Module – 6 Diversity Management and CSR 7 hours

Equal opportunities, Diversity Management, Work–life balance: practices and discourses;

International Culture Management: Model Organisational Culture and Innovation, Models of
Culture, Hofstede’s Four, Cultural Dimensions, Trompenaar’s Seven Cultural Dimensions,
Globe’s Nine Cultural Dimensions, Edgar Schein’s Model of Culture Deal and Kennedy’s
Culture Model, Schneider’s Culture Model, Cameron and Quinn’s Model of Culture Charles
Handy’s Model of Culture Denison’s Model of Culture, Profile of Organisational Culture in
International Organizations Managing International Culture. Corporate Social Responsibility
and Sustainability through Ethical HRM practices. Ethics and corporate social responsibility
International labour standards.

EQUAL OPPORTUNITY AND MANAGEMENT IN THE DIVERSITY GLOBAL

CONTEXT
Introduction

Equal opportunities and diversity management differ both conceptually and legally but that
they are often used interchangeably. The main commonality is undoubtedly their aim to provide
fairness and equality at work. In fact, both concepts, DM in particular, are perceived as effective
methods to address negative treatment at work. The negative impact workplace discrimination
can have on employees and organisations (i.e., increased stress and turnover intention) are well
documented and thus preventing discrimination should be on every organisation's agenda.
Both EO and DM thus seem to aim for organisational justice and connect to Adam's equity and
procedural justice theory, meaning that how employees perceive fairness of decision- making
and HR policies and practices impacts their work. Hence, if both concepts aim for
organisational justice and fairness, this is one possible explanation why they are used
interchangeably and that they are not too different but that they simply have different goals in
mind.

Over the years, there have been numerous attempts to dichotomise both terms. While EO seems
to be a pro-equality approach that is limited to ensuring social justice by focusing on problems
associated with diversity (i.e., discrimination and inequality), DM goes beyond to focus on
potential of diversity as a resource to realise business benefits.

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However, looking at how both terms are conceptualised shows that this distinction is not
always clear-cut. Historically, EO in the UK took different forms and was redefined multiple
times according to the dominant public and political opinion at the time. Generally, it can be
described as a rights-based, systematic, liberal approach that relies on based on social
differences is prevented and fair and equal treatment can begal compliance and the principle
of sameness so that discrimination be provided.

Chambers broadly distinguishes without further distinguishing between social differences. A

more discrimination, referring to formal equality that treats individuals progressive form is
based on fundamental egalitarian equality, an approach that assumes that everyone has the
inalienable human right to be treated equally unless there are objective and justifiable reasons
for differential treatment. It acknowledges that not everyone is equal due to different obstacles
they have to overcome but that equal opportunities are provided if everyone can achieve the
same goal despite their differences. The focus is on specific disadvantaged groups that are
treated as members from the same reference group and are measured against a set of neutral
standards set by the organisation. The extent to which these standards are neutral has been
criticised as this required minorities to assimilate to the characteristics of the dominant group
rather than focusing on objective standards based on merit. More egalitarian forms of equal
opportunities allow for positive action and acknowledge that organisations should provide
minorities with the necessary skills and a fair chance to compete on a level playing field but
then they should be measured based on merit.

Equal Opportunity: Labour Laws and Government Policy Intervention

The term 'equal opportunities' is associated with employment equity legislation related to
discrimination arising from characteristics such as gender, age, ethnicity, religion, physical
ability and sexual orientation. The elimination of inequality necessitates state intervention
through Legislation and Affirmative Action (AA) policies to provide atleast a basic level of
protection in principle. Many governments have issued EO legislation during the last 30 years,
although what the term 'equal opportunities' means, and who are included in the category for
protection, differs across countries. The introduction of EO legislation has often been
accompanied by the introduction of AA programmes encouraged by the state. However, the
focus of and pressure for establishing EO legislation and policy interventions are not the same
across nations and their introduction is often a response to the changing political, socio-
economic, labour market and employment relations environment For example, Casey et al.'s

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comparative study of Norway and New Zealand on their respective approach to state
intervention on gender equality showed that the Norwegian government adopted a nonsense,
no-delay approach in enacting legislation to gain gender equality', whereas the New Zealand
government took a softer approach and normative equality that persistently favours
'voluntarism and 'voluntarism persuasion'. To some extent, these different approaches reflect
the nuances of the political traditions of the two nations that share much in common (also see
below for examples of other countries).

Where international bodies, such as donors and non-governmental organisations, are involved
in EO policies and actions in nation states, such efforts may be undermined due to a lack of
local legitimacy. For example, Özbilgin et al.'s country case study of Turkey and Pakistan
gender equality employment policy interventions found that transposing Equal Employment
Opportunities (EEO) initiatives from Western countries to Muslim majority countries and
across Muslim majority countries is fraught with difficulties if they ignore due consideration
of institutional and cultural conditions, organisational processes and individual choices in each
country.

