Introduction Managing human capital is a complex and tricky business. What you want to do is hire talented people; you don't want to have to fire them; and you certainly do not want to find yourself discriminating against them. Hiring discrimination has been around for decades in North America. Women and minorities have not had opportunities to join desirable institutions for decades. Although this still occurs, it is becoming less prevalent due to laws and regulations at the federal and state levels. Organizations owe it to themselves to hire the best and brightest, and more often than not, they do. Hiring Richard Florida, founder and director of the Software Industry Center at Pittsburgh's Carnegie Mellon University, is beginning to yield compelling theories about what draws talent to certain cities and how companies adapt to win these employees over. According to Florida, location, location, location is the key. Mapping out geography of talent, Florida discovered that the following is important to workers: · Virtual communities just aren't enough - potential employees are seeking places with real assets. · To become talent magnets, cities must have something for everyone. · It's not just about stock options - people want job options. · Diversity is the surest sign that communities and companies really get it. · In a world where time is the only nonrenewable resource, people are seeking companies that conserve time - a place that has all the amenities. Yes, location is important, but don't forget paying the appropriate salaries, outdoing the competition, and taking talented employees seriously. Firing Of all the actions that managers must undertake, firing can be the most difficult. One never knows how an employee will respond to his or her discharge, so it is very important to stay calm and get to the point quickly. Before firing an employee who has been with the company for a number of years, however, it is important to give the employee an opportunity to improve performance deficits. How long depends on company policy. Can you fire an employee for any reason? No. Although the law gives a lot of leeway to employers, there is a limit. If an employee has an employment contract or if promises were made to the employee, then the contract controls when you may fire an employee for "good cause." A few examples of good cause include the following: · poor job performance · low productivity · refusal to follow instructions · habitual tardiness · excessive absences from work · possession of a weapon at work · threats of violence · violating company rules If there is not such contract, you may fire an employee for any reason as long as it is not illegal, such as discrimination, retaliation, alien status, and violations of public policy. Discrimination Discrimination falls into a number of categories: race, gender, sexual orientation, religion, and age. According to the U.S. Department of Justice Civil Rights Division, it recommends th.

1. Introduction
Managing human capital is a complex and tricky business. What
you want to do is hire talented people; you don't want to have to
fire them; and you certainly do not want to find yourself
discriminating against them.
Hiring discrimination has been around for decades in North
America. Women and minorities have not had opportunities to
join desirable institutions for decades. Although this still
occurs, it is becoming less prevalent due to laws and regulations
at the federal and state levels. Organizations owe it to
themselves to hire the best and brightest, and more often than
not, they do.
Hiring
Richard Florida, founder and director of the Software Industry
Center at Pittsburgh's Carnegie Mellon University, is beginning
to yield compelling theories about what draws talent to certain
cities and how companies adapt to win these employees over.
According to Florida, location, location, location is the key.
Mapping out geography of talent, Florida discovered that the
following is important to workers:
· Virtual communities just aren't enough - potential employees
are seeking places with real assets.
· To become talent magnets, cities must have something for
everyone.
· It's not just about stock options - people want job options.
· Diversity is the surest sign that communities and companies
really get it.
· In a world where time is the only nonrenewable resource,
people are seeking companies that conserve time - a place that
has all the amenities.
Yes, location is important, but don't forget paying the
appropriate salaries, outdoing the competition, and taking
talented employees seriously.
Firing

2. Of all the actions that managers must undertake, firing can be
the most difficult. One never knows how an employee will
respond to his or her discharge, so it is very important to stay
calm and get to the point quickly. Before firing an employee
who has been with the company for a number of years, however,
it is important to give the employee an opportunity to improve
performance deficits. How long depends on company policy.
Can you fire an employee for any reason? No. Although the law
gives a lot of leeway to employers, there is a limit. If an
employee has an employment contract or if promises were made
to the employee, then the contract controls when you may fire
an employee for "good cause." A few examples of good cause
include the following:
· poor job performance
· low productivity
· refusal to follow instructions
· habitual tardiness
· excessive absences from work
· possession of a weapon at work
· threats of violence
· violating company rules
If there is not such contract, you may fire an employee for any
reason as long as it is not illegal, such as discrimination,
retaliation, alien status, and violations of public policy.
Discrimination
Discrimination falls into a number of categories: race, gender,
sexual orientation, religion, and age. According to the U.S.
Department of Justice Civil Rights Division, it recommends the
following to avoid employment discrimination especially after
September 11:
· Treat all people the same when announcing a job, taking
applications, offering a job, verifying employment eligibility,
hiring, and firing.
· Allow new hires, both citizens and non-citizens, the
opportunity to present their choice of documents to complete
the INS Employment Eligibility Verification Form I-9.

