Page 247 - DMGT548_GLOBAL_HRM

Global HRM

Notes
Example: When the percentage of pesticides/chemicals in Coke and Pepsi was found to
be higher in India than in the US, there was nationwide coverage, although it was less than the
amount found in local drinks.
The laws and social norms governing these factors may vary in different countries and compliance
with them with better standards than local firms is necessary for a good image. The foreign
subsidiaries should take particular care of:

1. Adulteration and loss of quality.
2. Environment and pollution control.
3. Employment of women, children and minorities.
4. Employment of local citizens.

5. Personal issues including remuneration, pension or severance benefits.
6. Management-union relationship.
7. Taxation and financial controls.
8. Purchase of local and foreign materials.

9. Purchase, lease, and location of buildings and plant.
10. Participate in local festivals and make liberal donations.
Ethical issues including human rights and environment protection are at the centre stage in
today’s world. This knowledge can be obtained from a study of the national legal system,
religious practices and codes, study of organisations and their cultures, interviewing expatriates
who have served in that country and gaining knowledge.
Ethical consumerism is the intentional purchase of products and services that the customer
considers to be made ethically with a minimal harm to or exploitation of humans, animals and/
or the natural environment. Ethical consumerism is practiced through ‘positive buying’ in that
ethical products are favoured, or “moral boycott”, that is negative purchasing and company-
based purchasing.

13.2.5 Social Responsibility of MNCs

Ethics and the question of corporate social responsibility are complex and the source of much
controversy.
Corporate social responsibility is a form of corporate self-regulation integrated into a business
model. CSR policy would function as a built-in, self-regulating mechanism whereby business
would monitor and ensure its adherence to law, ethical standards, and international norms.
Business would embrace responsibility for the impact of their activities on the environment,
consumers, employees, communities, stakeholders and all other members of the public sphere.
Furthermore, business would proactively promote the public interest by encouraging community
growth and development, and voluntarily eliminating practices that harm the public sphere,
regardless of legality. It is also known as corporate responsibility, corporate citizenship,
responsible business, Sustainable Responsible Business (SRB), or corporate social performance.
Corporate Social Responsibility is becoming an increasingly prominent issue in Europe, North
America and elsewhere. The main reasons for this growing interest are:
1. Globalisation and rapid advances in information technologies;
2. The greater importance of citizen-driven activities, best seen in the work;

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