As mentioned above, gender equality constitutes a significant part of EO legislation, AA

programmes and public debates. Unfortunately, despite the increasing provisions of anti-
discrimination legislation and espoused commitment from organisations to equality, gender
inequality in various stages of the employment process remains a salient feature in the labour
market in most countries, and is more pronounced in some than in others.

Özbilgin et al.'s study concluded that ‘employment practices are gendered in different ways
across national borders', and that an 'essentialist and deterministic' approach to gender, work
and cross- national transfer of good practices does not work. This is because 'discourses of
gender equality and the macro-national and cultural approaches towards women's status and
roles' in societies are distinctive, despite similar patterns of gender disadvantages. Numerous
factors and reasons can contribute to the failure or only partial success of legislative and policy
interventions. Some national legal systems are impeded by the complexity and multiplicity of
employment-related laws, directive regulations and administrative policies issued at different
administrative levels.
For in the UAE about the success and failure of imposing a quota system to example,
Forstenlechner et al.'s case study of a finance company improve demographic diversity of the
workforce and employment equity found several main reasons that have led to the normative

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failure of the quota system. These include competing ideologies and priorities, as well as the
lack of coordination and integration at various levels.
Other national legal systems lack clear enforcement channels and support through which
workers can seek to secure compliance with the law. In some cases, governments'
determination to advance social equality is compromised by competing demands from their
economic agendas.

Diversity Management
Diversity can be a blessing or if mismanaged a problem. Bringing tighter people with
different values and views can ensure they attack problems in a richer, more multi faced way.

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Approaches to Diversity Management

HR approaches to diversity management are:

1) Diversity Enlargement: This approach focuses on increasing the representation of
individuals of different ethnic and cultural backgrounds in the organisation. The goal is to
change the organisational culture by changing the demographic composition of the
workforce. For example, the Norwegian government backed a draft law that would oblige
companies to appoint women to at least 40% of their directorships. The assumption is that the
new employees will conform to existing practices and that no additional HF intervention will
be needed. The mere presence of increasing me a Us numbers of employees from different
backgrounds will result in cultural change that will bring the desired results. Often this div
approach is motivated by compliance to laws and public org expectations of political
correctness rather than a deep in understanding of the business need for diversity.

2) Diversity Sensitivity: This approach recognizes the potential difficulties introduced by

bringing together individuals from diverse en backgrounds and cultures in the workplace. It
attempts to overcome these difficulties through diversity training that is aimed at ho
sensitizing employees to stereotyping and discrimination while also promoting
communication collaboration. The assumption embedded in this approach is that increased
sensitivity to differences will HR improve performance. Although this is sometimes the case,
in other vers instances, particularly when the training is not linked to corporate hlars goals
and initiatives and not supported by its long-term policies, it can create more harm than good.
Emphasising differences can backfire by reinforcing stereotypes and highlighting intergroup
differences rather than improving communication through understanding and common
interests Diversity.

3) Cultural Audit: This approach aims at identifying the obstacles ensit that limit the progress
of employees from diverse backgrounds and that block collaboration among groups in the
organisation. The audit is usually performed by outside consultants who obtain data from
surveys and focus groups and then identify areas in which employees that are different from
the dominant group feel that they are blocked from performing to the best of their ability.
Although, this is a customized approach that is tailored to specific organisational cultures, the
recommendations for change are typically based on the notion that the source of the problem
is in the dominant cultural group (typically, in North America, White male) and that the change
must come from within that group. For example, Ford Motor Company's

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global employee satisfaction survey. The survey, called PULSE, is distributed annually among
all of the company's salaried employees (in 2002, 71% of employees participated in the survey).
Employee satisfaction with diversity is one of the 12 dimensions assessed by the survey, and
the results are used to assess Ford's commitment and performance in achieving a diverse
workforce.

4) Strategy for Achieving Organisational Outcomes: This approach, proposed by Kossek

and Lobel as a comprehensive framework for HR diversity management, focuses on diversity
management "as a means for achieving organisational ends, not as an end in itself". Using this
strategy, managers have to identify the link between diversity management objectives and the
desired individual and organisational outcomes. Organisational strategic choices are viewed in
the context of environmental drivers, such as the changing labour market composition, the
global economy, the shift to a service economy, and the legal and governmental pressures.
Analysing environmental drivers can help the organisation to determine the specific benefits it
expects to gain from its diversity management and how those are linked to its overall business
strategy.
Benefits of Diversity Management
1) Increases Organizations Production
2) Creativity and Problem Solving
3) Attract Better Employees.
4) Increases Organizational Flexibility.
Problems of Diversity Management
1) Gender Diversity in the workplace.
@ Earnings Gap
@ Glass ceiling
2) Race Diversity in Workplace.
3) Age Diversity in the workplace.
4) Religious diversity in the workplace.
5) Employees with Disabilities in workplace.
6) Sexual Orientation diversity in workplace.
Suggestions for managing Diversity
1) Build a culture of respecting Diversity
2) Make managers Accountable for diversity
3) Diversity training programmes
4) Review recruitment practices

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Work-Life Balance: Practices and Discourses
Work-life balance is a term which is used to represent the different combinations of practices
at the workplace which provide support and help to the manpower in accomplishing a balance
between the family life and office life demands. Work-life balance is the proper amalgamation
of the organisational requirements with the personal commitment of the manpower.

