BSACET UNIT-5 IHRM

Emerging Trends in International HRM, HR/IR issues in MNCs and Corporate Social Responsibility, Case
Studies.

Emerging Trends in International HRM

When business conducted across national and cultural borders, the operationalisation of an enterprise's ethics
program takes on added layers of complexity. The existence of universal ethical standards and global values
are raised. This is especially problems when multinationals operate in host countries that have different
standards of business practice, are economically impoverished, whose legal infrastructure is inadequate,
whose governments are corrupt and where human rights are habitually violated. The question of ethical
relativity arises not only in the context of different home- and host-country employment practices, but also
in the central operations and policies of multinationals.
IHRM
trends
are in
four

important areas of international business ethics and the challenges they raise for HR professionals are shown
in figure below
Ethical Relativism or Global Values
For the ethical relativist, there are no universal or international rights and wrongs, it all depends on a
particular culture's values and beliefs. Thus, if the people of Indonesia tolerate the bribery of their public
officials, this is morally no better or worse than the people of Singapore or Denmark who refuse to accept
bribery.

Unlike, the relativist, the ethical absolutist (or imperialist) believes that when in Rome, one should do what
one would do at home, regardless of what the Romans do. This view of ethics gives primacy to one's own
cultural values. Opponents of this view argue that ethical absolutists are intolerant individuals who confuse
respect for local traditions with ethical relativism. It must be noted that while some behaviours are wrong
wherever, they are practiced (e.g., bribery of government officials), other behaviours may be tolerated in
their cultural context (e.g., the practice of routine gift giving between Japanese business people).

In contrast to the ethical relativist, the ethical universalist believes there are fundamental principles of right
and wrong which transcend cultural boundaries and that multinationals must adhere to these fundamental
principles or global values. However, unlike the absolutist, the universalist is careful to distinguish between
practices that are simply culturally different and those that are morally wrong.
Self-Regulation Initiatives - International Corporate Codes of Conduct
One of the most interesting initiatives in international business self-regulation is the Caux Roundtable
Principles for Business Conduct developed in 1994 by Japanese, European and North American business
leaders meeting in Caux, Switzerland. This was the first international ethics code for business and aimed to
set a global benchmark against which individuals firms could write their own codes and measure the
behaviour of their executives. The Caux principles are grounded in two basic ethical ideals - kyosei and
human dignity. The Caux principles aim to operationalise the twin values of living and working together and
human dignity by promoting free trade, environmental and cultural integrity and the prevention of bribery
and corruption.

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A common difficulty with codes of ethics is enforcement. The attitudes of senior management play a crucial
role in developing, implementing, and sustaining high ethical standards. HR professionals can help
multinationals to institutionalise adherence to ethics codes through a range of HR activities including
training and the performance-reward system.
Government Regulation - New Global Developments on the Criminalisation of Bribery
Bribery and corruption top the list of the most frequent ethical problems encountered by international
managers. Bribery involves the payment of agents to do things that are inconsistent with the purpose of their
position or office in order to gain an unfair advantage.
There has been an internationally wide movement to criminalize the practice of bribery. In 1977, the U.S.A.
enacted the Foreign Corrupt Practices Act (FCPA) to prohibit U.S. based firms and U.S. nationals from
making bribery payments to foreign government officials. In addition, payments to agents violate the Act if,
it is known that the agent will use those payments to bribe a government official. The Act was amended in
1988 to permit 'facilitating' payments, but mandates record-keeping provisions to help ensure that those
payments are not disguised as entertainment or business expenses.

In December 1996, the UN adopted the United Nations Declaration against corruption and bribery in
International Commercial Transactions, which committed UN members to criminalise bribery and deny tax
deductibility for bribes. A year later, the declaration was endorsed by 30 member nations and four non-
member nations of the OECD adopting the convention on Combating Bribery of Foreign Public Officials in
International Business Transactions (OECD) convention. Under the OECD convention came into force in
February 1999 and by mid-2002 it had been ratified by 34 of the 35 signatory countries. The OECD
convention requires sanctions to be commensurate with domestic penalties applicable to bribery of public
officials. Under the FCPA corporate fines can be up to U.S. $2 million and individual penalties upto U.S.
$100,000 and 5 years' imprisonment. HR professionals have an important role to play in instituting a
strategic plan for legal compliance and developing corporate codes for voluntary compliance.

