Global HRM SG Exam 2

Common Law

Law based on tradition stated in constitution. A constitution enunciates a few, long-standing, general principles to which everyone is subject.

Civil code or law

Based on all inclusive system of written rules (3 types):

commercial, civil, criminal

Religious law

law based on religion

Most common: Islamic law or Sharia (referring to the way Muslims should live or the path they must follow)

Other Laws

Tribal laws, local customs, etc.

Labor standards that apply to many countries/firms that conduct international business

• Freedom of association

• EEO & Non-discrimination

• Prohibition against child labor and forced (slavery/prison) labor

• Basic occupational safety/health principles

• Consultation with worker groups before carrying out any substantial changes (ex: workforce reductions/plant closings)

• Grievance/dispute resolution procedures

• Use of (internal or external) monitors for auditing employment practices

United Nations

• plays an insignificant role in establishing employment laws/standards

• operated thru domain agencies like International Labor Organization until recently

• statement of universal human rights

• _-Global Compact: general assembly adopted 10 principles in area of human rights/labor standards/environment/anti-corruption

International Labor Organization

• two types of labor standards: binding conventions & nonbinding recommendations

• Primary goal is to improve work conditions, living standards, fair equitable treatment of workers globally

Human rights principles

1) Businesses should support/respect protection of proclaimed human rights.
2) Make sure they are not complicit in human right abuses.

Labor Principles

3) Businesses should uphold freedom of association & effective recognition of right to collective bargaining

4) Elimination of all forced compulsory labor
5) Abolish child labor

6) Eliminate discrimination in respect of employment/occupation

Environment Principles

7) Businesses should support precautionary approach to environmental challenges

8) Undertake initatives to promote greater enviornmental responsibility

9) Encourage development/diffusion of enviornmentally friendly tech

Anti Corruption Principles

10) Businesses should work against all forms of corruption, including extortion and bribery.

The ILO Declaration on Fundamental Principles & Rights at Work

Adopted in 1998 to uphold basic human values. 4 Principles/Rights:

• Freedom of association/effective recognition of right to collective bargaining

• Elimination of all forms of forced or compulsory labor

• Abolition of child labor

• Elimination of discrimination in respect of employment

Organization of Economic Cooperation & Development (OECD)

Coordinates economic policy to address globalization issues thru promotion of economic, enviornmental, social policy among members

Broader focus than ILO

World Bank & International Monetary Fund (IMF)

• research on the relation betwee trade policy reform and labor markets (wage, unemployment, etc)

• protection of social safety nets during structural reform of economies

OECD Multinational Enterprise Guidelines

• Advance sustainable economic, environmental, and social progress

• Respect human rights and engage with local communities

• Foster human capital through job creation and training

• Comply with legal and regulatory frameworks without seeking improper exemptions

Continued OECD Guidelines for Multinational Enterprises

• Uphold good corporate governance across enterprise groups

• Develop self-regulatory practices that foster societal trust

• Promote worker policy awareness and training

• Protect whistleblowers reporting violations from retaliation

World Trade Organization (WTO)

Replaced General Agreement on Tariffs & Trade (GATT)
Defers to ILO for pursuit of global labor standards

European Union (EU)

• Social Charter sets out 12 principles of worker rights

• Established European Social Fund to promote worker mobility

• Adoption of employment standards prevent locating MNE in pursuit of softer standards.

Every worker in the european community shall have the right to

freedom of movement

Every individual shall be _________ according to the regulations governing each association and shall be _____.

free to choose and engage in an occupation

fairly remunerated

The completion of the internal market must lead to ______ of workers in the European Community

an improvement in the living and working conditions

Every worker of the European Community shall have a __________ and shall whatever his status and size of the undertaking which he is employed enjoy _______

right to adequate social protection

adequate level of social security benefits

Employers and workers of the European Community shall have the _________________ for the defence of their economic and social interest.

right of association in order to constitute professional organizations or trade unions of their choice

Every worker in the european community must be able to have ___________ and to recieve such throughout their working life

access to vocational training

____________ must be assured and developed

Equal treatment for men and women

________ must be developed along appropriate lines, taking account for practices in force in various member states

Information, consultation, participation for workers

_______ in their working enviornment

Every worker must enjoy satisfactory health and safety conditions

Without prejudice to such rules as may be more favourable to young people, in particular

those ensuring their preparation for work through vocational training, and subject to

derogations

limited to certain light work, the minimum employment age must not be lower

than the minimum school-leaving age and, in any case, not lower than 15 years

North American Agreement on Labor Cooperation (NAALC)

provides mechanisms for problem-solving consultations when there are differences in policy and practice

Bilateral Agreements

linking liberalization of trade and labor standards between USA and Jordan, Chile, Singapore.