The organisations which are able to identify the different pressures exerted on the employees
from the family and other external sources are always in advantageous position and thus they
facilitate different measures to the employees so that they can withstand these pressures. This
type of balance is mainly facilitated with the help of flexible working hours/ work-timings and
similar types of work adjustments. When the right of an individual to lead a healthy life inside
and outside the paid work is accepted by the organisation and a relevant policy is developed
(for serving the individual, organisation and the society at large), then only the work-life
balance is accomplished.

According to the Work Foundation, "Work-life balance is about individuals having a measure
of control over when, where and how they work, leading them to be able to enjoy an optimal
quality of life".

Since the mid-1990s, work-life conflict (WLC) has become a major issue in different parts of
the world for different reasons. In Western economies, work-life issues emerged primarily as
a result of demographic changes (e.g. declining labour force and an ageing population) and
work intensification due to globalized competitive pressure. In particular, the participation of
women with childcare/elderly care responsibility in part-time and increasingly full-time
employment has been a major focus of the WLC debates and policy orientation. Many
governments are made aware of the gap between the growing presence of WLC and the
deficiency of institutional supports and cultural change to reduce the negative impacts. As
Pocock pointed out, 'the political case for work-life balance is increasingly evident in
industrialized countries that are more and more dependent upon the paid Work contributions
of women and workers with dependants'

Policy initiatives have been promoted by various governments to address the issue of WLC,
often as part of the EO and DM programmes, families. Organisations, particularly those in

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the public sector and large in order to enhance the wellbeing of those in employment and their
MNCs, have also introduced a range of HR practices, such as flexible work arrangements,
partly in response to these policy initiatives. It is argued that organisations play a central role
in providing quality jobs that will not only raise the standard of material life of the employees
and their families, but also the intrinsic rewards and psychological well- being of the workforce.

Existing studies on work-life balance point to the fact that the adoption of WLB initiatives does
have a positive impact. For instance, Abendroth and den Dulk's survey study of 7867 service-
sector workers in eight European countries found that organisational support for employee
WLB satisfaction has a direct and moderating effect, and that emotional support and
instrumental support at the workplace have a complementary relationship. Similarly, Avgar et
al.'s study of WLB practices and organisational support in 172 hospitals in the UK and their
direct and indirect effects on three key stakeholders found that the greater use of WLB practices
enhances outcomes for hospitals, their employees and the patients they serve. In addition, the
effective adoption of WLB practices is often associated with the adoption of good HR practices.
For example, Wang and Verma's analysis of the Workplace and Employee Survey of 3943
workplaces in Canada revealed that firms with a product leadership business strategy are more
likely to have WLB programmes in place than those with a cost leadership strategy. In addition,
firms that adopt WLB programmes also adopt high performance work practices such as
investment in training, employee involvement, and so forth.

Despite the strong political, social and economic case for WLB legislative intervention and
policy/HR initiatives, a common finding of the growing body of empirical studies conducted
in different societal contexts is that WLB policies and practices in general have been less than
effective, for various reasons. Fundamental differences also exist between Western and Eastern
countries in their political ideologies, the resultant positions held by the government and
employers towards demographic and labour market characteristics, work-family values and
with no or little government policy. The existence of WLB practices WLC. Typically, a laissez
faire approach has been adopted in the East relies largely on employers' discretion, and the
ability of individuals to demand the placement of work-life policy and practice in the
workplace.

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INTERNATIONAL CULTURE MANAGEMENT

Meaning and Definition of Cross-Cultural Management

Basically human races came with different cultural background. The of doing things in one
culture may not be the way in other culture. What is good in one culture may be bad in other
culture. Sometimes the activities are all the same in two different cultures, but two different
different interpretations. Thus, cross-cultural two meanings, management is about managing
people across cultures.

Cross-cultural management is effective interaction and understanding of people who represent

different cultures. It aims at designing feasible organisation structure and management
mechanism in an environment with different cultures, achieving rational allocation of corporate
resources, mining and using potentials and values of human resources as much as possible, and
improving corporate comprehensive effect to a maximum degree. Failures of multinational
companies are mostly originated from the neglect over cultural differences, primary or slight
understandings. In order to achieve healthy development, organisations must implement
effective cross-culture management. The key is to avoid the transformation from cultural
difference to cultural conflict, solving present cultural conflicts as much as possible, and
achieving operational targets, based on recognising and distinguishing the cultural differences.

Some people are in favour of the converging world, i.e., all things are going to be same. Some
people are arguing still the world has divergence. For example, in USA, it is performance that
counts, based on which higher assignments and promotions are given. In Indian companies,
performance is not the main criteria. It is "organisational compatibility" that counts. That is the
employee "fit" into the organisation that counts. India is a High context society. The "fit" into
the organisation has to be interpreted in Indian way. The business has different interpretation.

