This case study examines the ethics and human resource practices of Aditya Birla Group (ABG), a large Indian multinational conglomerate. ABG has transformed its local, loyalty-based hiring practices into a merit-based, professional culture to compete globally. The company emphasizes its values framework to attract and retain employees. ABG has successfully fused Indian and Western concepts, prioritizing merit over loyalty and shifting from personality-focused to process-focused management. It also strives to develop location-specific HR policies to address challenges of its growing international scale and diversity.

1. Ethics And Human Resource
Management And Development In A
Global Context:
Case Study Of An Indian Multinational
by
Mr. Mohan Thite

2. Introduction:
• This article is a case study of a large Indian multinational conglomerate, which
shows us that how this firm is successfully transforming its local business
practices based on kith-and-kin policy’ of loyalty-based employment to a
merit- based professional culture to compete in the contemporary global
economy.
• Regarding the importance of the ethics, the author says that now-a-days
Ethical Reputation is considered as one of the key elements of a firm's ability
to attract and retain the employees.
• To attain such position in the market HR Professionals need to play a key role
in institutionalizing ethical culture into the organizational fabric by taking
steps such as whistle blowing mechanisms, ethics related decision making
process, and by establishing standard disciplinary procedures, etc
• A firm’s orientation to ethics is influenced largely by its national and its
own culture.

3. Business Ethics in India:
• Ethics is an integral part of culture.
• Personal integrity play a crucial role in the way people and firms conduct
their business (Christie et al. 2003).
• Accordingly, what is regarded as ethical in one part of the world may be
regarded differently in another part of the world. (Christie et al. 2003)
• India has had a long tradition of ethical norms underpinned by the Hindu
concept of dharma (righteousness) that stands for societal stability, order
and wellbeing (Narasimhan, Bhaskar, and Prakhya 2010; Rajeev 2007).
• On several indicators of corporate governance environment, rule of law and
enforcement, India ranks low (Kimber and Lipton 2005).

4. HR Ethics In India:
• ‘The notion of the firm as a community of interests for its key operational
stakeholders, its managers and its employees has had a long history in India
(Kimber and Lipton, 2005)
• Indian managers are seen to experience greater ethical tension between their
personal values and work values (Fisher, Shirole, and Bhupatkar 2001)
• Contrast the American management style with that of major Indian firms and
show how they achieve business success (Cappelli et al. 2010)

5. Research methodology:
• The study reported here follows a ‘thick descriptive case study’
approach through in depth interviews
• A total of 19 in-depth interviews

6. Aditya Birla Group (ABG)

7. Organizational Profile:
• Aditya Biral Group: A well known Indian Multinational conglomerate.
It was founded in 1857.
Today, the ABG is a Global Fortune 500 Corporation
• Operation: 36 Countries and across 6 continents
• Employees: 140,000 worldwide of42 different nationalities
• Business: $48.3 billion corporation -- Over 60% of its
revenues flow from its overseas operations
• Sectors: Metals, Powerhouse and the world’s leading producer
of Aluminum, copper, and, insulators and cement
• Number of companies: 38 -- Over 130 state-of-the-art manufacturing units
• The current Chairman Kumar Mangalam Birla, is credited with his aggressive global
expansion strategies and also for transforming the organizational culture from its
traditional ‘kith-and-kin policy’ of loyalty-based employment to a merit- based
professional culture (Som 2010).
• Significantly, he has continued the family tradition of giving 3% of net profits to
charity (CNN 2011).

8. ABG is operating in 36 Countries
across 6 continents

9. Short Video Clip about ABG
• https://www.youtube.com/watch?v=6SidbYKb
3t4&list=PLESJrHbaAIIi0TygDC1-
j7p0NMzKZGnfy&index=2&t=0s

10. Corporate Values Framework:
According to Mr. Kumar Birla, Chairman of ABG:
• The management of a multinational company should be able to explain its
values to the employees because organizational culture is a derivative of its
value systems.
• Organization's philosophy, its value system, and a way of doing its business
. . . are the practices which makes an organization distinctive.
• ‘. . . the means are as important as the end, which is a framework that is very
strongly provided in our value articulation’
• From HR point of view, he added that ‘in a globalised corporation, today
an employee would want to join a company for its value systems that it
stands for, for its working philosophy, for its way of growing individuals
(and) incubating talent’.

11. HR Philosophy And Policies:
• Global HR Head of ABG says that it is our philosophy to establish a very
strong employer brand worldwide through focus on values framework
which help to glue the organization together.
• At global level, ABG has a practice of retaining management team after
an acquisition. This process of acquisition is so smooth and caring that is
always appreciated by the employees and they considered Indian
Management far more caring and benevolent.
• Indian cultural roots of ABG resonate well with the local culture at its
subsidiaries operating in other South Asian Countries. As explained by a
Thai HR Manager ‘---. Indian bosses know more about us and our
family than European and American. (To avoid work family conflict)
• ABG is showing a successful fusion of Indian and Western concepts and
ideologies where merit is becoming superior to loyalty and obedience and
which is also shifting from managing through personalities to
managing through processes and systems.

12. HR Roles And Challenges:
• Group HRD personnel recognize that the Group faces many challenges as it
becomes more and more international such as lack of global mindset, lack
of managerial diversity, developing location specific HR policies and
practices, work-life balance.
However, they said that they are learning from these experiences and trying
to make it better. This view was neatly summed by the Global HR Head:
• As you become bigger, more diverse, more global, at every stage (HR)
evolution will continue from one form to the other. -------------, in ABG it
has moved to process and systems dependence from individual dependence
------------.

13. Discussion:
• With a fusion of Eastern philosophy to business and Western professional
work environment based on meritocracy ABG has successfully adopted to
the global business environment which is evident through the fact that 60%
turnover comes from its overseas business.
• HR can play a vital role in embedding ethics into organizational
philosophy, policies and procedures.
• The case study also illustrates the importance of cross - cultural
sensitiveness for Western firms wanting to enter emerging markets.

14. Discussion:
• ABG’s practice to retain the management team after an overseas acquisition
is in sharp contrast to the practice in certain Western multinational firms
and suggests that there is an urgent need for cross-national transfer of best
management practices in a multi-polar world.
• Similarly, multinational firms from emerging economies need to develop a
global mindset in decision making and global staffing and increasing
professionalism to become true global players.
• Managers interviews express the intent of the strategy but whether and how
it tranlates into practice can only be tested by incorporating employee voice
into such studies.

15. Thank you!
I hope you find it useful!