3. · Do not request new hires to present documents beyond what is
required to complete the Form I-9. All job applicants can
present any combination of acceptable documents.
· Avoid "citizen only" or "green card only" hiring policies.
Unless required by federal, state or local law or by government
contract, such policies are illegal.
There are a number of ethical issues that companies must
address when doing business in an emerging nation. The most
essential of these include the U.S. Foreign Corrupt Practices
Act (FCPA) and understanding host country cultural practices
that may be unethical or illegal here at home. Companies should
also be aware of the various corruption indexes or assessments
of the host country’s business environment and the host
country’s economic, trade, and business practice controls.
From an international business perspective, ethics can be
described as a set of principles and standards that govern the
behavior of firms and individuals within the firms in how they
conduct business, either formally or informally. There are a
large number of ethical issues, or ethical choices, that a firm
encounters when doing business in a host country that may
differ significantly from their home country. The following list
provides examples of some ethical dilemmas faced by visiting
businesses under pressure from the home country or host
country office:
· Engaging in nepotism or keeping poor performers due to
family ties
· Engaging in local discriminatory practices based on local
customs and norms
· Adopting the weaker environmental standards permissible in
the host country than those a firm would be compelled to follow
at home
· Bribing or providing favors for host country leaders to obtain
or keep business
· Exploiting permissible host country laws to sell products that
may be harmful to consumers

4. · Paying very low wages to host country workers because of
local standards or paying no more than a living wage as defined
by the home country ethics
· Engaging in trade that may harm local economic segments,
such as importing cheaper food even if it puts local farmers out
of business
These example issues can be approached from several
perspectives. The first question a business must ask is, is this
legal, ethical, both, or neither? Some firms take a minimalist
view of their responsibility to employ ethical business practices
just to look good to their customers or the general public or to
stay out of trouble. Another approach a firm might take is to
follow an ethical business model of doing what is right,
regardless of the reason or financial burden of conducting
business ethically. A third view is based on an enlightened self-
interest of doing what is ethical because it contributes to long-
term profitability.
From a legal perspective, firms must be aware of the laws
governing corruption and the business practices of nationals in
foreign countries. The United States passed the FCPA in 1977
in response to several high profile cases involving U.S.
companies. The FCPA essentially bans U.S. firms and
individuals from engaging in corrupt acts, such as offering
bribes to officials of other nations to obtain business
concessions; however, it does not prevent small "grease"
payments to local officials for such things as customs clearance,
permits, or other payments demanded by low-level
functionaries. The FCPA has been controversial in that in many
other countries, bribery is not only condoned, but
expected. Until the late 1990s, for example, firms in the
European Union were allowed to write off such bribes as a
business expense. Even now, many countries do not prohibit
bribes, and bribery is routinely practiced.
Emergence of International Business and Legal Models
In the world of globalization, a divergence from the established

5. Western model of business is occurring through the creation of
an international model with principles that are significantly
different. The Western model dominated international business
from World War II through the 1980s and emphasized a more
complex court system, high standards of individual protection,
and control over international trade.
Developing Economies Choosing Civil Law System
As globalization has evolved, the American (Western) model
has become problematic for the emerging economies and
societies such as those of Brazil, Russia, India, and China. In
these developing economies, the American legal model has
largely been cast aside for the more traditional model of the
inquisitorial civil law system. In the inquisitorial court system,
the court plays an active role. On many occasions, the court will
often act not only as the arbiter of the law but also as
prosecutor. Also, the civil court systems tend to focus more on
minimal standards for individual protection such as human
rights rather than the more elevated standards of civil rights,
diversity, or equal rights. The developing economies have
recognized that the expense associated with the American-style
court system would be prohibitive for many countries of the
world and have begun to follow a more streamlined version
based in civil law. The American-style court system is based on
the common law system where a great deal of weight (time and
expense) is given to past court decisions as a guide to form
present-day and future laws.
Regulations Impact on International Business Models
Likewise, business models have begun to move away from
American/Western-style business systems and favor the
international version of business models. One significant
example is seen in the resistance that foreign corporations put
up to the imposition of Sarbanes-Oxley regulations in the wake
of business accounting and financial reporting scandals. These
regulations and others, which were imposed after the events of
9-11, have caused many foreign companies to shift from doing
business in America. Some are locating their facilities in

