified unless the rule
violated was adopted by a democratic process.
Workplace democracy is advocated both on utilitarian
and deontological grounds. It has been associated to greater
efficiency, reduced alienation, better relations between
labor and management, equity, job security, and contribu-
tions to political democracy (Spencer 1892; Werhane
2000). Democracy has also been defended as a matter of
justice and rights: employees have a moral right to
democracy in the workplace that derives from a more

general right, such as the right to autonomy. Such a right is
compromised by subjection to rules in which the workers
have no say (Mayer 2000). The right to democracy is not
trumped by property rights because the right to property
does not entail a right to command labor (Dahl 1983).
The second question, of whether firms should be orga-
nized to exclusively serve the interests of the shareholders
has been the subject of four decades of scholarship in
business ethics, so I would defer to the relevant literature
(e.g., Dunfee and Donaldson 1995; Freeman 2008). But it
would be helpful to return to a point raised in ‘‘The Theory
of the Firm’’ section on how alternative conceptions of the
firm lead to radically different approaches on corporate
governance and social responsibility.
An alternative view to the standard model of the firm as
private property (or as a nexus of contracts created to
reduce transaction costs) is to conceive of the corporation
as a social institution. Corporations do not exist in a legal

11 Some scholars argue against workplace democracy appealing
to
what they consider important disanalogies between the polity
and the
firm, in terms of different costs of exit, levels of consent
(whether
they are voluntary associations or not), asymmetric management
skills and knowledge, and alienability of voice and decision-
making
power. See Narveson (1992) and Mayer (2000).
Management 843
123
vacuum. They are authorized to operate in a community by
the relevant political authority. The authorization to
incorporate entails a number of privileges, such as limited
liability, unlimited life, separate legal status—they are
legal persons—and a permission to employ capital,
humans, and natural resources in their operations. In return,
they are expected to serve some important social goals that

justify their incorporation. A firm is not entitled to these
privileges when they fail to fulfill the goals that justify its
very existence (Donaldson and Dunfee 1994).
The Nation-State and the Post-Westphalian Order
International lawyers and scholars describe the present
global order as a post-Westphalian order, where there is a
shift in the balance of power from sovereign nation-states
to non-state actors—with a prominent role for transnational
corporations—and where the fragmentation of political
authority and the blend of public and private spheres
challenge our assumptions about national sovereignty, non-
intervention, and global governance (Scherer et al. 2009).
Today, the most pressing social issues, from human
rights violations to human exploitation, from environ-
mental pollution to transnational corruption, take place
within the borders of a nation-state but involve many forces
above and beyond the power of the nation-state. That
includes, of course, business corporations.

Globalization has pushed big corporations to expand
their operations beyond national borders, either investing
or sourcing in foreign countries that offer opportunities for
efficiencies and lower costs (Gereffi 1999). In their
transnational operations, corporations operate in contexts
of low institutional quality, where host countries lack an
effective rule of law, democratic decision-making, gover-
nance capacities to enforce the law, and decent regulations
in issues of health and safety, minimum wage, environ-
mental protection, etc. Unhealthy political institutions in
the host country, together with the pervasive problems of
cultural diversity and conflicting traditions, raise serious
concerns about the global practices—including HR prac-
tices—of transnational corporations (Kobrin 2001).
Market imperfections and public goods problems are
beyond the reach of most nation-states and cannot be
effectively regulated by the national law (Kaul et al. 2003).
Based on the realization that only a coalition of state and

non-state institutions, including transnational organiza-
tions, can successfully address these problems, some
authors argue for a post-national order, which reserve an
important role for business corporations (Matten and Crane
2005; Scherer and Palazzo 2007). Supranational actors can
and should—it is argued—fill these gaps. This is where
global initiatives such as the UN Global Compact enter.
They can contribute to address the crisis at the level in
which it is generated, with or without the collaboration of
state institutions.
This view not only departs from the classic Westphalian
order, but also entails a position about the responsibilities of
business firms and their executives, which is inconsistent
with the standard model discussed in ‘‘The Theory of the
Firm’’ section. Not only do they have obligations to promote
and protect human rights, they must also comply with labor
standards, preserve the natural environment, and refrain from
corruption in their national operations (as in the UN Global

