Critical Analysis of the Ethical and Social Responsibility Issues that Arise in IHRM Practices - Essay Example

? Critical analysis of the ethical and social responsibility issues that arise in IHRM practices Table of contents Executive Summary 3 Introduction 4 2. International Human Resources Management – description, overview 4 3. Ethical and social responsibility issues related to IHRM practices 6 4. Conclusion 9 References 10 Appendix 12 Executive Summary The success of organizational practices is usually related to their effects on the organizational performance. However, the content of these practices cannot be ignored even if their contribution in business growth is important. In fact, it has been proved that organizational practices, which are opposed to existing ethics, are not viable in the long term. Moreover, it seems that in the modern market the alignment of business policies with existing ethical standards or the organization’s social responsibility rules is not always guaranteed. The above problem is most extensive in organizational strategies that are involved in the international market – where the effective control of business policies can be quite difficult. On the other hand, there are organizational sectors that are more exposed to ethical and social responsibility problems: the IHRM is an indicative example. The limitation of the effectiveness of IHRM strategies as reflected in the ethical and social responsibility issues related to these strategies can be addressed by adopting different approaches in all phases of HRM – both in the context of the national and the international market. 1. Introduction The continuous increase of competition in the global market has led firms to develop practices, which will help them to improve their position towards their rivals. The human resources management sector of each organization has a key role in the stabilization and the improvement of a firm’s position in its market; however, the practices used by managers for developing the specific sector are differentiated, under the influence of the conditions in the internal and external organizational environment. Current paper focuses on the presentation and the critical analysis of the ethical and social responsibilities issues related to the international human resources management (IHRM) practices. The literature published in the specific field is reviewed and critically evaluated. It is proved that, at a first level, there are certain standards that HR managers need to follow when developing the HRM policies of their organization. These standards can be market driven, referring to the rules applied on a particular market, or organizational driven, referring to the ethics related to the culture and the corporate social responsibility of the particular organization. However, in certain cases, these standards are ignored, usually under the pressure for increasing organizational productivity. In the context of the international market, the above initiatives have even more challenges to face, as explained in the sections that follow. 2. International Human Resources Management – description, overview International human resource management (IHRM) can be described as a complex organizational activity, referring not just to the globalization of a firm’s HRM practices, but also to their appropriate transformation so that they are aligned with the characteristics and the needs of the local market (Perkins and Shortland 2006, 26). From a similar point of view, Briscoe, Schuler and Claus (2008) note that IHRM management needs to address a series of issues developed ‘at local, cross-border and global level’ (Briscoe, Schuler and Claus 2008, 32); Reference is made, as an example, to the staffing, compensation, selection and training of staff at local and international level (Briscoe, Schuler and Claus 2008, 32). Moreover, Stahl and Bjorkman (2006) note that the IHRM refers to ‘the way that organizations that operate across national borders manage their employees’ (Stahl and Bjorkman 2006, 68). It is also explained that through the years the framework of IHRM has been expanded including all employees of a particular organization, not only ‘those who are working internationally’ (Stahl and Bjorkman 2006, 68). The context of the IHRM could be made clear by referring to the view of Armstrong (2006) on HRM; in accordance with the above researcher, in each organization, HRM should address the following issues: the content of HRM practices, the beliefs and the rules of the HRM on which the above practices need to be based and the HRM strategies through which these practices will be implemented – both at local and international level (Armstrong 2006, 4). In order to understand the ethical and social responsibility issues related to IHRM practices, it would be necessary to refer primarily to the role and the content of IHRM, as key part of strategic management. A common form of IHRM, as developed by organizations worldwide is presented in Graph 1, Appendix. It is clear that IHRM needs to include a series of activities, aiming to support the successful completion of all organizational tasks. In accordance with the above graph, IHRM has to ensure the alignment of the organization’s HR practices with the employment law in the local market (referring