Mercosur/Mercosul

Argentina, Brazil, Paraguay, Uruguay

Andean Community

Bolivia, Columbia, Ecuador, Peru, Venezuela

The Association of South-East Asian Nations (ASEAN)

Brunei, Indonesia, Malaysia, Philipines, Singapore, Thailand, Vietnam, Laos, Myanmar, Cambodia

Asia-Pacific Economic Cooperation (APEC)

enhancing economic growth, trade, investment and cooperation among 21 countries including Australia, Canada, China, Indonesia, Japan, etc

Commercial Diplomancy

refers to the process of influencing foreign gov policy and regulartory decisions that affect global trade

involves: trade negotiations, decision making, regulations, legislations, standards, conduct, and subsidies

Multinational Enterprises must (Globally)

• Comply with national laws and regulations

• Comply with international standards and supranational regulations/laws

• Comply with extraterritorial laws

• Examples of US Laws with Extraterritorial intent

Factors Determining Integration

• interrelation of operations

• common management

• centralized control of labor relations

• common ownership or financial control

Major Issues for IRHM

• Immigration and Visas

• Personal Data Privacy/Protection

• Anti discrimination

• Termination and redution in force

• Intellectual property

Immigration & Visas

• Legislation/countries attitude over this varies (and can change)

• Takes a lot of time (HR needs to plan ahead)

• Expensive and complicated

Data Privacy & Protection

• EU has robust protection (increasingly becoming global standard)

• American firms that agree to EU standards can be certified by US Dept of Commence

• Consent is needed from employees (limited power of consent via prerequisite

Anti-discrimination & Harassment

• All EU members are required to pass legislations to prohibit this based on race, gender, age, sex, family status, religion/belief

• Interpretation on bullying/sexual harassment varies per country

• 10% of employees globally report being sexually harassed/bullied

Termination & Reduction in Force

• Employment at will does not exist outside of the US

• Rights to terminate, lay off, reduce, restructure, move, outsource, subcontract is highly constrained

• Termination mandates extensive notice, consultation, severance payment based on tenure, age, salary

Protection of Intellectual Property

• Each country/culture have differences for intellectual property

• Very difficult to enforce non-compete agreements in GHRM

• Proper communication on this per location is important

Ethical Relativism

• what is right is whatever a society defines as right

• may either be individual or societal level

Ethical Absolutism

• there is a single set of universal ethical standards or principles that apply all times in all circumstances in all cultures

Ethical Dilemmas in IRHM

• tolerating cultural diversity while avoiding moral recklessness

• assurance of ethical behavior and conduct

• implementation of global ethic standards

• principles for shaping behaviors in operations (respect for core human values determine absolute moral threshold)

Global Union Membership

• Comparing between country to country is difficult

• Strength of trade unions is strong but membership is small

• Weaker countries actually have stronger unions

World Federation of Trade Unions (WFTU)

• Est in 1945 to bring together trade unions around the world in a single organization modeled after the UN

• primarily a federation of state run unions for communist countries

International Confederation of Free Trade Unions (ICFTU)

• Made in 1949 after split of WFTU

• Grouped major unions in Western World

International Trade Union Confederation (ITUC)

• Umbrella organization of national trade union federation (154 countries, 168M workers) to defend workers rights in era of globalization

• Prioritizing promotion/defense of workers rights and interests thru cooperation between trade unions

European Trade Union Confederation (ETUC)

• made 1973 to promote interests of working people in EU institutes

• Primary objective to promote European Social Model working with institutions for economic/social policy making at highest lvl

World Confederation of Labor (WCL)

• international trade union confederation inspired by basic values of Christian humanism.

• mainly from 3rd world countries but unites autonomic/democratic trade unions globally

Trade Union Advisory Committee (TUAC)

• international trade union organization that has consultative status with OECD

• Interface for labor unions with OECD and various committees

Global Union Federations (GUFs)

• international federation of national/regional trade unions representing specific industrial sectors/occupational groups

• Most major unions are members of one or more of this

MNE Approaches to employee relations

• Hands off

• Monitor

• Guide & Advise

• Strategic Planning

• Set Limits and approve exceptions

• Manage totally from headquarters

• Integration of headquarters IHRM and line managers

Work Councils

• Made of elected employees

• Have the right to receive information and be consulted related to decisions that can affect employees social/economically

Codetermination

• legal requirement that employees participate on supervisory boards or board of directors

• management needs to obtain the agreement when major strategic decisions are made

• employers are represented at the supervisory board

• single tier system

• mixed system