For example, in USA, doing business means creating organisations wealth. In India doing
business means "individual wealth". On recruitment, in USA it is the process of selection, in
India it is the process of rejection.

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According to Mead and Andrews, "Cross-cultural management is the development and
application of knowledge about cultures in the practice of international management, when the
people involved have different cultural identities".

According to Nancy Adler, "Cross-cultural management explains the behaviour of people in

organisations around the world and shows people how to work in organisations with employees
and client populations from many different cultures. Cross-cultural management describes
organisational behaviour within countries and cultures; and, perhaps most important, seeks to
understand and improve the interaction of co- workers, managers, executives, clients, suppliers,
and alliance partners from countries and cultures around the world". Effective cross-cultural
management contributes to high effectiveness of global corporations. Organisations with
learning orientation are able to face cross-cultural management challenges. Relevant
managerial challenges are cultural awareness, culture sensitivity and flexibility to deal with
diversity. Thus, cross-cultural management is positively linked to corporate profitability in the
global business arena.

Dimensions of Cross Cultural Management

1) Team Management
2) Leadership
3) Corporate Strategy
4) Organizational Structure
5) Human Resource Management
6) Knowledge Management
7) Core Values
8) Communication
9) Conflict Resolution

Model Organisational Culture and Innovation

Many studies also point out that innovativeness and rate of innovation in organisation is
dependent upon the kind of organisational culture that gets nurtured. For example, Boston
Consulting Group in its study of Most Innovative Companies in 2014 has found that all
organisations that have a successful innovation track record have certain distinct organizational
culture elements:

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1) Leadership Style: Top management committed to radical projects created different key
performance indicator (KPI) system for radical projects, introduced incentives linked to radical
innovations and encouraged culture of experimentation. Leadership fully backs and shows
commitment to radical innovation projects by designing a KPI system which is non- financial
and non-specific but process- centric. Leadership exhibits high tolerance for failures and breeds
functional risk-taking behaviour leading to concentration of innovation-specific efforts.

2) Organisational processes: The way processes are defined in highly innovative

organisations encourages iterations and adjustments, provides enough room and time for
experimentation and sometimes trial and error attempts, methods that rationally qualify
difference between high and low innovativeness, protects radical projects from strict cost
control and budgetary constraints, transparent system of project approvals and their targets and
project approval being not dependent upon strict ROI projection. It is found that more than 80
per cent of breakthrough innovators allow projects to start with no projection of future returns.

3) Organisational Structure and Systems: Innovative organisations were found to have

created different governance that motivate motivate and systems systems encourage that
collaboration radical innovation and duly recognize interdependency of efforts, and decision-
making is consensual and authority is expert driven rather than hierarchical or concentrated.
Experimentation and idea generation is at the core of monitoring or review system.

Models of Culture
Various models of culture are as follows:
1) Hofstede's Cultural Dimensions
2) Trompenaars' Cultural Dimensions
3) The GLOBE's Nine Cultural Dimensions
4) Edgar Schein's Model of Organisation Culture
5) Deal and Kennedy's Culture Model
6) Schneider's Culture Model
7) Charles Handy's Model of Culture
8) Cameron and Quinn's Model of Culture

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9) Denison's Model of Culture
1. Hofstede's Four Cultural Dimensions

Geert Hofstede defined national culture as the set of collective beliefs and values that
distinguish people of one nationality from those of another. His original comprehensive study
that he conducted while working at IBM as a psychologist involved over 1,00,000 individuals
from 50 countries and three regions. In the study, he identified four important dimensions in
national culture.
Hofstede's four important cultural dimensions are as follows:
1) Uncertainty Avoidance:
2) Power Distance:
3) Individualism Versus Collectivism
4) Masculinity Versus Ferminity

2. Trompenaars' Seven Cultural Dimensions

Trompenaars' research, published in 1993 and extended in 1997, is similar to that of Hofstede's
research in its use of a series of bipolar dimensions. However, while Hofstede's dimensions
were primarily empirically derived, Trompenaars' are theoretically derived largely from the
work of sociologist Talcott Parsons.
Trompenaars' cultural dimensions are as follows:
1) Universalism Versus Particularism
2) Communication Versus Individualism
3) Neutral Versus Emotional
4) Specific Versus Diffuse
5) Achievement Versus Ascription
6) Internal Versus External
7) Sequential Versus Synchronic Cultures.

