Contemporary Issues in Management Essay
Coursework Header Sheet 179236-102 Course Coursework Tutor BUSI1475: Contemporary Issues in Mngt Essay G Symon Course School/Level Assessment Weight Submission Deadline BU/UG 50. 00% 01/04/2011 Coursework is receipted on the understanding that it is the student’s own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University’s Regulations regarding Cheating and Plagiarism.
Tutor’s comments As agreed with Dr Symon Grade For Office Use Only__________ Awarded___________ Moderation required: yes/no Tutor______________________ Final Grade_________ Date _______________ The considerations of going global and operating in countries that sanction the use of child labour. Introduction As a rule child labour is typically defined as the abuse of children within a work environment (Payne, 2006). According to Payne (2006) child labour can be recognised in numerous countries around the world.
In 2006 a report produced by the International Labor Organisation (ILO) proclaimed that there were an estimated 166 million children between the ages of 5 and 14 years who were categorised as child workers (Dinopoulos & Zhao, 2007). Payne (2006) asserts that there are several motives surrounding the reason why children work, with one of the main reasons being poverty. However it is assumed that parents would only expect their children to work in order to support the family financially (Luetge, 2005). Subsequently, Dinopoulos and Zhao (2007) state that child labour is mainly deemed to be unacceptable.
In many incidences this is due to the unhealthy and hazardous conditions that the children are forced to work in (Dinopoulos & Zhao, 2007). Additionally and just as importantly the obvious obstruction of a child? s path to an education could be viewed as an unacceptable factor of child labour (Dinopoulos & Zhao, 2007). Luetge (2005) views child labour from an economic standpoint, stating that as organisations can afford to exchange child workers with adult workers, most well developed countries now regard child labour as unnecessary.
Through the use of customer boycotts and the introduction of international labour standards to decrease employment opportunities, it can be viewed that attempts have been made to cease the use of child workers (Edmonds & Pavcnik, 2005). However there is principally nothing to position the eradication of the use of child workers in and around the world (Edmonds & Pavcnik, 2005). With this subject in mind, this essay will seek to look at the concerns that managers need to consider when going global and manufacturing in countries that sanction the use of child labour.
This essay will firstly evaluate what impact globalisation has on poorer societies and whether this strategy has a negative or positive influence on the occurrence of child labour. Following on from this, the essay will assess if the use of child labour is in fact ethical and moral by using the utilitarist, relativist and imperialist perspectives. After examining if child labour can be viewed as ethical, this essay will look towards evaluating to what level a corporation should be held socially responsible.
Finally, this essay will consider the cultural differences that need to be taken into account when operating multi nationally. Globalisation If an organisation elects to take the business global, there are several issues that need to be considered. For example, when operating in a country that sanctions the use of child labour, will the company have an impact on increasing or decreasing the incidence of child labour (Sethi, 2006)? According to Page 2 Date 15. 04. 11 Submitted with Extenuating Circumstances
Dinopoulos and Zhao (2007) there is a substantial amount of literature surrounding the topics of economics and child labour. However there is only a limited amount of literature that links child labour directly to globalisation (Dinopoulos & Zhao, 2007). Subsequently, there has been much debate in regards to globalisation and its effects on developing countries (Kis-Katos, 2007). More specifically questions can be raised into whether globalisation increases or decreases the incidence of child labour (Kis-Katos, 2007).
According to Mullins (2007) globalisation is defined as the integration of organisations that trade and contend in a worldwide economy. It has been supposed by Meyer (2000) cited Clegg et al (2008) that employees benefit from organisations going global. A strong argument has been put forward that globalisation leads to the creation of wealth and prosperity among the participating nations (Sethi, 2006). Additionally, many economists consider that increases in trade can have an influential impact into eliminating child labour (Kis-Katos, 2007).
Following on from this, Edmonds and Pavcnik (2005) state that globalisation generates a greater demand for adult labour in the participating countries and can increase families? salaries in a way that decreases the incidence of child labour. As outlined by Dinopoulos and Zhao (2007) children mainly work to aid and support their families who are living in impoverished conditions. With this in mind, Bratton and Gold (2007) propose that through globalisation society? s benefit from higher living standards and the eradication of poverty.
Although there may be positive aspects of globalisation, many academics have put forward the argument that globalisation has negative outcomes for the participating societies. In contrast to the beliefs of Edmonds and Pavcnik (2005), Timlon (2011) states that globalisation increases the incidence of child labour, by raising the demands for goods produced by children. Sethi (2006) concurs with this view and states that companies maximise their revenues and make use of cheap, unskilled and abundant labour, often in the form of children.