to the host market where the organization operates); issues like the education and the insurance of employees need to be resolved as suggested by the local legal rules and procedures. From a similar point of view, IHRM management can focus on the preparation of employees to work in the international market – meaning the branches of their organization in countries worldwide (Graph 2, Appendix). In this context, emphasis should be given on the motivation of employees to work abroad. Appropriate selection and support strategies could increase employees’ motivation to join the firm’s units in the international market. The form of the IHRM framework developed in each organization could be similar with those presenting in Graphs 1 and 2 (Appendix); different choices regarding the content of this framework are always possible. However, there are certain rules that have to be necessarily followed when developing the IHRM framework of modern organizations, meaning the ethics and the social responsibility rules governing the activities of each organization, as defined in the legal rules regulating the particular market. 3. Ethical and social responsibility issues related to IHRM practices Like all organizational practices, IHRM practices are expected to be related to certain ethical and social responsibility issues. In the literature, different approaches have been used in order to explain the ethical and social responsibility aspects of IHRM practices. In accordance with Durai (2010, 649) the relationship between the IHRM and the market and business ethics can be derived from the following fact: IHRM practices need to be aligned with the firm’s strategies; from this point of view, these practices need to follow the ethical and the social responsibility rules of the particular organization, as these rules are influenced by the ethical standards of the local and the international market. Therefore, the dependency of IHRM practices on ethics and social responsibility rules is full, meaning that the differentiation of the above practices from these rules would not be acceptable. Furthermore, Cornelius (2001) note that in the context of the IHRM, the ethical standards that should be taken into consideration would have two different forms, including: a) the organizational ethics, as included in the organizational culture and b) the ethics of the host country, as included in the local culture (Cornelius 2001, 216). Referring to the role of ethics in IHRM management, Schuler and Jackson (1999, 400) note that IHRM management needs to respond to specific organizational needs; reference is made specifically to ethical awareness, which allows to the organization to increase its competitiveness both in the local and the global market. Ethical awareness, as an element of the IHRM management, would include the following activities: a) the understanding of the different ethical frameworks as promoted within a particular market, for example, ‘utilitarianism, justice and so on’ (Schuler and Jackson, 1999, 400) and b) the understanding of the potential differences of ethical standards across market with different cultural characteristics (Schuler and Jackson, 1999, 400). The above view is differentiated from the one of Durai (2010), presented above, at the following point: the emphasis of IHRM on ethics is not regarded as a result of the need for aligning IHRM practices with the corporate strategy (as Durai, 2010, suggests) but rather of the need for achieving a competitive advantage in the local or the international market – through increasing ethical awareness. In the context of the relationship between IHRM and ethics, a series of ethical and social responsibility issues are expected to be developed within the IHRM framework. In accordance with the literature published in the specific field, these issues are likely to be similar, even if, under certain terms, differentiations can be reported, minor ones though. In accordance with Koster (2007) HRM is likely to be related to the following ethical issues: ‘a) the transfer of economic risk from the employer to the employee and b) the surveillance of employees in the workplace’ (Koster 2007, 5). The above ethical issues are also expected to be present in IHRM practices, taking into consideration the fact that the latter tend to be expanded including also employees in the home country, as explained above. On the other hand, Dowling, Festing and Engle (2008) highlight the following ethical issue, as related to the IHRM practices: it is possible that an organizational practice to be ethical in accordance with the rules of the host country and, at the same time, to be unethical for the home country (Dowling, Festing and Engle 2008, 6). In the above case, the continuation of the specific practice should be decided by measuring the potential long-term effects of the practice for the employees. At the same time, the level at which the rules of the corporate social responsibility statement are violated should be taken into consideration; if a business practice would be in clear opposition with organizational culture and ethical rules, then it should be avoided even if it is aligned with the ethical rules of the host country. Moreover, Briscoe, Schuler and Claus (2008, 137) note that the most important ethical issue regarding