Compact). In addition, they have similar responsibilities
along their supply chain, across national borders. The firm is
seen as a political actor with duties to fill regulatory gaps and
influence policy (Scherer et al. 2014). Such perspective is
roughly absent from mainstream research in HRM (Bhat-
tacharya and Wright 2005; Edwards and Kuruvilla 2005).
The UN Global Compact and the Ideals Behind
HRM
Can the UN Global Compact help alleviate the ethics
deficit in human resource management? If my story about
the ethics deficit in HR practices and research is persuasive
and the explanation offered here is accurate, it follows that
(part of) the remedies for the ethics shortfall will be found
in a thorough revision of the ideals and assumptions that
still guide scholars and practitioners.
The UN Global Compact Labor Principles
Can the UN Global Compact principles help rethinking the
fundamental assumptions discussed in sections two and

three? There are four labor standards in the Global Com-
pact’s ten principles to encourage business leaders world-
wide to adopt sustainable and socially responsible policies.
The principles—which, as mentioned above, are derived
from the ILO Declaration on Fundamental Principles and
Rights at Work (1998)—create special corporate obligations
to uphold four fundamental rights, namely, freedom of
association and collective bargaining (Principle 3), freedom
from forced and compulsory labor (Principle 4), the aboli-
tion of child labor (Principle 5), and the elimination of
discrimination in employment and occupation (Principle 6).
In turn, these principles derive from ILO Conventions and
Recommendations, which established international labor
standards on a broad range of issues related to work, from
human rights and occupational safety and health to wages,
employment policy, and human resources development.
The members of the ILO—which is a tripartite organi-
zation created in 1919 with representatives from govern-

ment, business corporations, and workers at the
844 M. Alzola
123
international level—identified four categories of labor
principles, expressed in eight core conventions that are
considered as fundamental because they protect basic
workers’ rights.12 These categories are the UN Global
Compact Principles 3, 4, 5, and 6:
Principle 3: Businesses should uphold the freedom of
association and the effective recognition of the right to
collective bargaining;
Principle 4: The elimination of all forms of forced and
compulsory labor;
Principle 5: The effective abolition of child labor; and
Principle 6: The elimination of discrimination in respect
of employment and occupation.
The four principles capture a particular understanding

about the status of labor and they are supposed to express
the guiding value of the UN Global Compact when it
comes to labor, namely, decent work. We have good rea-
sons to believe that ‘‘decent work’’ encompasses much
more than these four principles, from decent termination to
workplace safety to fair compensation, to name just a few
(Ghai 2002). Still, the UNGC at least provides a framework
for the analysis of labor practices. It is the beginning rather
than the end of the conversation about labor.
Freedom of Association and Collective Bargaining
Principle 3 (freedom of association and the right to col-
lective bargaining) comprises two fundamental human
rights. Such rights enable workers and employers to join
together and negotiate to protect not only their own eco-
nomic interests but also their civil freedoms, such as: the
right to life, to security, to integrity, and to personal and
collective freedom. In that sense, Principle 3 is an integral
part of the democratic system. Practically speaking, Prin-

ciple 3 entails respecting workers’ rights to form and join a
trade union without fear of intimidation or retaliation, the
promotion of non-discriminatory policies and procedures in
the workplace with respect to union membership in appli-
cations for employment, promotion, and termination, the
provision of appropriate facilities for worker representa-
tives, etc. Upholding the principle commits employers to
recognize representative organizations for the sake of
collective bargaining, to provide them with access to real
decision makers, and to offer them appropriate information
for collective bargaining. The adoption of Principle 3 also
creates an environment where the role and function of the
representative national employers’ organizations is taken
seriously and improves labor relations in countries with
weak legal institutions. In sum, freedom of association and
collective bargaining provide a platform for constructive
and genuine dialogue. And a genuine dialogue between
employers and freely elected workers’ representatives