3. The GLOBE's Nine Cultural Dimensions

Project GLOBE (Global Leadership and Organisational Behaviour Effectiveness) is the
brainchild of University of Pennsylvania Professor Robert J. House. It is a massive and on-
going attempt to "develop an empirically based theory to describe, understand, and predict the
impact of specific cultural variables on leadership and organisational processes and the
effectiveness of these processes". GLOBE has evolved into a network of more than 160
scholars from 62 societies since; the project was launched in Calgary, Canada, in 1994. Most

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of the researchers are native to the particular cultures they study, thus greatly enhancing the
credibility of the project.
During the first two phases of the GLOBE project, a list of nine basic cultural dimensions was
developed and statistically validated. Translated questionnaires based on the nine dimensions
were administered to thousands of managers in the banking, food, and telecommunications
industries around the world to build a database. Results are being published on a regular basis.
Much work and many years are needed if the project's goal, as stated above, is to be achieved.
In the meantime, we have been given a comprehensive, valid, and up-to-date tool for better
understanding cross-cultural similarities and differences. The GLOBE (Global Leadership and
Organisational Behaviour Effectiveness) project team identified nine cultural dimensions that
distinguish one society from another and have important managerial implications:
1) Assertiveness:
2) Future Orientation
3) Performance Orientation
4) Human Orientation
5) Gender Differentiation
6) In group Collectivism
7) Collectivism
8) Power distance
9) Uncertainty Avoidance

4. Edgar Schein's Model of Organisation Culture

Edgar Henry Schein born in 1928 is a renowned professor at the MIT Sloan School of
Management who has studied extensively in the field of organisation management. According
to Edgar Schein - Organisations do not adopt a culture in a single day, instead it is formed in
due course of time as the employees go through various changes, adapt to the external
environment and solve problems. They gain from their past experiences and start practicing it
everyday thus forming the culture of the workplace. The new employees also strive hard to
adjust to the new culture and enjoy a stress free life.
Schein believed that there are three levels in an organisation culture.
1) Artifacts:
2) Values
3) Assumed values

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4) Deal and Kennedy's Culture Model
As a lead up to the discussion on corporate culture in people's management, it is important to
consider Deal and Kennedy's contribution. Deal and Kennedy suggests that 'People are a
company's greatest resource, and the way to manage them is not directly by computer reports,
but by the subtle cues of a culture'Deal and Kennedy a different perspective, examined
organisational culture from concluding that there are six interrelated elements which define
organisational culture. These are:
1) The history of the organisation.
2) The values and beliefs
3) Rituals and ceremonies
4) Storytelling
5) Heroic figures

6. Schneider's Culture Model

The Schneider cultural model isn't a new approach (it has its origins in the mid 90's) but it's
relevant today. When applying technical and process changes as part of a transformation, this
activity provides the means of assessing the current culture and how effective these changes
may be. Combining the above two dimensions gives us a 2x2 grid and four quadrants, each
representing a culture. Before we look at the grid and the resultant culture quadrants, a word

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of caution is necessary. The adjectives used to identify a culture is a simplification of the
qualities that the culture entails and is by no means carry a negative or positive connotation
with it. By the same token, no one culture is better than the other.

7. Cameron and Quinn's Model of Culture

Robert Quinn and Kim Cameron's created a four box culture model used to categorize
organisational cultures. Its vertical axis looks at whether an organisation is more focused on
stability or flexibility, and its horizontal axis looks at whether the organisation is more inwards
or outwards looking.
The model is known as a "competing values framework" because it compares these competing
priorities that organisations can have.

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8. Charles Handy's Model of Culture
Charles Handy born in 1932 in Ireland is a well-known philosopher who has specialized in
organisation culture. Charles Handy popularised a framework which links categorizations of
organisational culture to evidence in the form of organizational structure. Handy believed that
there are four main types of organisational culture which can be identified by the extent to
which an organisation is both formalized and centralized. The four types of culture he identified
were:

8. Denison's Model of Culture

The Denison model measures four critical traits of culture and leadership (Mission,
Involvement, Adaptability, & Consistency). Each of these traits is further broken down into
three indices.

1) Adaptability: Adaptability is perceiving and responding to the environment, customers, and

adapting processes and crucial behaviours if necessary. It is located in the quadrant of flexibility
and an external focus (and aligns with Create Culture). Three areas of adaptability are:
i) Creating Change: Welcoming new ideas, being willing to try new approaches to doing
things, see creating change as part of running a business.
ii) Customer Focus: Employees serve internal and external customers and look for new and
improved ways to meet customer expectations.
iii) Organisational Learning: Gaining knowledge from successes and failures, and
thoughtful risk taking. The reaction to reasonable mistakes is 'What can we learn?'

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2) Involvement: Involvement means engaging and aligning people, creating a sense of
ownership and responsibility. People feel a commitment to the organization and a sense of
autonomy. Based on flexibility and an internal focus. This quadrant resembles Collaborate
Culture. Constituents are:
i) Empowerment: They have defined areas where employees can make decisions and where
they can't.
ii) Team Orientation: Employees support each other in achieving goals and teamwork is
encouraged.
iii) Capability Development: Training, coaching, and trying new roles and responsibilities
are ways of developing new competencies.
3) Consistency: Consistency refers to integration of activities, coordination, and control, and
setting up an internal system of governance. Rooted in stability and an internal orientation (and
aligns with Control Culture). Areas of interest are:
i) Core Values: A clear set of core values help to make consistent decisions and behave in a
consistent manner.
ii) Agreement: Through dialogue and getting multiple perspectives on the table people can
reach agreement in case of difficult issues.
iii) Coordination & Integration: Employees understand how their work impacts others and
vice versa. They make sure that work is coordinated to serve the organization.
4) Mission: Mission entails creating a mission that answers the Why of the organization, and
how people's daily work contributes to shared goals and results. Based on stability and an
external orientation (resembles Compete Culture). This dimension consists of:
i) Strategic Direction & Intent: Creating multi-year strategies so that priorities are
established to make the vision come true.
ii) Goals & Objectives: Means creating short-tem, specific goals established that help
employees see how their daily activities Connect to the vision and the strategy.
iii) Vision: Here is the ultimate reason why you are in business your purpose - what you are
trying to achieve.