the IHRM practices would be the potential differentiation of employment law between the home country and the host country; reference is made to the potential lack of rules regulating child labor or minimum compensation in the host country, a fact that could lead to HRM practices that will be unethical – if being evaluated using the home country’s rules. It is suggested that the relevant international law is taken into consideration for deciding on the IHRM policies used in the particular (host) country. The above view is in accordance with that of Dowling, Festing and Engle (2008), presented above, and leads to the following assumption: in the context of the IHRM the violation of ethics is not always traceable. The intervention of international organizations for preventing such practices may be the most effective measure for ensuring the alignment of business practices with the common ethical and social responsibility rules. At the same time, the following issue should be addressed: the decisions of IHR managers are not always appropriate monitored; in fact, most commonly, these decisions are enforced without primarily be checked as of their alignment with the organizational culture or the national culture – referring to the culture of the host country. From this point of view, an additional ethical issue would exist in the context of IHRM: the alignment of the decisions of IHR managers with the rules of ‘their profession’s code of ethical conduct’ (Jackson, Schuler, Randall and Werner 2008, 29). It is in this context, that the potential violation of the organization’s corporate social responsibility rules, for example those referring to the local communities or the environment, would be evaluated. 4. Conclusion In accordance with the issues discussed above, the IHRM practices used by firms in the international market are not always ethically justified; on the contrary, in many cases they are likely to oppose existing market ethics and standards, even if not always in purpose. The approaches used in the literature regarding the ethical and social responsibility issues related to the IHRM seem to be differentiated, being based on different theoretical basis and setting different priorities. At a first level, it could be stated that IHR managers are independent when having to choose among different IHRM policies; however, in practice this rule can have an important implication: when there is no appropriate mechanism for checking the relevant processes, then the risk for failures is high, especially in markets characterized by economic/ political or social instability. From this point of view also, the alignment of IHRM policies with the market ethics is depended on the local mechanisms of control, which are often non-available or badly organized. On the other hand, relying on the internal mechanisms of control – referring to the organization’s auditing and control mechanisms – for checking the quality of IHRM practices and their alignment with the organizational and the market ethics would be also risky, taking into consideration the fact that the activities included in the IHRM are likely to be quite complex, as highlighted in the literature presented above. Under these terms, the most effective policy for ensuring the alignment of the IHRM practices with the market ethics and the organization’s social responsibility framework would be the following one: the development of a mechanism in each market which will focus solely on the evaluation of HRM practices of organizations of all sizes, as developed in the local and the international market. The improvement of legal rules regulating the specific practices would be also a prerequisite for the successful control of HRM practices, both at national and international level. References Armstrong, Michael. 2006. A handbook of human resource management practice. London: Kogan Page Publishers, 4 Briscoe, Dennis, Schuler, Randall, Claus, Lisbeth. 2008. International Human Resource Management. Oxon: Taylor & Francis, 32, 137 Cornelius, Nelarine. 2001. Human resource management: a managerial perspective. Belmont: Cengage Learning, 216 Dowling, Peter, Festing, Marion, Engle, Allen. 2008. International human resource management: managing people in a multinational context. Belmont: Cengage Learning, 6 Durai, Pravin. 2010. Human Resource Management. New Delhi: Pearson Education India, 649 Jackson, Susan, Schuler, Randall, Werner, Steve. 2008. Managing Human Resources. Belmont: Cengage Learning, 29 Koster, Marco. 2007. Ethics in Human Resource Management. Norderstedt: GRIN Verlag, 5 Perkins, Stephen, Shortland, Susan. 2006. Strategic international human resource management: choices and consequences in multinational people management. London: Kogan Page Publishers, 26 Schuler, Randall, Jackson, Susan. 1999. Strategic human resource management. Oxford: Wiley-Blackwell, 400 Stahl, Gunter, Bjorkman, Ingmar. 2006. Handbook of research in international human resource management. Cheltenham: Edward Elgar Publishing, 68 Appendix Graph 1 – IHRM model (Source: http://www.astonhr.com.cn/eng/images/intro-big.gif) Graph 2 – IHRM management model (Source: http://www.tjitra.com/services/culture/culture/international%20HRM_files/stacks_image_651_1.png) Read More

 

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