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Professor Wendy Turgeon
Ethics in Management CEX 520
21st July 2014
Human Rights and Global Labor Practices- Denis Arnold
What issue(s) does the author reflect upon?
I have chosen Denis Arnold’s essay “Human Rights and Labor Practices” for this paper (Hartman, Pg. 429-437). It is a very comprehensive article about the obligations of corporations to abide by the human rights of their employees and indigenous people throughout the developing nations of the world. In this article, the writer has highlighted the function of Multinational Enterprises (MNEs) to make sure that labor conditions in their home and host countries are fulfilled in the right way. Violation of human rights of employees of suppliers and even some MNEs located in third countries has always been a subject of debate for business managers.
The author cites references from United Nation’s charter reflecting upon basic human rights such as freedom and wellbeing of an individual. He has described what it means to enjoy freedom as a human being and how this can be applied to workplace practices. According to the author:
“A right to freedom means that a person is enabled to achieve his goals/dreams with the interference from others.” (Hartman, Pg. 431)
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This means that an employee is free to engage in activities that s/he wishes to choose if s/he is not working. But freedom comes with certain restrictions as required by law. Legitimate restrictions are placed to monitor the behavior of an individual and enterprise so that both entities engage in a responsible behavior. The second important point highlighted in the article is about wellbeing. These are the conditions deemed important for a person to act autonomously. Basic goods are one of the most important components of wellbeing. Basic goods are the fundamental physical and psychological capabilities necessary for human functioning like food, shelter and safety. (Hartman, Pg.433-434).
After describing the concepts of freedom and wellbeing and their need as a basic human right, the author puts these two to the workplace and labor practices. He explores in details how the welfare of employees can be made sure by an organization and how companies are responsible to abide by the laws not only in their home countries, but also outside the boundaries of their native lands. He has given references from the work of other researchers, business managers and anthropologists, who conducted cross cultural studies and linked employment practices to the United Nations charter of Human rights. The author concludes this article by stating that organizations that respect human rights and wellbeing of their employees have high employee loyalty and retention rates, high productivity, less lawsuits and higher profit margins.
What conclusions does s/he draw?
According to the author, the duties and obligations of corporations to follow universal laws does not end outside the boundaries of their home countries. If MNEs follow the basic laws strictly, they will see prosperity and on-going success in their business. In developing nations labor laws are not so strong as in developed nations and therefore most of the times organizations only barely meet minimum legislation in order to cut costs and achieve higher profit margins. MNEs
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play a vital role in providing employment to millions in developing nations. If these organizations demonstrate a respect for the rights of workers, they can influence local governments, can change cultural practices and improve the quality of life for their workers, thus indirectly fulfilling the ‘wellbeing principle’.
The author emphasizes the duties and obligations of multinational managers to make sure that the basic human rights of employees are met in both home and host countries. This can be done only if the managers and leaders of the corporations use the power vested in them through their position and titles and the vast resources available to them. Their influence on local norms governing labor practices is huge. The protection of the fundamental human rights and well being of the employees can also be achieved if managers and business leaders make sure that employment practices are such which don’t violate laws even if these laws are nonexistent or weak in host countries.
As more people in the developing nations are pursuing employment opportunities in formal MNEs, which they view as desirable employers, these organizations play a significant part in improving the quality of life for indigenous people and hence the less burden is placed on the native informal sector like agriculture. When burden is shifted from informal to formal sector, the quality of life and standard of living for employees in both sectors increase and hence the overall social welfare of a society goes up.
To what extent has the author persuaded you to agree? What problems or questions can you see?
I agree with the author on most of the points. The presence and activities of multinationals in developing nations have a huge impact on development, politics and economics and to some extent on culture too. Before I move on further, I would like to give some examples that how
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some organizations totally ignored human rights and labor practices in their global functions, while others still followed.
