Employing and Managing Culture and Diversity - Case Study Example

Article  (Business) Name: Course: Instructor: Institution: City: Date: Table of Contents Table of Contents 2 The ethical issues raised by all three case studies 3 The Management issues raised by the case studies 4 Recommendations employing and managing culture and diversity 6 Conclusion 6 Reference list 8 Introduction One of the most important factors in any business entity is the ability to put ethics before profits. A business that prioritizes profit maximization at the expense of adequately compensating the factors of production will always suffer financial losses in the long run (Robbins et al., 2015). The most important and the most sensitive of the factors of production is labor. Employees are the people that make things happen within any organization and therefore need to be compensated justifiably for their efforts and time. Some organizations do not have this plight in mind and are accused of subjecting the employees in harsh working conditions with very unfair wages. Some in addition exploit intern students as a form of cheap labor to minimize their cost. All these are unethical and unfair business practices in the corporate world. This paper aims at looking ethical and management issues at the unfair treatment of employees in Seven eleven Company as well as employee treatment in India and China. The paper will also include the recommendations on the future of human resource management practices as far as diversity and culture is concerned. The ethical issues raised by all three case studies The three case studies point to Seven Eleven as a company struggling to cope with pressure over their blatant abuse of employee rights. It is clear that despite the regulatory agencies in place, evidences are emerging that franchises and their independently run franchisee are clearly flouting the rules. The question lingering in the mind of many people is on why franchises are not sensitive to the unfair workplace practices. Part of the problem and obviously the solution to this exploitative tendencies, lie with the company that owns the brand name, and holds the top most position in the structure of the franchise in Australia (Ferguson and Toft 2015). This is because in the commercial agreement between the franchisee and the head franchisor, the principal party sets the prices for their products and services, the buying price of the stock and the number of hours for operation by the stores. A very close look at the operations of 7-Eleven company shows that upon covering its labor costs, payment of interest and the required royalty payments to the franchisor’s head, the business operator will make an approximate forty thousand dollars in a financial year (Rhodes 2015). The principal franchisor will usually be very keen to protect the reputation of their brand and equally build on it through the control of the standards and making sure that the franchise networks comply so that they can always increase their cash inflows and consequently the royalties. However, it has been observed that in most cases the franchise will have the freedom to maximize on the brand and reducing costs as much as they can obviously to maximize on their profits. The only way though illegitimate to achieve this quest will usually to reduce the labor cost by underpaying the employees in the franchise (Rhodes 2015). The Management issues raised by the case studies The 7- Eleven company head office needs to take charge of their brand and stamp their authority. The head office need to set up a panel that is independent to receive complains that are labor related such as underpayment and exploitations of any nature. This would involve making sure that each and every employee working for the network of its franchise work under reasonable conditions irrespective of the nationality and age of the employee (Rhodes 2015). This would be a welcome development especially for the underpaid worker although the step might not iron some of the deeply rooted underlying issues that have been raised in the case studies. There is also the need for a discussion on the extent to which the head franchisor is liable on the ethical and management issues labeled against 7-Eleven company franchises. Since they dictate the terms of trade and are the owners of the franchise, then it would be in order for the regulator to hold the brand owner responsible for the misgivings of the franchise (Fraser, 2016). The exploitation of non-employees, especially the international students and migrants has received a lot of condemnation. Non-employees are those categories of employees who have no legal contract with their employers and therefore have no legal basis to file complaints against their employers for underpayment. Most organizations keen to maximize their profits will usually try to minimize costs by underpaying their employees (Fraser, 2016). The 7-Eleven franchise has in the recent past come under sharp criticism for their wage scandal where international students who seek employment in the stores are persistently underpaid and are usually threatened with deportation if they reported the mistreatment to the authorities. International students are usually victimized because their status as students does not allow them to be legally employed (Fraser, 2016). India and china are going through immense changes as the effects of globalisation are felt in the developing world. China’s dynamic economy has led to shortage