6. countries such as Mexico and Canada where there are fewer
regulations. Also, as multinational corporations have begun to
rise to dominance in the international business environment, the
emergence of international pay scales as opposed to domestic
pay scales is seen. Multinational companies operate
independently of where their home office is located, and this
has created a greater need for international consensus and
regulations.
Expense as a Driving Force for Change
As globalization continues to evolve, the international
community may embrace these international standards and move
further away from the American/Western standard of legal
systems and court systems. The primary driving force for this
change is expense. As America becomes a primary debtor
nation, it will become increasingly more difficult to persuade
the international community to follow that model when even an
economy as large as the U.S. economy cannot afford the
expense of its model.
Another factor that will be driving this change is the cultural
and historical differences among the countries in the
international community. As individuals progress, it will be
interesting to see exactly how far from the American systems
the international community will move in the future.
International Procedures, Laws, and Documentation for
Merchandisers
A well-known furniture retailer is considering establishing a
store in Dubai, one of the United Arab Emirates. The retailer
eventually hopes to expand from the UAE into the rest of the
Middle East and into Southeast Asia. The legal and regulatory
environment is likely to affect each of the elements of the
retailer’s marketing mix (product, place, pricing, and
promotion).
Product
Import and export controls are determined by the nature of the
product and its classification in the Harmonized Tariff Schedule
used by many countries. Import controls such as tariffs and

7. quotas are determined by the product’s classification, country of
origin, and agreements that the importing country may have
with the exporting country. Export controls are also used to
restrict the export of products critical to a nation’s security,
such as U.S. export controls on products that might have
military applications or essential products that might create
domestic shortages if exported.
Countries may also restrict the content, design, and labeling of
products that are imported through health and safety laws or
laws requiring specific labeling. The United States restricts lead
content in products, especially products used by children, for
example. In some Muslim countries, products containing pork
products are prohibited by law. Some Arabic-speaking countries
require that the label on the product be in Arabic, although this
may be in addition to other languages.
International law also protects Intellectual Property Rights
(IPR) such as trademarks and brand names, copyrighted
material, and patents. However, not all countries are zealous in
their enforcement of these laws, even though as members of the
World Trade Organization, they are subject to its provisions
(Plenty of Blame, 2007). Local laws may also affect a
company’s ability to protect its trademarks or brands
overseas. McDonald’s, for example, lost a case in South Africa
against a hamburger restaurant for trademark
infringement because McDonald’s had not exercised its use of
the brand in that country.
Place and Distribution Channels
Access by foreign businesses is limited in some countries and in
some industries. India, until recently, has restricted the ability
of “big box” retailers, such as Wal-Mart, to establish outlets in
an effort to protect local “mom and pop” retailers. Indian law
allowed investment in only single-brand retail stores, and also
required no less than 49 percent local investment in the venture
(Wonacott, 2007). Dubai requires that companies incorporating
as a limited liability corporation have at least 51 percent local
ownership (Doing Business in the UAE, n.d.).

8. Gray markets are another concern for merchandisers. Gray
market goods are goods which are sold outside of the
manufacturer’s authorized distribution channels. Although they
are “genuine” products, they are not backed by the
manufacturer’s usual guarantees and services, and may have
differences from products sold through the authorized channels,
such as instructions in a foreign language. Such goods may well
undercut the manufacturer’s authorized dealers and harm the
brand’s image, so some manufacturers have brought legal cases
to prohibit the practice. U.S. and Canadian law do not generally
restrict the sale of gray market goods; however, the European
Union bans the importation of gray or parallel market goods
into the EU from non EU countries (Gray Market, n.d.).
As retailers increasingly use the Internet to attract customers
from overseas, they will find their efforts affected by varying
country laws. Dubai, for example, has created an “Internet city”
along with laws regulating e-commerce and cybercrime (Qudah,
n.d.).
Pricing
The European Union has been zealous in enforcing its anti-trust
laws. Such laws are intended to protect the consumer from
conspiracies in restraint of trade, such as those that result in
higher prices from a lack of competition. The European
Commission upheld a 2004 ruling against Microsoft which
required the company to unbundle its media player software and
to provide information on how to interoperate with Windows
servers so that competitors might develop software for which
there is potential consumer demand (A Matter of Sovereignty,
2007).
A retailer’s ability to offer credit terms may also be affected by
local law. In Muslim countries, the charging of interest may be
prohibited by law so that alternative forms of financing or
payment must be sought.
Promotion
China is known for requiring the search engine Google to censor
certain Web sites that it considers “politically sensitive”