Emerging Role of HR in Operationalizing Corporate Ethics Programs

HR has a special role to play in the formulation, communication, monitoring, and enforcement of an
enterprise's ethics program. The HR function along with finance and law is the appropriate locus of
responsibility for an enterprise's ethics program.

HR is well-positioned to make an important contribution to creating, implementing, and sustaining ethical

organizational behaviour within a strategic HR paradigm. HR professionals have specialized expertise in the
areas of organizational culture, communication, training, performance management, leadership, motivation,
group dynamics, organizational structured, and change management - all of which are key factors for
integrating responsibility for ethics into all aspects of organizational life.
Global Youth Labour Market Trends
The major trends happening across the global youth labour market are as follows:
1) The global youth labour force and labour force participation rate continues to decline as enrolment in
education increases. Between 1991 and 2014, the share of active youth (either employed or unemployed)
in the youth population declined by 11.6 percentage points (from 59.0 to 47.3 per cent) compared to a 1
percentage point decline in the adult labour force participation rate.
2) The global youth Employment-to-Population Ratio (EPR) the share of the working age population that is
employed declined by 2.7 percentage points between 2007 and 2014 (from 43.9 to 41.2 per cent). The
declining trends in youth EPRs are closely linked to increasing trends in educational enrolment.

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3) After a period of rapid increase between 2007 and 2010, the global youth unemployment rate settled at
13.0 per cent for the period 2012 to 2014 and is expected to increase only slightly to 13.1 per cent in
2015. The rate has not yet recovered its pre-crisis rate of 11.7 per cent in 2007.
4) The number of unemployed youth has declined from 76.6 million at the peak of the crisis in 2009 to an
estimated 73.3 million in 2014.
5) Globally, the ratio of youth to adult unemployment rates has hardly changed over time and stood at 2.9
in 2014. The youth unemployment rate has been consistently close to three times that of the adult
unemployment rate since 1995 (with ratios between 2.7 and 2.9).
Some insights to look upon for the HR Management Trends year 2017 are:

1. Alteration in the rules of Overtime:

The rule is proposed to raise the minimum level of salary for the white collar exemptions. Which could
result in currently working 4.6 million exempt employees losing their exemption instantly? Rest of the
500,000 to one million exempt employees working currently could lose their status of exempt in the next ten
years. This is due to the automatic increase in the threshold level of the salary.

2. Increment in the utilization of data and analytic tools:

In the present the crucial factor of managing and recognizing the competitive situations related to business
lifecycle is able with the collection, processing and analyzing of big data. To gain the increasing competitive
edge the companies must use analytics to gain data-driven insights into the workforce trends and engage to
achieve refine recruitment, performance incentives, and compensation to arrange the evolving interests and
goals of the employees. At this instant data can be pulled from a firm’s HR tech systems. Predictive
algorithms are used and applied to make decisions to hire and manage the workforce. With this, the
productivity could be increased and turnover could be decreased which is seen as a big win?

The greater focus on a significant tech trend is at the master data hr management trends. The analytics have
seen a tremendous growth in the last few years but the master data management was not present. With being
aware of analytics power the companies have also understood the need for standardization of data. Data
cannot be rolled up and analytics cannot be performed if everyone does things differently.

3. Requirement of integrated workforce management system:

For establishments with or more than 50 full time or equivalent employees an Act has transformed which
was once an annual enrollment event into the process of reporting and tracking the extensive data on a
monthly basis. To meet the terms of the law various workers in Finance, Tax, Legal, IT and HR who didn’t
share data may now need to incorporate to help avoid expensive penalties. It will be a challenge to gather the
required data from the multiple systems. Owing to this it will become more significant that a business
considers an integrated management solution for human capital. Changing the tech support models in the
HR organization would be a great help.