helps create an understanding for each other’s interests,
building trust, and resolving conflicts.
Forced Labor
Principle 4 (the elimination of forced and compulsory
labor) encompasses a strong commitment to human dignity
and moral autonomy, the opposite of treating workers as
commodities (see ‘‘Diagnosis: An Ethics Deficit’’ section).
Labor exploitation can occur in various forms and is cur-
rently a global problem along the whole supply chain
significantly affecting trafficked migrant workers. Forced
labor, bonded labor, debt bondage, and other forms of
coercion are fundamental violations of human rights
because labor should be freely given and because workers
have a moral right to quit their jobs. The ILO estimates that
almost 21 million people are victims of forced labor
worldwide, 80% of which is exacted by private agents,
with children representing 40% of the victims.13
While multinational corporations joining the UNGC will

probably not be directly involved in compulsory or forced
labor, they may be so through their suppliers and subcon-
tractors, and thus they are required to exercise due dili-
gence in managing these relationships.
In addition, the abolition of forced labor demands a
comprehensive set of interventions involving not only the
victims but also their families, as these may be the only
alternatives these workers have.
Workers should be provided with employment contracts,
clear statements of terms and conditions of service, the
voluntary nature of relationship, and the freedom (and
procedure) to leave. Companies should prohibit the
requirement that workers lodge financial deposits with the
company. And they should not only remove the abusive
conditions but also assist with workers’ access to viable
alternatives and contribute to broader community efforts to
eliminate forced labor, including partnership with other
companies, collaboration with national authorities, and

other stakeholders, and even re-integration programs for
former victims of forced labor (UNGC 2010).
12 The eight Core Labor Conventions are: (1) Freedom of
association
and the right to collective bargaining (Freedom of Association
and
Protection of the Right to Organize Convention No. 87, 1948;
Right
to Organize and Collective Bargaining Convention No. 98,
1949); (2)
Forced Labor (Forced Labor Convention No. 29, 1930;
Abolition of
Forced Labor Convention No. 105, 1957); (3) Child Labor
(Minimum
Age Convention No. 138, 1973; Worst Forms of Child Labor
Convention No. 182, 1999); and (4) Discrimination in Respect
of
Employment and Occupation (Equal Remuneration Convention
No.
100, 1951; Discrimination [Employment and Occupation]
Convention
No. 111, 1958).
13 Available at http://www.ilo.org/global/topics/forced-

labour/lang–
en/index.htm.
Management 845
123
http://www.ilo.org/global/topics/forced-labour/lang--
en/index.htm
http://www.ilo.org/global/topics/forced-labour/lang--
en/index.htm
Child Labor
Principle 5 (the abolition of child labor) is not a standard
about ‘‘decent work’’ but actually about excluding certain
human beings from being part of the employment rela-
tionship, whether decent or indecent. ILO conventions
(Minimum Age Convention No. 138 and the Worst Forms
of Child Labor Convention No. 182) have established the
legal framework for the prohibition of child labor. National
laws should prescribe a minimum age for admission to
employment that must not be15 years.
Child labor is a form of exploitation that is particularly

serious, as it often includes the trafficking of children,
debt bondage, work which harms the health, safety or
morals of the child, the use of children in armed conflicts,
and the use of a child for illicit activities such as the
production and trafficking of drugs, prostitution, or
pornographic purposes. Child labor damages a child’s
physical, social, intellectual, and psychological develop-
ment. Children who fail to complete their basic education
are likely to remain illiterate and may not acquire the
skills that are necessary to flourish as a human being (ILO
2012).
As in the case of forced labor, signatory companies are
required not only to abolish child labor but also do it in
sensitive a way to avoid contributing to even more
exploitative forms of work. Companies have also pru-
dential reasons—i.e., reputational reasons—to disassoci-
ate themselves from child labor and conduct due diligence
including review of ILO and research about child labor in

the sectors and areas where they operate. Specifically,
companies should adhere to minimum age provisions of
national labor laws (and where the national law is insuf-
ficient, take account of ILO standards), use adequate
means of age verification, remove children from work
when they are found in the workplace (while helping the
child removed from the workplace and his/her family to
find viable alternatives), and press subcontractors, sup-
pliers and other business partners to abolish child labor.
As in Principle 4, UNGC signatories should also con-
tribute to broader national and international efforts to
eradicate child labor. They can also help children access
quality education and social protection by working in
partnership with local and national governments, other
companies, international organizations, media, and other
stakeholders.
Workplace Discrimination
Principle 6 (the elimination of employment discrimination)