9. (Alternative Reality, 2008). In the Arab world, however,
censorship of the Internet and other media is geared heavily
toward images and Web sites considered pornographic. In the
UAE, foreign publications entering the country have offending
images censored with heavy black marker, while the same also
appears on billboards and print media. One clever marketer,
Playtex, made use of this well-known censorship in ads for its
Wonderbra. The black mark in the ad is part of the ad; the size
of the black mark is meant to convey that the bra will increase
the wearer’s size to that extent (Wonderbra, n.d.).
References
Alternative reality. (2008, January 31). The Economist.
A matter of sovereignty. (2007, September 22). The Economist,
pp. 75–76.
Doing business in the UAE. (2008, February 18).
Gray market. (n.d.). Encyclopedia of Business (2nd ed.).
Retrieved from the Encyclopedia of Business Web site:
http://www.referenceforbusiness.com/encyclopedia/Gov-
Inc/Gray-Market.html
Plenty of blame to go around. (2007, September 29). The
Economist, pp. 68–69.
Qudah, S. M. (n.d.). E-business laws and regulation in the UAE.
Wonacott, P. (2007, February 1). Foreign firms find rough
passage to India. The Wall Street Journal, p. A6.
Wonderbra. (n.d). Retrieved from Ads of the World Web site:
http://adsoftheworld.com
Prejudice, Stereotypes, and Discrimination
Thanks to globalization, human beings are able to interact with
people from all racial, ethnic, and cultural backgrounds. Walk
into any organization in any large city in the United States and
ask people about their ethnic or cultural backgrounds and their
answers will likely vary (i.e., organization are composed of
people from all walks of life). Widely used racial labels, such as
white and black provide very little information about a person
beside the color of their skin. Also, ethnic designations, such as
Hispanic or Latino, do not accurately describe an individual

10. because within this label exists a variety of cultures and hidden
personal descriptions. One may more acutely elaborate on the
individual’s country of origin, such as Mexican or Puerto Rican
and even further into ancestry such as Spanish /Mayan or
African / Taíno. The key idea is that labels do not accurately
describe who an individual is and from where the person comes
(geographically, socially, economically, etc.).
Prejudice, Stereotypes, and Discrimination Defined
Although the terms prejudice, stereotypes, and discrimination
do not necessarily denote negativity, in today’s society they
carry negative connotations. Prejudice denotes a prejudgment,
or a decision or judgment that is made before any facts or
evidence has been gathered, observed, and evaluated. For
instance, an individual may have a prejudice toward a certain
type of automobile because it is known that it is expensive,
luxurious, and that it is a preferred brand of wealthy
individuals. A judgment about the car may be made although the
individual has never owned one, knows no one that owns one,
and has never read a number of consumer reports about the car.
In a negative sense, an individual may have made a judgment
about a car that is unfavorable, although little is known about
the car. In this sense, the individual has a prejudice against the
car. Lamentably, people have prejudicial attitudes or beliefs
against people, although they know little or nothing about them.
These beliefs and attitudes against people are generally based
on stereotypes.
The word stereotype denotes a mold that is made to reproduce
shapes or figures that are an exact replica of that mold.
However, people tend to hold stereotypical images or beliefs
about other people based on one mold, although people within a
specific group vary greatly. For instance, a bottle of water has
been purchased at a convenience store has a blue cap and a label
with blue writing, is made of clear plastic, and holds 16 ounces
of water. If a person has only seen or has only been exposed to
one brand of bottled water, the person may belief that all bottles
of water that appear similar are of that one known brand. In