The HR could take it to greater level with the support of IT and Tech support. Employers still use separate
payroll, benefits administration and HR systems for management and applicant tracking which might be
appropriate for some organization but there is some disadvantages and integration seems difficult. The
employers are choosing single system for several work. Moving to single vendor who could provide all
areas of HR technology solution in a single integration.

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4. Priority- Engagement of the employee:

Gradually most of the firms are focusing on driving better performance by improving the engagement of the
employee. According to the research by Gallup the establishment’s success financially such as profitability,
productivity and customer engagement is strongly connected to employee engagement which leads to
essential outcome from business. The midsized companies require revenue, growth and innovation to thrive
which could be derived from the engaged employees. According to a study, the larger midsized companies
with 150 to 999 employees quoted three talent related reasons to find out the decline in the growth. Out of
which 23 percent were the disengaged employees, 18 percent were employees unable to attract qualified
talent and 17 percent were the employee unable to retain key talent. Organizations big concern in the last
few years is to find and keep the great talent. Employees with the ability to perform with technology would
help in development of the workforce. Organizations look for methods to engage different employee
demographics due to shifting workforces. Engaged employee with knowledge of Technology could be a
great help. Integrated systems to stand-alone systems there are various solutions available to match the
requirements of the talent in a company.

5. More Millennial:

While much of the workforce in the organization consists of the retiring generation Z on the other end the
growth of millennial workforce is indicated. According to a research approximately, half of the global
workforce would be Millennia’s by 20202. While in some companies, the majority is already millennial. The
organization that wants to hold and attract fresh talent would have to recruit the unit of digital natives. As
this generation is a tech trend it is also important to ensure that their journey right from the hiring phases to
on-boarding is supported on social and mobile platforms.

6. Merging of Business:

As for the HR trend of the year the Merging of the business would continue and the situation will continue
to stay challenging for most of the industries. More and more challenges will be raising for the organization
with Generation y on one hand and affectivity and effectiveness of the HR paired with analytics on the other
hand. Becoming the most attractive employer for the future workforce would not be easy.

7. Remaking performance reviews:

The hr management trends performance review is to better understanding of changes that needs to be done
to improve the ability to perform. The most trending topic is remaking performance reviews which include
dropping rate of performance several companies have already implemented this tactic. Some are directing it
in their firm. While few are abolishing individual bonus. Many of the companies in some time have done
interesting things to improve their performance.

8. Development in the human side of the business:

In the present vibrant business setting most organization have the ability to flourish but are instead
struggling since they don’t tap into their complete potential or empower people. The success was driven by
structure, process and encouraging employees to function like a machine. These approach needs to be
changed the success in the future would need the industry to work more on the human side of the business.
People have evolved to deal with uncertainty by the means of cooperation, collaboration and utilizing the
conflicts in a productive manner. It is essential that business encourages their employee to grow mindsets
equipped towards conversation, connection and experimentation. Curiosity is a must, we need to question

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constantly whether we are performing things simply as that is how it has been done always and acquire new
perspective to recognize potential better solutions.

The clarity of role and accountability is maintained with the help of various departments and reporting lines.
Apart from it, they also create artificial obstacles that block progress. Consolidating people into silos with
similar skills and function supports the pattern that is needed to solve simple as well as complex problems.
However, it discourages them from working with people from other department or separate from business. It
does not inspire to have any kind of conversation that would help to solve the major issues that are faced
currently. The perspective of viewing fear and failure needs to be redefined by the businesses. Most of us
allow fear to control us. One could eliminate it by taking back the control and looking behind the curtains
created by our fear that is enacted by ourselves. With more integration, fewer silos and risks success
becomes quite easy.

