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Improving Working Conditions for Multinational Companies - Essay Example

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The purpose of the current essay is to briefly discuss the corporate social responsibility of multinational companies. Furthermore, the essay brings up the issue of ensuring appropriate working conditions. Additionally, the essay examines the activities of the International Labour Organization…
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International Human Resource Management Mini Essay Research Given the value companies attach to good methods of corporate social responsibility, can we now assume that multinational companies will take the initiative to upgrade labour standards in their subsidiaries and trading partners around the world? Alternatively, would pan-national regulation of labour standards (e.g. by the International Labour Organization) ensure greater success in improving working conditions?
Companies, especially multinational companies, participate in corporate social responsibility. This responsibility tasks the companies to comply with the spirit of the law, international and ethical standards (Joseph, 2001, p121). Multinational companies often integrate corporate social responsibility into their business model, which regulates the actions of the firm. In short, corporate social responsibility guides a corporation in having a positive impact in all its activities. This impact is based on how the company treats the environment, its consumers, its employees, stakeholders, communities and other members of society. Through corporate social responsibility, companies develop and promote their principles and standards. These principles and standards are for both the internal and external actors.
The International Labour Organization (ILO) considers corporate social responsibility as a company’s contribution to promoting decent work agendas to its employees. This principle is central in ILO’s efforts of promoting progress in the economic and social realms (Deakins, 1995, p214). The ILO has set standards for CSR policies, which guide companies in developing their principles
Several incidences concerning the violation of working conditions among multinational companies prompted the ILO to promote the improvement of employees working conditions (Sengenberger, 2006, p32). The Bangladesh incident in 2013 resulted in heated discussions concerning the labour standards among workers of multinational companies. This is not the first case where multinational companies have provided poor working conditions for their employees. In the past China and Vietnam have had similar cases, where multinational companies provided sub-standard labour conditions for their employees.
The ILO popularized Corporate Social Responsibility as a way of improving the labour standards of multinational companies (Sachdev, 2011, p121). To ensure minimum labour standards are met in international trade, the ILO has integrated a social clause in all trade agreements. However, developing countries oppose this clause despite its aim in protecting workers’ rights. Corporate Social Responsibility by corporations supports the ILO’s agenda of improving the working conditions of employees (Joseph, 2001, p123).
International trade thrives on the extortion of low-wage countries such as China, which increases the profit margins of corporations (Sengenberger, 2006, p13). The ILO, through the promotion of equal wages and standard working conditions, seeks to eliminate this violation of human rights. The International Labour Organization has put in place various principles that all its member states abide to. They include the Fundamental Principles and Rights at Work that seeks to eliminate child labour, improve the core labour standards established in eight ILO conventions and the elimination of forced labour (ILO). All corporations that operate internationally, through their individual CSR, should abide by these recognized labour rights.
There are, however, several recommendations to the ILO principles. For example, governments should be aware of all the benefits that accompany free trade and the observation of active labour policies (Sengenberger, 2006, p17). These labour policies, in a country, promote labour mobility and sustainable development in the nation. The ILO should simplify the procedures used in the monitoring of labour standards in countries and corporations. These simplifications assist in the formation of labour unions as in the case of China, in 2010. The labour unions simplify the ILO’s task of monitoring labour standards of China; a country involved in past labour practice violations.
Other international bodies that support the ILO’s role in promoting better working conditions for workers is the European Union. In the EU’s bilateral trade, the fundamental rights of workers are taken into account. The GSP (Generalized Scheme of Preferences) implemented by the EU, enables this organization to encourage its member states to respect worker’s fundamental rights. Through this scheme, EU grants additional tariff to those member states that respect workers’ rights and abide by the international conventions of workers’ rights.
Bibliography
Deakin, S. (1995). `A new consensus? Labour standards and economic progress’, International Review of Applied Economics, 9 (2): 212-16.
International Labour Organisation, Declaration on Fundamental Principles and Rights at Work, www.ilo.org.
Joseph, E. (2001). ‘Corporate social responsibility: Delivering the new agenda’, New Economy, 8 (2): 121-3.
Sachdev, S. (2011) ‘International corporate social responsibility and HRM’, in T. Edwards & C. Rees (eds.) International Human Resource Management: Globalization, National Systems and Multinational Companies, Harlow: Financial Times Prentice Hall.
Sengenberger, W. (2006) ‘The role of international labour standards for governing the internationalization of employment’, in P. Auer, G. Besse& D. Méda (eds.) (2006) Offshoring and the Internationalisation of Employment: a Challenge for a Fair Globalisation?, http://www.ilo.org/public/english/bureau/inst/download/annecy06.pdf. Read More
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