is about equality and unequal treatment in the workplace in
such matters as hiring, compensation, and promotion. In
the context of the principle, discrimination entails a
wrongful act that deprives a person of some benefit or
opportunity, based on prejudicial treatment due to that
person’s membership in a certain group. Unequal treatment
in personnel decisions due to characteristics that are
unrelated to job performance or to the requirements of the
position—such as race, gender, religion, nationality, sexual
orientation, political ideas, or age—directly affects the
employment status and the terms and conditions of
employment of a person. The wrongness of workplace
discrimination can be explained in utilitarian terms: It is
wrong because it creates an economically inefficient
matching of people to jobs and may cause poverty and
related social problems. Alternatively, it can be described
as a violation of people’s humanity and their rights insofar
as stereotypes lead employers to treat individuals only as

members of groups, which denies them the dignity and
respect of equal treatment.
Eliminating discrimination in the workplace is a
strategic entry point for abolishing discrimination at the
societal level: it can help reduce unfair disadvantages,
such as in education, that people may have suffered at
earlier stages in their life. Plus, bringing together workers
with different backgrounds and treating them equally
contributes to building a sense of community that goes
beyond the company (Nagel 1973). ILO principles
establish minimum thresholds but national laws and
practices—including affirmative action programs—may
broaden these efforts.
Furthermore, companies have self-interested reasons—
from workplace performance, to talent retention, to repu-
tation—to combat discrimination and promote diversity in
the workplace. UNGC signatories should institute company
policies that make qualifications, skills, and experience the

basis for recruitment, training, and promotion. They should
issue company-wide procedures to guide equal employ-
ment. They should provide training on diversity policies
and practices. And they should adjust the physical envi-
ronment to ensure health and safety for people with dis-
abilities. In addition, Principle 6 entails a commitment to
avoid policies that would systematically disadvantage
certain groups, keep records on recruitment, training, and
promotion that provide a transparent view of opportunities
for workers, and establish grievance policies to address
complaints on discrimination (UNGC 2014).
Principle 6 encourages companies to support broader
efforts to build a climate of tolerance and equal access to
opportunities for occupational development. In their global
operations, companies may need to adapt to local traditions
and work with representatives of workers and governments
to ensure equal access to employment, training, and
promotion.

846 M. Alzola
123
Reconsidering the Fundamental Assumptions
Besides the detailed analysis of the four UNGC labor prin-
ciples, it should be highlighted that the very existence of the
UN Global Compact and its guiding ideal of decent work
may be framed as a challenge to each of the threshold
assumptions in HRM discussed in sections two and three.
First, the notion of ‘‘decent work’’—which guides the
UNGC and is also the Sustainable Development Goal num-
ber eight—and the appeal to rights above and beyond what
the national law requires—technically, these are called
‘‘moral rights’’—challenge the separation of ethics and
business (or ethics and HRM). ‘‘Decency’’ is a good example
of what Putnam (2002) calls thick concepts, which entangle
facts and values, that is, descriptive and normative compo-
nents. We cannot talk about decency in the morally neutral

way that social scientists intend in the HR field. The concept
of decency reveals the normative commitments behind the
UNGC.
Second, the priority of property rights is put into ques-
tion by a system that upholds the promotion and protection
of four human rights because property does not have the
status of a human right (not at least in the Universal
Declaration of Human Rights, the ILO, or the Global
Compact) while labor does have such status (Kolben 2009).
Consequently, when property rights are in conflict with the
UNGC rights to freedom of association, collective bar-
gaining, non-discrimination, and the prohibition of forced
labor and child labor, such rights should prevail over the
employer’s right to property.
Third, the UNGC’s appeal to the responsibility of com-
panies and executives to use more stringent labor stan-
dards—when national labor laws and regulations are
insufficient—as well as the plea for contributions to broader