9. Cloud remains in the projection:

Human Resource Management moving to the cloud is hardly new concept. However, it is still in its early
stage of adaptation. Almost every major HR software dealer is offering or planning to offer its solution in
the cloud form. Cloud computing provides faster updates, increased flexibility, innovation and decrease in
the cost. The HR managers could be in relief who deal with the expense of upgrading the system each year
and downtime. As it will now be done by the vendor automatically. Oracle, ADP, Workday, SAP, Ultimate
Software and Info are included in the Core HR solutions on the cloud along with other solutions.

10. Going Mobile:

The using of the mobile app within Human Resource Management is still in its initial stage. However with
the appearance of more cloud-based apps and SaaS approach, things are changing. The Millennial
employees have great expectancy in this area. The growing use of mobile apps will ease the administrative
burden on HR and will considerably develop the usage of self-service. People involved with digital means
apply for jobs through the help of mobile devices. To attract the talents from Generation X the employer
needs to offer hiring and valuable information for mobile devices. Vendors are stepping up with attractive
interfaces and mobile games and improving the ease of use. More vendors will be witnessed taking out their
system from the mobile version of their system to mobile apps because apps tend easy navigation, provide
more functionality and are visually attractive. The Mobile apps are advantageous despite it apps pose major
data privacy issues for eg: local laws can put serious restrictions on using mobile apps for employee data.
Understanding the working environment and contributing to the success of the organization is the main role
of the HR Management Trends professional. Following the latest trends of the Human Resource
management will help the organization to thrive amongst other competitive industries. Apart from following
the trend, it is vital that significant changes in the method of Human resource management are modified
from time to time. The modern up to date techniques will not only be beneficial but also will be less
stressful. It aids in selecting the talented workforce for the business. Simply by following the significant HR
Management Trends would help the organization to maintain their hold in the industry. Operating human
resources across geographic and cultural boundaries can often prove difficult for small-business owners and
managers. Nonetheless, with the widespread use of technology, the ability to communicate with anyone
around the world and access to new and varied markets, international HR issues are important to grasp.

Compliance and  International HRM Issues

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As businesses begin to expand into the global marketplace or as they hire employees from diverse
geographic and cultural backgrounds, they may have to adapt to new labor laws and tax liabilities. Doing
business in Europe, for example, will require the business to pay value added tax. Hiring employees who are
non-naturalized US citizens might require HR to apply for work visas and report economic data to the
federal government. Compliance with international law can be an issue for the under-educated business
owner or HR manager, because these laws tend to be complex and sometimes difficult to implement.
Keeping well-informed of the legal requirements for the business’s operations can help alleviate some of
this complexity and lessen the chances of landing in legal trouble.

Scope of Human Resource Management

With an increasing number of busineses operating on an international scale, the impact of globalization on
hr can be tricky to navigate. Globalization means various laws, cultures and norms have to be taken into
consideration when onboarding and crafting HR regulations. Some countries are more forward thinking
where gender is concerned than others, and this distinction can lead to misunderstandings or worse, the loss
of key personnel. It really would not be that hard to have a male manager handle the day-to-day operations
in an area where female managers are frowned upon, just in case. Understanding the mechanism that makes
each culture tick and implementing as little or as much needed so create balance is something to strive for.

Cultural Diversity and Global HR Issues

A salient issue in international HR is understanding and maintaining cultural diversity. Working with people
from different locations or from different cultural backgrounds mean adapting the business’s work style to
new ideas, new ways of communicating and unfamiliar social practices. If you hire an employee from
England, for example, the employee might have different ideas about how to manage employees or on how
to run technology processes based on her experiences back home. Being open to new work styles and
cultural differences is the hallmark of cultural diversity in HR.

Benefits and Compensation

Benefits and compensation are the backbone of any HR strategy, but in international HR, benefits and
compensation are even more important in focusing on the work-life balance of employees. The idea behind
work-life balance is to provide employees with programs and initiatives that improve both their personal and
professional lives. This is considered part of international HR, because many multinational companies have
already implemented programs such as flexible working time, paternity leave, extended holidays and on-site
childcare. In fact, many nations around the world, including much of Europe, mandate these programs by
law. Implementing them on the local scale is one of the challenges and, ultimately, rewards of international
HR.