Profile of Organisational Culture in International Organisations

Just as countries develop unique patterms of values, norms, beliefs, and acceptable behaviour,
so also do companies. Most MNES ake great pride in their "organisational cultures," which
reflect, at least initially, the values of their founders and evolve to create corporate personalities
that give employees a template for how to behave, including how to

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make decisions, the importance and acceptance of operational concems such as continual
improvement, safety, and ethics, and how to treat fellow employees and customers.

For many firms, these organisational values take precedence over country cultures, particularly
when there is a conflict between the two. For example, many large MNES that oniginate in
Scandinavian countries may feel very strongly about the assignment of women to senior
management positions and will do this even in cultures where it is rare (and not supported by
cultural norms) for women to have these types of appointments.

Or MNEs from Western countries may feel strongly in favour ot egalitarian and participative
management styles and compensation practices and may decide that these values are so
important that they will pursue strategies to implement these practices in their foreign
operations, even though local culture supports a very different set of values.

For example, Asian MNES might emphasise strong group loyalty and discussion, with
deference to senior employees, in the ways they operate and make decisions, even in their
foreign subsidiaries, and even when this is not an accepted or understood way to operate local
employees and managers.

Managing International Culture

People believe and behave in certain ways based upon the culture in which they were raised.
For managers of multinational companies failure to understand eultural differences can
contribute to por personnel decisions, ineffective marketing and safety issues.
Small businesses must specifically tailor their operations to the culture in each country in which
they have offices, while also striving to unite all employees around a common mission.
1) Dimensions: When establishing an office overseas, consider cultural differences across
dimensions: masculinity/ individualism/collectivism, uncertainty/avoidance, femininity and
power distance, according to a paper on the Association to Advance College Schools of
Business web site. For example, members of high-power distance cultures, such as Malaysia,
show great deference to those who outrank them, whereas Danes, who come from a low power
culture, expect to participate actively in discussions across all levels. Individualist cultures,
such as the English, stress independence while collectivist cultures, such as Venezuelan, stress
the common good. Multinational companies should recognize that management styles should
differ across offices based on these cultural norms. When

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advertising a product in a culture with a high-femininity dimension, concentrating on how it
helps relationships will be more profitable than focusing on how it helps you achieve goals.
2) Family Ties: Cultures also differ in their views of family and business. In the United States,
a manager who hired her brother might well be accused of unethical nepotism. However, many
Latin American ultures consider skipping over qualified relatives to hire a stranger to be silly.
While a small business that only operates in the United States might ban the hiring of relatives,
a multinational business that operates in Latin America, as well as the United States, might
think twice about adopting such a policy.
3) Training: Small multinational businesses must change the culture in their own U.S.-based
headquarters to be nimble enough to compete cross-culturally. One way is to adopt a training
culture. Training could include presentations on cultural differences, as well as incentives to
encourage employees to travel to countries where you have offices. Hiring a multicultural
headquarters workforce also helps expose everyone to cultural differences.
4) Unified Culture: Multinational companies also must strike the balance between honouring
all cultures while still ensuring employees from all offices are united toward a common
mission.
One way to do this is to create a community culture across all offices. A company blog or
a daily e-mail can highlight accomplishments and give news from all offices. Online
collaboration tools or social media groups also can link employees from all cultures to common
mission.

CSR IN GLOBAL SCENARIO

Introduction
Social responsibility of business has, of late, been one of the most talked about and widely
supported subjects. Business depends on the society for the needed inputs like money, men,
and skills. Business also depends on the society for market where products may be sold to their
buyers. Thus, business depends on society for existence, sustenance, and encouragement. Once
society ceases to have any use for business, it has no place and reason to live. Being so much
dependent, business has definite responsibility towards society. Social responsibility or
Corporate Social Responsibility (CSR) is becoming an increasingly important activity to
businesses nationally and internationally. As globalisation accelerates and large corporations
serve as global providers, these corporations have progressively recognised the benefits of
providing CSR programmes in their various locations. CSR activities are now being undertaken
throughout the globe. It is important to understand how an international business responds to
society's expectations and undertakes social actions.