Following on from this, it is believed that poorer countries have to also struggle with environmental poverty through heightened industrial activity and a lack of sufficient resources as a result of globalisation (Sethi, 2006). Overall, globalisation is said to have a negative impact on poorer societies, through increased poverty, crime and the alienation of local businesses and trade (Clegg et al, 2008). Ethics After assessing the issues surrounding globalisation and its effects on the incidence of child labour, it is imperative to decide if he use of child labour is in fact unethical and immoral. According to Bratton and Gold (2007) ethics can be defined as the moral codes and principles that direct the behaviour of groups or individuals in regards to what is right or wrong. Throughout literature there has been much debate surrounding the area of ethics and child labour (French & Wokutch, 2005). Subsequently, many people have judged child labour to be an infringement of children? s rights and Page 3 Date 15. 04. 11 Submitted with Extenuating Circumstances believe that it is morally wrong (French & Wokutch, 2005).
As a consequence child labour has progressed to be one of the leading topics in the area of international business ethics (French & Wokutch, 2005). As stated by Luetge (2005) although the structure of society has been transformed over the years, ethical concepts have remained the same. Therefore despite the disputes over the ethics of child labour, it is still imperative to apply concepts to consider what is ethically right or wrong (Buller et al, 2000). To distinguish whether the use of child labour can be viewed as ethical and moral the utilitarist, relativist and the imperialist views of ethics will be assessed.
The Kantian view of utilitarianism is based around reason, intention and duty (Carrigan et al, 2005). It is supposed by Kant that businesses should exist to fulfil the needs of society and organisations have an ethical responsibility to deliver benefits back to the public (Carrigan et al, 2005; Zekos, 2004). With this view in mind, it could be perceived that organisations are acting ethically as they are providing poorer societies with much needed employment. John Stuart Mill? s view of ethics is also categorised under the term of utilitarianism (Carrigan et al, 2005).
This concept looks towards the greatest good for the greatest number, by increasing pleasure and decreasing the total amount of pain (Carrigan et al, 2005; Luetge, 2005). Therefore if the use of child workers means that the most people are receiving the most happiness, then this act can be viewed as ethically correct (Mullins, 2007). When looking at the relativist standpoint it can be viewed that ethics are based around the social norms of the society that they are exercised in (Carrigan et al, 2005). According to Galbreath (2006) there are no sets of worldwide ethical tandards and there can be numerous interpretations of ethical beliefs and moral norms. As stated by Edmonds and Pavcnik (2005) and Payne (2006) the use of child labour in many poorer countries is seen as necessary and ethical. However if an organisation does choose to look at child labour from a relativist viewpoint, they need to be aware that many people within the wealthier societies disapprove of this behaviour and in turn they can feel that the use of child labour is unethical (Luetge, 2005). These beliefs are generated because it is assumed that organisations can afford to exchange child labour with adult labour (Mullins, 2007).
As a consequence of this, people from wealthier countries can afford to stop purchasing goods made by children and boycott companies that sanction the use of child labour (Nielsen, 2005). According to Buller et al (2000) imperialism is when the host country? s ethical values and norms are applied to every country the company operates in. As it is wrong to even contemplate the use of child labour in the production of goods in many well developed countries, such as the UK, the host country would be seen to be operating unethically, if they were to sanction the use of child labour under the imperialistic stance (French , 2005).
Page 4 Date 15. 04. 11 Submitted with Extenuating Circumstances Corporate Social Responsibility (CSR) After evaluating the ethics of child labour using the utilitarianist, relativist and imperialist perspectives, it is crucial to understand to what length a company is socially responsible and to whom it is actually responsible for (Kanji & Chopra, 2010). Corporate social responsibility is a vital corporate notion and in a world of heighten globalisation can be located among many large organisations within many countries throughout the world (Welford, 2005).
According to Holmes and Watts (2000) cited Barrett (2009) CSR is defined as an obligation made by an organisation to act ethically to improve the economy alongside the quality of family life and society as a whole. Additionally, CSR means that organisations must concentrate on maximising profits, obeying the law and being aware of the ethics and customs of the individual societies (Demacarty, 2009). According to Kanji and Chopra (2010) CSR is also identified as; corporate responsibility, corporate performance, corporate citizenship and sustainable responsible business.
As outlined by Kanji and Chopra (2010) CSR can be seen to have many benefits for organisations and is now considered to be a crucial instrument in promoting and enhancing the public image of some of the world? s leading organisations. Following on from this, Carbone (2008) states that by organisations displaying their corporate social responsibilities they can build up a good reputation and obtain loyal customers. In agreement Kanji and Chopra (2010) believe that by building a culture based on ethical values and shared beliefs organisations generate a loyal base of customers.