Training and Development

Related to the idea of benefits and compensation in international HR are training and professional
development programs. Training programs typically encompass in-house seminars and meetings designed
to give employees on-the-job knowledge of skills that are important to doing business globally. HR might
offer language classes, for example. Professional development encompasses the “extra” training that HR
provides to its employees, such as allowing them to attend networking events and conferences, global
training seminars and other specific competency-based programs. Professional development helps
employees to hone their skills in global marketing, international business development and finance trends.

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HR/IR issues in MNCs

IR Policy of MNCs: Each multinational corporation has a different approach for solving the problem of
centralisation and decentralisation of personnel management. Local culture and structure of industrial
relations have a strong influence on personnel management in its various subsidiaries. Considering the
varied differences in economic, political and legal systems across the countries, MNCs generally delegate
the management of IR. However, an overall coordination (in different degrees) from headquarters (HQ)
among the subsidiaries and branches is required, since IR activities in a specific country are required for two
reasons, which are as follows:
i) It helps the top management to oversee the IR activities" which may affect business agreement in the
international context; and
ii)HQ becomes aware of the possible IR consequences in other countries.

Empirical researches have found-out considerable differences in IR practice of MNCs across the countries.
For example, according to Hamill, U.S. firm's recognised trade unions less than U.K. firms, preferred not
to join employer associations, had more highly developed and specialised personnel departments at plant
level, and tended to pay higher wages and offered more generous employee fringe benefits than local firms.

On the basis of a number of studies, one can identify the following factors which affect the involvement
of HQ and centralisation of decision-making in terms of IR:
i) Degree of Inter-Subsidiary Production Integration: When a subsidiary must rely on a
subsidiary located in another country in terms of resource supply or marketing of finished
products, a global unified IR-policy is required for the MNCs to have a semblance of policy
among the subsidiaries.
ii) Nationality of Ownership of the Subsidiary: A number of studies have revealed that nationality of
ownership of MNCs also matters in deciding the required degree of control over the subsidiaries. For
example, Hamill has found-out that U.S. based MNCs were more centralised in IR decisions than U.K.
based MNCs.
iii) International HRM Approach: Approaches to staffing policy are: ethnocentric, polycentric,
geocentric and regiocentric. Ethnocentric staffing policy is more likely to be associated with labour
relation's conflicts. On the contrary, it has been shown that more geocentric MNCs will bear more influence
on host-country IR system, due to their propensity to participate in local events.
iv) Subsidiary Characteristics: Subsidiaries that are formed by acquiring or buy-ups of well-established
indigenous firms, require to have more autonomy over labour relations than greenfield sites freshly set- up
by the MNCs. Again, greater intervention from HQ is expected for the subsidiaries of strategic importance
and/or the subsidiaries that are recently set-up.