Dr Aravinda H G, MBA, SVIT. Page 19

While attention for the social impacts of international business is certainly not new, the past
years have seen renewed interest due to pressing global problems such as climate change,
poverty, human rights violations and HIV/Aids. Firms are increasingly called upon to play a
positive role and thus contribute to a more sustainable development. This applies most
notably to Multinational Corporations (MNCs), given their global influence and activities in
which they are confronted with a range of issues, stakeholders and institutional contexts, in
both home and host countries.
.
Tools of Corporate Social Responsibility
The following are the accepted tools for promoting socially responsible practices in business:
1) Accountability: It is focused on improving the quality of social and ethical accounting,
auditing, and reporting. Accountability specifies the processes an organisation should follow
to account for its performance. It does not include the levels of performance the organisation
should achieve such as social, environmental, and economic indicators. It explains or justifies
the acts and omissions to which one is responsible with a legitimate interest.
2) Codes of Conduct: A code of conduct is intended to be a central guide and reference for
day-to-day decision-making. It is meant to clarify an organisation's mission, values, and
principles, and to link them with standards of professional conduct. Codes of conduct typically
set guidelines on issues including child labour, forced labour, wages, benefits, working hours,
disciplinary practices, freedom of association, and health and safety.
3) Fair Trade: It is a growing international movement which seeks to ensure that producers
get fair treatment within trade relations. Fair trade seeks to challenge conventional wisdom
about trading relations by establishing a partnership between the producer and the buyer based
on long-term commitment, stable prices, and greater producer involvement in marketing.
4) Social Accountability: The Council on Economic Priority Accreditation Agency
(CEPAA) has initiated an international standard for social accountability in order to ensure the
standards. It is a voluntary standard and can be applied to any organisation or a business in any
industry. In addition to performance standards, an organisation must introduce a Social
Management System (SMS) to assure compliance and continuous improvement in social
performance in the set practices.
5) Socially Responsible Investing (SRI): It is a broad term and refers to many investment
practices that consider not only the financial aspects of an investment but also social and
environmental issues. SRI helps investing to be used as a tool for improving business practice
and community development. It can be an effective means of promoting CSR when there is

Dr Aravinda H G, MBA, SVIT. Page 20

money to invest, a methodological approach, and an understanding of traditional investment
practice.
6) Global Reporting (GR): It is a multi-stakeholder; international initiative established to
develop and provided globally applicable sustainability reporting guidelines. GR seeks to
elevate the quality of reporting and achieve greater comparability, consistency, and usefulness
of the reports. The GR consists of fifty four core indicators and are organised into
environmental, financial, and social dimensions.

Sustainability through Ethical HRM Practices

The overlap between sustainability and CSR is created by the focus on side and feedback
effects (also "impacts" or "externalities") of corporate actions. In practice, many companies
use the terms CSR and sustainability interchangeably. For example, some companies have
sustainability strategies and a sustainability report, while others have CSR strategies and a
CSR report. The term sustainability means an ability or potential to endure or tolerate. It also
stands for fulfilling the challenge so that next generation can also avail similar benefits and
can enjoy the same lifestyle the way people are enjoying today. Further, it includes taking a
long-run position on evaluating social, economic and environmental effects of business. In
broader terms, sustainability implies fulfilling the present generation needs without any
misuse of resources so that, next generation can also meet its needs without any compromise.
The main essentials of this concept are:
1) The intended obligation of modern society for the quality of lifestyle of existing
generation.
2) Conservation of environment, the resources and other elements required for next
generations to also be able to endure better quality lifestyle.
This is a challenging activity which demands greater modification in policy, outlook and
elementary thoughts, etc. about the economy for its entire execution. Some of the different
societal contexts for and challenges to the implementation of international labour standards,
EO legislation and DM initiatives are already explained above. These are issues central to the
IHRM aspects of CSR. Two major objectives are consistent with the argument for active
engagement with CSR, labour standards, EO and DM:
1) To identify and eliminate discriminatory practices in workplaces, and
2) To enable organisations to gain competitive advantage through ethical and strategic HR
practices.

Dr Aravinda H G, MBA, SVIT. Page 21

Ethics and Corporate Responsibility

Both business ethic and CSR looks very similar to each other. But still there are many
differences in both of these concepts. They are mentioned as below:
1) Business ethics is concerned with implementation of moral values, whereas, corporate
social responsibility refers to values and beliefs based on strategies and plans involving a class
of stakeholders.
2) Business ethics refers to a part of social responsibilities of business, whereas, corporate
social responsibility implies responsibilities of firm to maximise its positive impacts and
minimising the negative impacts.
3) Business ethics consists of standards, and principles that govern the attitude of business
toward the other world. Its actions are judged to be ethical or unethical and this judgement is
based on social acceptance and rejections. Whereas, CSR is the decision of stakeholders that
social, ethical, charitable, and economic responsibilities placed by different stakeholders will
determine the extent to which business citizenship is exhibited by the firm.
4) Business ethics involves the principles which include conscious and planned regulations or
inquisitive of business behaviour that directs decision-making, whereas, corporate obligations
can be considered as a commitment with society.
5) Business ethics comes into existence when business actions are good for business but not
for society, whereas, CSR comes into existence when business actions are good for society but
may or may not good for business.