However despite these benefits it is important to recognise to what limit individual organisations should be held socially responsible (Kanji & Chopra, 2010). Furthermore, stronger and clearer roles and responsibilities need to be established for global organisations in relation to developing countries around the world (Payne, 2006). There are several issues surrounding the area of CSR and corporations individual responsibility (Clegg et al, 2008).
In line with traditional views, the neo-classical economist Friedman states that the only responsibility a company has to its stakeholders is to avoid harm (Alzola, 2008). Accordingly, Friedman goes on to say that the firm should have no part in aiding or helping any other party, as the corporation owes society nothing (Alzola, 2008; Clegg et al, 2008). Additional to this, followers of Friedman express that the firm? s only aim should be to make profit for its owners and only pay attention to their shareholders (French, 2007; Palmer & Hartley, 2006).
When looking at the traditional view of CSR and child labour, it could be supposed that as long as the children are coming to no harm the organisation is upholding its social responsibility. In a more contemporary and humanist view, Tonn (2008) argues that CSR should include factors such as; ethics, environmental issues, corporate governance and employee and product safety. In line with this Kanji and Chopra (2010) declare that CSR should concern itself with; fair trading and giving back Page 5 Date 15. 04. 11 Submitted with Extenuating Circumstances o the community, as well as safeguarding and sustaining the global environment. Overall, with the concerns of globalisation and its effects on poorer societies, organisations must show that they are acting responsibly and are accountable to all of their stakeholders including child workers (Payne, 2006). Echoing this belief, Mullins (2007) goes on to state that in order for organisations to satisfy their goals and sustain profit they need to consider their external environment. It has been proposed that organisations inadvertently have an effect on the quality of life and the wellbeing of society (Mullins, 2007).
As a result of this, businesses have an economic responsibility to all of their stakeholders including; investors, employees and customers (Kanji & Chopra, 2010). Cultural Differences If a company does decide to operate in a country that sanctions the use of child labour, it is still vital to look at the cultural differences within that society to ensure that the workforce culture is understood and workers are managed effectively (Banfield & Kay, 2008). Culture can be best explained as the divided beliefs, principles and understandings that determine one group from another (Banfield & Kay, 2008).
Schein (1997) cited Clegg et al (2008) define organisational culture as the basic principles and norms that are shared by the company? s affiliates. According to Palmer and Hartley (2006) organisational cultural values are a combination of factors such as: how work is planned and practiced; how authority is distributed; how people are compensated and managed and the roles and expectations of employees and employers. Additionally, national culture is the referral of one nation? s features to another (Capon, 2004).
According to Pitta et al (1999) it is essential for managers to understand the ethics of the cultures when operating and managing in unfamiliar societies. Janssen (2007) cited Timlon (2011) states that managers need to take into account factors such as; the law, families, religious beliefs, cultural influences and national culture overall. Additional to these beliefs, Adler (1983) proposes that managers need to be aware of the differences across cultures. These aspects can include; concern for time, displays of emotion and an inability to cope with uncertainty (Alder, 1983).
A continuation of this view was generated by Hofstede, who formulated and identified five different dimensions of culture (Mullins, 2007). The five dimensions are; power distance, uncertainty avoidance, individualism/ collectivism, masculinity and long term verses short term orientation (Mullins, 2007). As outlined by Ararat (2008) power distance is defined as the level in which power is distributed. For example, people within a high power distance culture will accept that power is unequally distributed (Ararat, 2008).
Additional to this, individualism focuses on the proposition that individuals are self-orientated (Moorij & Hofstede, 2010). Whilst collectivism interests itself with people who are mindful of others and care for their team in an exchange for loyalty (Moorij & Hofstede, 2010). Following on from this, masculinity concerns itself with principles such as performance and accomplishment and femininity looks at ideas such as the value of life (Moorij & Page 6 Date 15. 04. 11 Submitted with Extenuating Circumstances Hofstede, 2010). According to Migliore (2011) uncertainty avoidance is defined as people? s adverse feelings to change.
For example, within a high uncertainty avoidance culture there will be a large preference towards formality and rigid structures (Migliore, 2011). Finally, long term verses short term orientation looks at the level of future orientation of the culture and their fondness for tradition and short term points of view (Moorij & Hofstede, 2010). Being aware of cultural differences can have positive effects on organisations, as it allows for the effective management of diverse employees (French, 2007). According to Rosenblatt (2011) if cultural differences are managed correctly organisations can obtain a competitive advantage over their opponents.
Furthermore, through globalisation and cultural awareness, multinational organisations (MNOs) have been able to incorporate various value systems and develop shared global work ethics to produce an environment where employees are able to connect and organise their activities in order to meet the aims and objectives (Erez & Drori, 2009 cited Rosenblatt, 2011). Finally, Pitta et al (1999) believes that by appreciating the cultural deviations, westernised organisations are able to forecast what worldwide stakeholders expect.