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v) Characteristic of Home Market: Lack of large home market is a strong incentive to adopt the host-
country norms and policies. In this context, the emergence of single European market (i.e., development of
larger home market), and consequent developments in more centralised management policy adopted by
large European companies may be referred.
2) Unions' Influence on International IR: Trade unions may influence the strategic choices of MNCs in
the following ways:
i) Influencing wage levels.
ii) Affecting the MNCs ability to vary employment levels at will.
iii) Restricting MNCs discretion of social dumping.
3) MNCs' Characteristics in Neutralising the Power of Labour Unions: The following
characteristics of MNCs are responsible in neutralising the negotiating powers of labour unions, with
regard to collective bargaining and other related issues:
i) Massive Financial Resources to Absorb Losses in a Foreign Subsidiary (s): In this case, union's
bargaining power is naturally weakened since; the MNC has no need to depend on only one subsidiary to
generate overall profit for the organisation.
ii) Options to Shift Production Units to other Countries: Since an MNC has several options to set- up and
operate its production units in various locations, job security of employees, especially at the shop-floor
level, may be at stake. This may lead to a situation where the trade union needs to compromise on certain
employment issues to ensure the employees' interest, at least to a certain extent.
iii) Distance between the HQ and Subsidiary: In case of MNCs, trade unions often face the problem for not
having direct, transparent, and timely communication. This problem arises due to the physical distance and
problems relating to difference in time zones between HQ and subsidiary locations.
4) MNCs' Strategy towards International IR: Various strategies of MNCs towards international IR
are as follows:
i) Conflict or Inflexible, Uncompromising Hostility: Management frustrates the demands of union, grants
nothing as benefits and ultimately employees do not vote for this union.
ii) Armed Truce Attitude: Union is controlled within limits. Unions hold negotiations within legal
obligations.
iii) Power Bargaining: Management acknowledges the union's power. It reaches the agreement at the
bargaining table. Focus is to live with the unions and believe in power.
iv) Accommodation: Under this approach, the management remains constantly vigilant. It follows the
traditional agenda of collective bargaining with respect to issues of wages, working hours, and
conditions of employment. '
v) Cooperation: It involves union-management participation where they jointly deal with personnel
and production problems.
vi) Collusions: The management bribes union leaders to gain bargaining table concessions. Bribes are
in the form of interest-free loans, helping with contracts to insurance agencies owned by union
officials, etc.

Conflict Management

Conflict can happen in any environment, and the workplace is certainly no different. Disputes between
employees or a direct disagreement between an employee and business owner are situations that can occur
frequently. An effective way of managing conflict is vital to the continued health of your company. One of

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the biggest issues is how the two parties talk to each other, or whether they talk at all. If there is not an easy
way for the two parties to communicate and have their issues heard, the conflict can turn into something
much worse. This can result in poor company morale or the termination of a team member.

Consider using a system that allows for consistent, efficient communication between team members and
insist that this is the way they must communicate if a conflict arises. When you make this a policy, you can
avoid gossip and misunderstandings. You can also ensure that employees always feel that their issues are
heard.

Hour and Wage Issues

Do you find that issues often crop up around payday? Do employees tend to dispute the number of hours
they worked or insist on overtime that you don’t think is accurate? Do you or your HR time find that you
have to go over time sheets or attendance records to check details? To avoid federal wage and hour
violations and to reduce the possibility that employees will dispute their paychecks, consider self-service
timekeeping software that allows them to clock in and out from their smart devices. This encourages
employees to keep track of and manage their own schedules by providing an efficient way to do so. It can
also help with scheduling to prevent unnecessary overtime or to make sure the employees in the right pay
grade perform the correct jobs.

Adequate Safety in the Workplace

It’s every business owner’s worst nightmare to have an injury or accident happen to one of their employees
while they are on the job. Promoting safety in the workplace should be a top priority of every business
owner. This should be true no matter what industry they are in. This includes making sure all proper safety
equipment is used and that the right security measures are put in place.

A good policy should also ensure that employees are not overly fatigued due to too many overtime shifts.
Having software to track schedules can help HR managers ensure that employees have plenty of rest time.
This helps reduce over-scheduling to the point of creating an unsafe work environment.

Annual Leave Disputes

Do your employees know that the company’s leave policy is? Are you sure your policy is in accordance with
state and federal laws? If your answer is no to either of these questions and you are not currently using leave
management software, you could open the door to annual leave disputes.

Consider leave management software that helps you create a legal and transparent leave policy that leaves
no room for dispute. Provide every employee with easy access to this policy. This type of software can also
help your employees talk with HR managers about leave requests and adjustments.

Timekeeping and Attendance Issues

Do you require your employees to come into the home office and clock in or out every day? Do you find
that many of them become lax on the issue, or that they have their co-workers ‘buddy punch’ them in when
they’re running late? Timekeeping and attendance issues are common, and you can eliminate many of them

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by utilizing employee self-service software. Allowing employees to keep track of their time and
communicate about attendance issues right from their smart devices reduces the chances for conflict and
provides them a handy benefit. Having an effective employee relations plan in place will help you in
numerous ways. You can avoid federal wage and hour violations, promote safety in the workplace, assist
with schedule management, and give team members an easy way to communicate. This is an excellent way
to ensure you promote an efficient and engaging work environment for your employees.