national and international efforts—to abolish forced labor,
child labor, and customary workplace discrimination—
challenge the idea of the moral division of labor and the ideal
of free markets always delivering fair outcomes (or ‘‘decent
work’’). And so do the expectation of business cooperating
with national authorities, suppliers, subcontractors, media,
and other stakeholders to realize the standards of the UNGC.
Fourth, unless we stretch too much the scope of Prin-
ciple 3, we should conclude that the UNGC does not have
much to say about workplace democracy—at least not the
sense of democracy that is discussed in ‘‘Governance,
Authority, and Legitimacy’’ section—or about corporate
governance in general. Still, it does challenge the ideal that
companies should be exclusively oriented to maximize
shareholder value because, as it is explained above,
employers should give priority to the UNGC labor princi-
ples when they are in conflict with profits. Taking the
UNGC labor rights seriously entails that they cannot be

traded off for profits or economic or social benefits.
Finally, when the UNGC encourages signatories to
adhere to local laws and regulations (e.g., concerning
forced labor, child labor, or discrimination) but requires
taking account of international labor standards where
national laws are insufficient, it demands companies to
overlook the principle of national sovereignty. In that
sense, the UNGC is an illustration of the present global
order, described by political scientists and legal scholars as
a post-Westphalian order. The shift in the balance of power
from sovereign nation-states to non-state institutions, the
fragmentation of political authority, and the blend of the
public and the private spheres challenge the fifth assump-
tion about national sovereignty and non-intervention.
Business firms are expected to address social issues above
and beyond borders, they are required to protect the natural
environment, they should engage in self-regulation to fill
legal gaps, and they in fact promote more demanding labor

standards (Scherer et al. 2015).
The transnational operations of business firms in a post-
Wesphalian order create a number of problems to the way
that HR departments and HR scholars define responsible
labor practices (Scherer and Palazzo 2007). When it comes
to workers’ rights, the standard to follow is not simply the
national standards. Corporations operate in environments
where certain practices of dubious morality may be
accepted either because they are not legally prohibited or
because they are legally banned but remain unenforced
(from issues of workplace privacy to wage policies to
health and safety conditions). Still, decency entails that
workers should be treated as equals. Their moral rights are
the standards to follow when multinational corporations
operate in weak institutional environments.
Moving Forward
The UN Global Compact is an important step forward in
order to revise the HR function. Yet, it is far from enough.

The UNGC constitutes a minimalist agreement among the
participants on a limited set of fundamental labor human
rights whose realization might still be compatible with some
of the questionable assumptions examined in section two.
For example, we have good reasons to believe that ‘‘decent
work’’ comprises some requirements about selection, ter-
mination, compensation, etc., which are absent in the UNGC
Labor Principles (e.g., the UNGC does not include any
reference to wages). In other words, it is possible to uphold
the workers’ freedom of association, collective bargaining,
non-discrimination, and elimination of forced and child
labor while still failing to provide ‘‘decent work’’.
Moreover, there are serious concerns about the UNGC
achievements because the available evidence seems to
indicate that it has failed to bring its signatory companies
to enhance their efforts and integrate its labor principles in
Management 847

123
their policies and operations (Kell and Levin 2003; Wil-
liams 2004; Deva 2006; Gilbert 2010). For instance, it has
been reported that the issue of gender inequality was
missing from the UNGC’s agenda in its first decade, a
finding which is explained by the lack of gender discourse
and the lack of participation of women’s organizations in
the UNGC learning network as well as the UNGC’s pri-
mary focus on the business rather than the moral case
(Kilgour 2013).14
Furthermore, some authors have questioned the
UNGC’s governance structure, which allegedly does not
encourage accountability for actions or transparency in
external communications (Rasche et al. 2013). Other critics
emphasize that it is fundamentally flawed because it does
not impose verifiable obligations on signatories and it does
not force them to adhere to their program requirements