in the labour force across the various sectors has forced organisations to begin improving the conditions in the work place while the government is doing its best to put in place institutions and laws for labour. Wages on the other hand are rising rapidly and it is estimated that on an average, wages rose by 14 per cent in 2012 (Robbins et al., 2015). Migrant workers once considered a source of cheap labour due to their numbers are now hard to find. Forced labour and child labour that was fashionable in the past in brick factories is now a thing of the past as the government ha enacted legislations to make it criminal to violate the labour relation rights. Provinces and municipalities on the other hand tried to outdo each other by coming up with attractive regulations to pull workers in their direction. Guangdong’s Pearl River delta for instance, a long-time leader in reforms is now out of favour for migrant workers due to poor working conditions. Reports indicate that 1000 of the province’s shoe manufacturers are now relocating to inland provinces and Vietnam as a result of labour shortages (Robbins et al., 2015). In the republic of India, concerns are being raised on the health of the workers in the information technology workers. The offshoring of IT and services of financial nature by companies such as NAB and Westpac has increased outsourcing of services and is estimated to have accounted for 7.5 per cent of Indian GDP in 2013 and by extension 20% of its exports (Robbins et al., 2015). It’s not however only Australian companies that source their labor from India. IBM, Microsoft and Hewlett-Packard have their operations in India where they serve clients in the United States of America and Europe. This IT boom is however having its toll on the IT workers in India. More workers are required to work for six days a week and twelve to 15 hour in a day making instances of burnout a very common (Robbins et al., 2015). Most of the organizations are now offering gym service, yoga classes, counseling hotlines and other welfare services meant to appease the workers to stay. Working on a call center attracts more people because they earn. The pay offer is however low relative to those of other industries. There are also more positive insights of people doubling as parents and also working because organizations are making conditions flexible for them (Robbins et al., 2015). Recommendations employing and managing culture and diversity For there to be workplace harmony, the organizational management needs to work on the issues that include adaptability, communication and change. Diversity is going to increase in the near future and organizations need to do more to manage the diversity for the good of the organization (Robbins et al., 2015). The following are some of the recommendations for managing cultural diversity within an organization. 1. Assessment of diversity in the organization- a customizable survey should be conducted to help the management determine the challenges to diversity and the policies needed to do away. Easement of the diversity plan should constantly be done to ascertain the chances of success. 2. Development of diversity plan in the organization- A comprehensive plan should be developed that is measurable and attainable. The management needs to identify the changes that they need also the time in which the changes are to be made. 3. The implementation of the cultural diversity plan- The management of the organization needs to place a personal commitment to this. They must put in place policies into the organization’s systems. It is important that the attitude on the diversity starts from the top then it goes down. The cooperation of the management is therefore priceless if creating a culture of diversity is to be achieved in the organization (Robbins et al., 2015). Conclusion Ethical issues in organizations have been on increase. There is need for organizations to address these issues before they destroy organizations reputation (Robbins et al., 2015). Human rights are guaranteed by local and international laws in Australia. We need a new focus on protecting workers from exploitation by their employers who are only keen in maximizing their profits. The migrant workers need to be protected from the under regulated labor market and enforce more compliance laws especially where international students are concerned. The Australian government is yet to make good their intentions of setting up a process of safeguarding employee rights and at this rate, Australia risks losing potential manpower. The same case applies to companies that operate in India and china. On cultural diversity, organizations should understand that diversity is strength owing to the different experiences. It should therefore be natured positively for the good of the organization. Reference list Ferguson, A and Toft, K 30th Sept., 2015, ‘7-Eleven: The price of convenience’. Retrieved from http://www.abc.net.au/4corners/stories/2015/08/30/4301164.htm Fraser, M 19th Feb 2016, 7-Eleven wage scandal update: Head office, franchisees, backpay claims etc,. Retrieved from http://thearbitrator.co/post/671cdfee-05b4-49d1-a33d-0aba92367155 Rhodes, C 2015. 7-Eleven, Volkswagen cases show why we should push back on ‘corporate ethics’. Retrieved from http://theconversation.com/7-eleven-volkswagen-cases-show-why-we-should-push-back-on-corporate-ethics-48739 Robbins, S, Bergman, R, Stagg, I & Coulter M 2015, Management 7, 7th edn, Pearson Australia. Read More