11. reality, there are many brands that fit the above description. A
stereotypical view about people is the same as the bottled water
(i.e., a belief exists that if someone has several similar features
or characteristics as the stereotype, the person must pertain or
belong to this group). Stereotypes exist and are perpetuated
based on dogmatic beliefs or axioms. These are beliefs or
opinions that are taken to be truths and are unchanged even
when evidence exists that contradicts or disproves them. There
are stereotypes that exist based on a number of human traits and
associations, such as race, religion, gender, age, and sexual
orientation.
Discrimination refers to when these prejudiced and stereotypical
beliefs are actually put into action that impedes members of that
stereotyped group from participation in something, such as
eating in a restaurant or living in an apartment complex because
the person is of a specific race, or not being allowed to board a
plane because of a religious affiliation, or not being allowed to
work overtime because of a person’s gender. Luckily, the
United States has federal laws that protect people from
discriminatory practices.
The United States could be considered a very socially sensitive
society. Although Thomas Jefferson is quoted as saying that
“All men are created equal," at the time of this quote, written
with the Declaration of Independence, there were African slaves
in the colonies, and women were not allowed to vote. The 13th
Amendment of the United States Constitution abolished slavery;
the 14th Amendment guaranteed rights to citizens; and the 15th
Amendment prohibited discrimination in voting based on race or
color. Women were not given the right to vote in the United
States until 1920 with the passing of the 19th Amendment.
In 1964, Lyndon B. Johnson signed the Civil Rights Act, which
gave more explicit rights to U.S. citizens. This was largely in
response to discriminatory practices that existed after the
American Civil War (1861–1865) embedded in what were
known as Jim Crow laws, which promoted racial segregation. A
decade before in 1954, the U.S. Supreme Court case Brown v.

12. Board of Education (of Topeka, Kansas) desegregated schools
by overturning the 1896 Supreme Court decision in Plessy v.
Ferguson, which claimed that racial segregation was legal. The
Civil Rights Act of 1964 consists of 10 titles. Perhaps one of
the most important titles regarding the study of organizational
psychology is Title VII, which prohibits discrimination in
employment. In the 1970s, Title VII was amended to prohibit
sexual harassment and discrimination against potential or actual
employees based on age. Critical theorists study social
inequality and the processes and institutions that perpetuate it
(Bourdieu, 1991; Foucault, 1979; Gramsci, 1988). Sadly, the
manipulation of power and the subjugation of minority groups is
inherently a part of the history of the United States. Companies
that do not recognize and further violate employees’ civil rights
are often sued by those whose civil rights were violated for
often large sums of money.
Affirmative Action and Diversity Management Programs
Although social inequalities still exist in the United States and
throughout the world, successful companies embrace diversity
in the workplace. During the 1970s in the United States, as a
result of the Civil Rights Act of 1964, President Lyndon
Johnson's Executive Order 11246 mandated a policy called
affirmative action, which was a strategy for increasing the
representation of women and minorities in areas of employment,
education, and business from which they have been historically
excluded (Fullinwider, 2005). It was a controversial strategy
because in some cases, people who represented the majority
(white) were denied employment although they were more
qualified than others for a position because the company sought
to employ more women and minorities. In this sense, this
practice arguably violated Title VII of the Civil Rights Act.
However, many professions and positions of higher education
were predominately White male and were constantly
reproducing the employment of White males, which made it
challenging to enter the profession as a woman or minority.
When this type of employment reproduction comes almost

13. natural or taken as a given, the practice becomes reflective of
institutional racism and institutional sexism (i.e., it is the way it
is because that is how it has always been). Now, many
professions are seeing greater diversity.
Because of specific policies mentioned early, companies are
employing and embracing their ethnic, cultural, and overall
diversity, including that based on gender, sexual orientation,
age, and religion. Most successful and professional organization
have, or should have, a diversity management program with
an aim to not only recognize and appreciate the diversity
embodied within employees but also to educate those who are
not aware of such diversity and who may hold prejudicial or
stereotypical views of others within the office. Arguably one of
the most important elements of a diversity management program
is to educate employees on recognizing discriminatory practices
and inform them on federal laws, such as the Civil Rights Act,
its titles, and subsequent amendments.
References
Bourdieu, P. (1991). Language and symbolic power (John
Thompson, Ed., Gino Raymond & Matthew Adamson, Trans.).
Oxford: Polity.
Foucault, M. (1979). Discipline and punishment: The birth of
the prison. Harmondsworth: Penguin.
Fullinwider, R. (2005). Affirmative action. Retrieved March 8,
2009, from Stanford Encyclopedia of Philosophy Web site:
http://plato.stanford.edu/entries/affirmative-action
Gramsci, A. (1988). A Gramsci reader: Selected writings 1916–
1953 (David Forgacs, Ed.). London: Lawrence & Wishhart.