Dr Aravinda H G, MBA, SVIT. Page 22

6) To a great extent business ethics is morality, whereas, CSR is policy and responsibility.
7) Both ethics and CSR are important for a business. In absence of ethics, an organisation is
like a capitalistic state which is in its worst phase. However, in absence of CSR, the society or
particular community suffers at large.

Corporate Social Responsibility Issues in MNCs

These issues and challenges will be present throughout the operations especially if the company
is evolving on a global market or in a host country.
1) Transparency Issues: The lack of transparency is one of the issues that companies need to
focus on when implementing CSR in the different subsidiaries of the organisation. Due to the
fact that CSR is a voluntary activity, it is difficult to completely regulate what is being done
the organisation, how the fund that are supposed to be for the CSR funds are used and what
the impact of the activities held have in the society. Furthermore in cases whereby multi-
national companies conducting CSR in other countries which would be mostly developing
countries, there might be cases of misuse of the fund whereby the absence of regulatory body
or other audit firm will not be able to confirm whether or not the fund has been properly used
or if the programme itself is operational.
2) Lack of Knowledge: CSR and business ethics are terms that are widely used within most
of the developed countries whereby the different importance and implications of these terms
are more-or-less known by the general population but however in developing countries there is
a tendency to have a lack of participation in the CSR programme due to the lack of
understanding about the term itself. This results into having an absence of different
infrastructures and non-governmental bodies into participating in the programme thus making
it to be useless.
3) Absence of Infrastructure and NGOs: Even if in developing countries, global companies
are likely not face this challenge, they will face them in other countries where they are
operating. For instance, an American company will not face a lack of infrastructure or NGOs
in the US whereas if they want to implement a CSR in a country such as China or even India,
they might face this challenge. The absence of specialised individuals and also well organised
NGOs in the country or area whereby the company want to implement its problem will reduce
the probability of have an efficient CSR implementation.
4) Lack of Consensus and CSR Guidelines: An issue which affect both developed and
developing countries, is the fact that there are several cases of duplication of CSR programme
and activities. This is due to absence of collaboration between firms whereby instead of each
of them help different communities or sector they might both help the same one thus resulting

Dr Aravinda H G, MBA, SVIT. Page 23

into having firms to competitive spirits instead of collaborating to help a wider scope in the
society they are involved.

INTERNATIONAL LABOUR STANDARDS

Concept of International labour standards
International labour standards are conventions, recommendations designed to eliminate unjust
and inhumane labour treaties and practices. International into standards labour have grown by
a supervisory system designed to address all sorts of problems in comprehensive system of
instruments on work and social policy, backed their application at the national level. The
International labour standards are universal in nature. They are devised in a way that allows all
countries, regardless of economic or social status, to implement and ratify them. Thus, the
standards are designed to be flexible so that each nation may create laws that implement the
standards and simultaneously correspond to the needs of their individual societies.

Characteristics of International Labour Standards

The international standards enshrined in the legal instruments of the ILO have four main
characteristics which are as follows:
1) Universality: As almost all the countries of the world belong to the ILO and are covered by
the same legal instruments which provide somewhat identical minimum social guarantees.
2) Specificity: That is the standards are drafted, negotiated, and adapted on a tripartite basis by
Governments, employers' organisations and trade unions. As a result, the ILO legal instruments
are intimately linked to economic, social, and political realities.
3) Comprehensiveness: In so far as the International Labour Codex comprises 185
conventions and 195 recommendations, covering fundamental social rights as well as various
aspects of labour and social conditions. The ILO legal instruments represent the most complete
set of relevant regularly updated texts covering - freedom of association, action and collective
bargaining; equality of opportunity and equal treatment; employment and human resources;
labour administration - wages; working hours; safety and health at work; special categories,
including children, youth, women, and migrants; special sectors, including agriculture, fishery,
healthcare workers; and, last but not least, social security.
4) Flexibility: As Member States can choose between alternative standards. Some conventions
allow developing countries for a transitory period to adopt lower standards than developed
countries. As standards are implemented through national legislation, further flexibility is
provided by allowing terms such as 'incapacity for work' to be interpreted in line with the
national system concerned.

Prof. Manjunatha S, MBA, SVIT. Page 24

Scope and Content of ILO Standards
ILO standards established through the adoption of codes, guidelines, and declarations, as well
as conventions and recommendations, cover an extraordinarily wide scope and are referred to
collectively International Labour Code. Indication of the scope of the code is evidenced by
the following categories used by the ILO to classify as the conventions and recommendations:
1) Basic human rights (freedom of association, forced labour. discrimination in employment,
equal pay);
2) Employment;
3) Conditions of work and social policy;
4) Social security;
5) Industrial relations;
6) Employment of women;
7) Employment of children and young persons;
8) Special categories of workers (seafarers, dockworkers, plantation workers, tenants and
sharecroppers, indigenous and tribal populations, workers in non-metropolitan territories,
migrant workers, nursing personnel);
9) Labour administration; and
10) Tripartite consultation.

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Prof. Manjunatha S, MBA, SVIT. Page 25