The Rana Plaza factory in Savar (Bangladesh) is a hub for manufacturing clothing for U.S. Canadian and European retailers and designers. In 2013, the majority of the workers employed in this building were young women age between 18 to 20 years. Their average shift was 14.5 hours a day with only two days off a month. They were paid according to their pay tier, which ranged between $10.56/week to $12.48/week. Overall, there were some 3,600 workers that used to work in five different floors inside the plaza. On April 24, 2013 the workers were forced to go inside the building despite their resistance. Power outage and load shedding are the part and parcel of South Asian countries. When the electricity went out, generators kicked in and soon after that a loud explosion was heard and the building collapsed. 1,137 people were reported to be dead and after more than a year, 200 workers are still missing. The majority of the dead workers were young women1.
My question here is, could these deaths be prevented if the manufacturers followed at least the same basic work standards in Bangladesh as their home countries? Another vexed question is in the absence of local government interest to protect human rights and implement labor laws, should MNEs be held responsible for violations of human rights in their employment practices or MNEs responsibility is indirect?
I agree with the author’s idea and below are the examples to support his statement.
“Morally innovative MNEs and their suppliers can be expected to enjoy the most productive and loyal indigenous work force” (Hartman, Pg. 436)
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Quintiles a U.S. based healthcare/services company, has been named as one of the top 25 best places to work in Mexico and Spain2. The company believes in a culture of fairness and respect for all employees. Its inclusion program is very effective and the managers make sure that their employees’ working conditions are safe, they are treated well, receive fair market pay and their basic rights as human beings first are met. The company is constantly setting new innovate standards to improve the quality of life for its workers in developing nations by providing them with work life benefit programs, social events, competitive salary and safe work environment3. Another example of a multinational that unconditionally supports human rights and has its standards based on the United Nation’s Declaration of Human Rights is HP (Hewlett Packard). HP has played a significant part in promoting the mission of Business Leader Initiatives on Human Rights. Because of its employment practices, HP’s workforce in Asia Pacific and Japan increased from 33.7% to 34.2% in one year (2007-2008)4.
The idea that I don’t find quite feasible in this article is the responsibility of multinational corporations to bring about a cultural change in other societies. If they abide by their corporate ethics, company philosophy and adhere to government rules of other countries, it is a good thing, but I wouldn’t expect my organization to drastically change people’s mindsets. For e.g. An MNC no matter how much it tries to promote equality in hiring practices, cannot push Saudi Arabian society to lift a ban on women working. The following questions pester me:
To what extent MNEs operating in other countries is safe from accusations of protectionism of human rights like LGBT’s in their labor practices in cultures like Russia and Islamic world?
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Should there be a penalty from the parent country to penalize organizations engaged in inhumanitarian behavior and violation of human rights in their labor practices in developing countries?
Labor is cheap in third world countries and the companies can churn out more profits due to euro/dollar and local currency depreciation, lack of interest from local governments to push labor laws and human rights. Latin America and South Asia have always been an attractive hub to provide cheap labor to international employers. Aljazeera reported that last week, Bolivia became the first country in Latin America to legalize child labor and kids as young as 10 years old can now work5. The ethical dilemma for MNEs that I see from this news is whether they should employ children in their factories in Bolivia or not? Because if they hire children, they will get paid and ultimately the standard of living for such families will increase with more members working according to the ‘wellbeing’ principle as the author mentioned in this article. But what about the consumer groups in home countries, who vehemently oppose child labor and what about the anticipated boycott of such products?
Adopting fair labor practices and promoting human rights is the key to success in the long run for MNEs. The corporations should make sure that all their entities, sister companies, suppliers, franchisee and licensee adhere to the basic codes of conduct, which include healthy and safe working conditions, fair wages and work hours, freedom of lawful and peaceful associations, no discrimination other than bona fide occupational qualification, no child labor, no forced employment and a fair and quick disciplinary system. This conduct of MNEs not only fulfills the freedom and wellbeing concept as highlighted in this article, but also produces a loyal and satisfied indigenous work force, ultimately making an organization profitable in the long run.
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1. Factory Collapse in Bangladesh (www.globallabourrights.org)
2. The 25 Best Multinational Companies to Work for (Business Insider)
By: Rogers, Abby.
3. Sign In With (Quintiles named as one of the World's Best Multinational Workplaces)
4. Human rights and labor practices (HP Global Citizenship Report: Human rights and labor practices)
5. Bolivia makes child labor legal from age 10 | Al Jazeera America (Bolivia makes child labor legal from age 10 | Al Jazeera America)