(Sethi and Schepers 2014). There are also longstanding
concerns about companies exploiting the legitimacy of the
UN with no genuine interest in changing their business
practices (Zammit 2003; Bennie et al. 2007; Fall 2009).
Other scholars have addressed these concerns and soft-
ened (and/or discredit) these objections (e.g., Williams
2014). While adjudicating between these claims is beyond
the scope of my paper, I submit here that if the UNGC
contributes to reexamine the principles and ideals that
guide the HR function and scholarship on HRM it may be
considered—in the context of this paper—successful. My
case rests on the following four reasons, which do not
constitute an exhaustive list of developments but is rather a
short selection of promising issues for further analysis.
To begin with, scholars and practitioners should
acknowledge and critically examine their guiding ideals
and recognize the limitations of the supposed neutrality of
HRM practices and research. They should consider how

some of their deeply held beliefs about full property rights
and free markets are still consistent, after all, with the
social function of property, progressive taxation, stake-
holder management, and democratically run business cor-
porations. And they may want to reassess the political
responsibilities of business firms in light of the governance
gaps at the national and global levels. Consider one last
example. Despite well-established international labor
standards, child labor and forced labor still persist today in
democratic nations—as the new labor law in Bolivia low-
ering the working age to 10 illustrates15—posing serious
questions on the sort of guidelines that companies should
follow when operating abroad. The notion of moral
rights—as opposed to legal rights at the national level—
should be the ultimate standard. The UNGC labor stan-
dards, which can be seen as grounded in the notion of
moral (human) rights, offer the resources to hold multi-
national corporations liable—at least morally liable—not

only for their conduct but also for the HR practices of its
suppliers and subsidiaries, an issue that is mostly neglected
in the HR literature (Rowley and Warner 2007; Preuss
et al. 2009).
Second, regardless of how well intended our research
and practices on HRM are, the name of the academic field
and the business function is not trivial and should be
reassessed. I would not go as far as Legge (1998) and
Greenwood (2002), who seem to suggest that HRM is
ethical only if it treats employees as more than a means to
an end. Labor is a means of production. Workers are (also)
means. But the concern here is about treating people in
general and workers in particular, as a mere means to an
end (Parfit 2011). I am certainly used as a means in my job
as a university professor. But using someone as a mere
means is to involve him or her in a scheme of action to
which he or she does not or could not reasonably consent. It
involves a violation of the moral equality of people (Kant

1785). That is why it is debasing to reduce human beings to
commodities, as the name of the discipline suggests.
A third theme is about governance: perhaps it is time to
revise our theories of the firm. The analogy of the corpo-
ration with the army—to justify its hierarchical nature—is
losing its enchantment, as it reduces the learning capacity
of organizations (De Geus 2002) and delegitimizes man-
agerial authority (McMahon 2012). This is not simply a
call for allowing employees to exercise some influence
over their work and the conditions under which they work,
from ‘‘participation in the workplace’’ to ‘‘holacrocy.’’ It is
not merely a call for voice as a matter of organizational
justice (Thibaut and Walker 1975). Rather, it is an invita-
tion to consider an ethics of distributed power, in which
employees have some real control over organizational goal
setting and strategic planning: democratic business orga-
nizations with full voice, voting rights, and decision-mak-
ing power (Landemore and Ferreras 2016). As Solomon

(1992), Handy (2002), and other management scholars
have persuasively argued, corporations resemble commu-
nities, and good corporations are good communities. Then,
communities have members. And members have certain
rights, such as a right to a voice and a right to vote.
But there are internal and external obstacles to democ-
racy. On the one hand, there is a concern that professional
managers are not prepared to share power, even if they are
willing (or forced) to do so. It is not simply a matter of
delegating authority. Policies need to be set in order to
14 This has resulted in a loss of public trust and support from
important constituencies in civil society to the point that some
authors
suggest the UNGC should admit the problem and dissolve itself
(Sethi
and Schepers 2014).
15 ‘‘Bolivia’s child labour law shames us all’’ The Guardian,
July 25,
2014. Available at: http://www.theguardian.com/global-
development/
poverty-matters/2014/jul/25/bolivia-child-labour-law-

exploitation-
slavery.
848 M. Alzola
123
http://www.theguardian.com/global-development/poverty-
matters/2014/jul/25/bolivia-child-labour-law-exploitation-
slavery
slavery
slavery
avoid that employees ask the next-higher level to make
decisions for them (Sheppard and Lewicki 1987; De Geus
2002). Moreover, in their transnational operations, corpo-
rations learn that the prevailing corporate culture in certain
countries is oligarchic and family based, where the dele-
gation of authority is not well regarded. Paternalism in the
workplace is surely a problem when it comes to ‘‘decent
work’’ (Kerfoot and Knights 1993; Jacoby 1998; Fleming
2005; Soylu 2011). Employers providing for the welfare of