If companies choose to ignore the cultural differences of the different societies then this could have a negative impact on the organisation (Pitta et al, 1999). It has been articulated by Pitta et al (1999) that conflict can occur if companies do not understand and respect the cultural differences of the participating countries. Furthermore, Migliore (2011) expresses that the lack of knowledge and understanding for individual and group social norms can have a detrimental effect on performance levels. Ultimately, if cultural factors and differences are not onsidered, this can lead to the failure of an organisation (Pitta et al, 1999). Recommendations When looking to make recommendations to managers it is important that they are aware of the positive and negative effects that globalisation can have on poorer societies and the incidence of child labour. According to Sethi (2006) organisations need to ensure they maintain the internal and external environments of societies. It could be supposed that by taking these concerns into account, organisations can reduce the negative effects that globalisation has on poorer societies.
From viewing the evidence consolidated in this essay, a strong argument has emerged that even if companies are acting ethically by condoning the use of child labour, wealthier countries will still disapprove of these acts (Luetge, 2005). This is turn can have negative impacts on organisations (Nielsen, 2005). In regards to CSR, recommendations could be made for CSR to include all stakeholders in all of the operating countries. Carbone (2008) states that CSR can aid the organisation? s reputation and can help Page 7 Date 15. 04. 11 Submitted with Extenuating Circumstances to build a loyal base of customers.
Subsequently, CSR has been seen to have positive effects on poorer societies through the reduction of poverty, child labour and environmental pollution (Payne, 2006). According to Timlon (2011) managers need to take many factors into account when managing across different cultures. It could be recommended to managers that in order to manage effectively and succeed they need to understand and respect cultural differences (French, 2007). To accomplish this, managers could apply Hofstede? s five dimensions of culture to identify the cultural preferences and differences across the operating countries.
Conclusion In conclusion this essay has assessed the aspects that need to be considered when going global and operating in countries that sanction the use of child labour. This essay discussed the key arguments surrounding the topics of globalisation and child labour. It was discovered that there were contradictory views on whether globalisation increases or decreases the incidence of child labour. Following on from this, the essay examined if child labour could be deemed to be ethical and moral using the utilitarianism, relativism and imperialism perspectives. Although the rguments are not clear cut, modern wealthier societies would have us believe that any use of child labour is unethical and unnecessary (French & Wokutch, 2005; Luetge, 2005). This essay also deliberated to what level a company should be held socially responsible and who should be covered by CSR. It could be believed that organisations CSR should include all stakeholders, and go beyond the traditional perspectives, by looking to safeguard and improve employee? s well-being as well as the global environment. Furthermore, this essay also considered the implications of managing across cultures.
It was proposed that managers need to be aware of the differences across cultures (Adler, 1983). One way of identifying these differences, is by using Hofstede? s theory on the dimensions of culture (Mullins, 2007). Finally, this essay offered recommendations that managers could use when looking to go global in countries that sanction the use of child labour. Page 8 Date 15. 04. 11 Submitted with Extenuating Circumstances References Adler, N. (1983), “Cross-cultural management research: the ostrich and the trend”, Academy of Management Review, Vol. 8 No. 2, p226-32 Alzola.
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For completion by Week 5 Must be signed-off by seminar tutor Must be completed electronically Revised question: The considerations of going global and operating in countries that sanction the use of child labour. Original question: The considerations of manufacturing in countries that sanction the use of child labour. The assignment will look at defining the ethical considerations that need to be looked at before operating in countries that sanction the use of sweat shops and child labour. A debate will be made between the ethical theories of what is deemed to be ethically right or wrong and provide justifications.
For example the utilitarianism approach (the greatest good for the greatest number). The essay will go on to discuss CSR in terms of its definition, uses and who is covered. For example some companies operation CSR policies that are only designed to cover the interest of the shareholders. Following on from this the essay will discuss the impact globalisation has on poorer societies and the occurrence of child labour. Finally the essay will debate over the cultural differences found when operating in other countries and the issues that surround managing in these countries effectively. Relationship to course content (e. g. opics featured) The management issues that have been uncovered are: ? Ethics = discussion of types of ethics (consequentialists and nonconsequentialists). What is defined as ethically right or wrong? ? CSR = who should be covered by CSR? ? Globalisation = does it increase or decrease child labour? ? Cultures = cultural differences and how to manage people. http://www. bbc. co. uk/news/business-11381721 Proposed title URL from BBC News Website Name of student Signature of student Name of tutor Signature of tutor Date Stephanie Grant Stephanie Grant DR Graham Symon 06/01/11 Page 11 Date 15. 04. 11 Submitted with Extenuating Circumstances