their employees may encourage the dependency of the
employee on the employer (Sennett 1999). Reliance on a
paternalistic style of employee management restricts
employees’ freedom by imposing on them well-intended
regulation (Purcell 1987). The moral principle that should
guide the idea of decent work on this matter is that business
firms and managers are not entitled to impose their views
on employees about what activities employees should
engage in order to live better lives (Bowie 1998). Even if
inspired by benevolence, employers should not interfere
with the worker’s conception of how he or she wishes to
obtain happiness because they are autonomous human
beings.
Finally, HR staff and HR departments have a critical
role of representing employees’ concerns and they have an
enormous influence in the overall ethical culture of the
organization. We have good reasons to highlight such
responsibilities. They can help building the conditions for a

genuine dialogue between companies and workers, which
enables both to understand each other’s problems and to
build trust on both sides. The concern is not only about
decent HR practices but also how HR practices become a
pillar for corporate behavior. HR practitioners have the
tools to treat people with concern and respect. They can
integrate ethics into job design, selection, performance
appraisal systems, training and development, compensa-
tion, etc. Thus, overcoming the autonomy thesis, HR
practitioners and scholars should realize that they are
central players in achieving decent work, in fostering eth-
ical behavior in the firm, and in decisively helping in the
construction of a better society, which should be the ulti-
mate goal of the HR function.
Conclusion
In the opening passage, written 168 years ago, John Stuart
Mill explains how it is possible to achieve economic effi-
ciency through cooperation, ‘‘without dividing the pro-

ducers into two parties with hostile interests and feelings.’’
The passage can be reinterpreted today as a call for how
business can play a role in a sustainable future and how
voluntary self-regulation can help achieving ‘‘decent
work’’ in a global context.
The UNGC may not be enough to reunite ‘‘the pro-
ducers’’ but it does help to reconsider the fundamental
assumptions in HR theory and practices. Part of the power
of UNGC Labor Principles comes from how well they fit
with mainstream ethical principles. Decent work is not only
consistent with equal concern and respect for workers but it
is also good for society and presumably good for business.
Business corporations that protect workers’ freedom of
association and their rights to collective bargaining, which
do not exploit their workers, do not employ child labor,
promote non-discriminatory practices, and embrace diver-
sity and inclusion, will probably fare better in the long
term. Responsible labor practices will be rewarded with

greater access to skilled and talented workers, a better
ethical climate, and a lower risk of reputational damage
and legal liability. In the end, the hope is that the business
case meets the moral case and so improving labor practices
beyond legal compliance will result in higher morale and
job satisfaction and foster creativity and innovation.16
But even if it does not, its call for a consensus in the
global community about the shared values and moral
norms that should guide the global economy is a great
accomplishment (Williams 2014). Surely child labor and
forced labor are still in place, hazardous workplaces con-
tinue to exist, the problem of low wages still persists, and
discrimination remains a challenge. But the language of
decent work can change the game. Decent work involves
employment that is productive and delivers a fair income.
It also ensures workplace security, some forms of social
protection, better prospects for psychological development,
higher levels of trust, increased diversity, equal opportu-

nities and equal treatment, and freedom to express work-
place concerns, and social integration.
I hope I have persuaded you that there is a moral deficit
in HRM, which can be explained by reference to five
threshold assumptions of the field, which are also the
functional ideals that guide HRM practices. These funda-
mental assumptions are the autonomy of HRM and ethics,
the priority of property rights, the power of free markets to
deliver decent outcomes, the understanding of the firm as a
hierarchical and shareholder-oriented organization, and the
acceptance of the principle of national sovereignty. If my
case is compelling, we have good reasons to put these ideas
and ideals into question. The UNGC Labor principles,
although they are a work in progress, can decisively help in
that endeavor. That might be the starting point of taking
ethics seriously in HRM.
16 https://www.unglobalcompact.org/what-is-gc/our-
work/social/

labour.
Management 849
123
https://www.unglobalcompact.org/what-is-gc/our-
work/social/labour
https://www.unglobalcompact.org/what-is-gc/our-
work/social/labour
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