Issue 1: Who should handle Labour Relations: Headquarter or the subsidiary in the concerned country
The national dissimilarities in economics, political, and legal systems create diverse labour-relations system
across countries, MNCs HQs typically delegate the control over labour relations to their foreign subsidiaries.
Having said that, the participation of the MNC headquarters in host-country labour relations is impacted by
4 key elements:

1. In case there is a high level of inter-subsidiary production integration,the labour relations function is
centralised and is coordinated by the head quarter.
2. The nationality of ownership of the subsidiary has an influence on who should take care of employee
relations.
3. Furthermore, subsidiary character has a bearing on who should deal with employee relations.
4. Finally, where a subsidiary is dependent more on its parent company for resources, you will see a greater
corporate involvement in labour relations.

Issue 2: Trade Union Tactics

Trade Unions make use of a number of tactics to deal with international business:
1. The most common one is ‘strike’. A strike is a concerted and temporary suspension of work, intended to
put pressure. Unions should be cautions prior to resorting to a strike in international scenario because the
bargaining power of a union could possibly be threatened or weakened by the financial resources of an
MNC. This is especially evident where a multinational firm uses transnational sourcing and cross
subsidization of its products or parts across different international locations.

2. Form International Trade Secretariats (ITSs):  There are Fifteen ITSs who help the exchange of
information. Main objective of ITSs is to accomplish transactional bargaining with the MNCs.
3. Lobbing for limited national legislations – Trade unions have for several years lobbied for
restrictive national legislation in the U.S. and Europe. Trade unions pursue restrictive national legislation to
avoid the export of jobs via multinational investment policies.
4. Intervention from the global body like ILO, UNCTAD, EU, OECD: ILO has issued guidelines
which cover disclosure of information, competition, financing, employment, industrial relations, taxation,
science and technology.

Issue 3:  Political

There is little doubt that national industrial relations (IR) systems continue to be greatly different. There are
3 faces of industrial relations which the international union movement encounters in the international
environment, specifically social democracy, neo-liberal and authoritarian. The dissimilarities in national
industrial relations systems are also mirrored in the structure, power and status of individual actors in the
system. For example trade unions maintain a comparatively strong position within the Scandinavian IR
model while their role is a lot more limited in the US context. The international labour movement is usually

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prohibited direct access to robust intergovernmental establishments like the WTO. So they have to depend
on national government to  represent their interests to these institutions. Significantly, the interests of
government might not always be directly in-line with the union movement.

Issue 4: Social and Identity

A key problem with the international labour movement and specifically international collective bargaining is
the absence of identity that individual workers have with their international associates. Additionally they see
these peak associations to be a lot more conservative than activists at the local level. Associated with this
point, there is a common lack of solidarity between actors at a national level. Additionally, there are
endemic cultural, social and language differences among individuals in different countries resulting in
lowering the degree of a shared identity between workers on an international level.

Issue 5: Power and knowledge

While labour’s power continues to be local in scope, capital has grown to become more global in nature and
decisions effecting workers are increasingly being made at a supra-national level. The locus of
Multinationals decision making stretches beyond national borders and key facts are seldom transparent or
accessible to trade unions. Additionally the well-rehearsed point that multinational organizations can counter
the strength of local unions by threatening to move manufacturing to another place so that they can out
manoeuvre trade unions or following threats of industrial action is significant.

Corporate Social Responsibility

Corporate responsibility describes positive ways through which multinational companies may affect the
society in which they operate. The World Bank and the World Business Council on Sustainable
Development (WBCSD) define CSR as “the commitment of business to contribute to sustainable economic
development – working with employees, their families, the local community and society at large to improve
their quality of life, in ways that are both good for business and good for development”

In today's socially conscious environment, employees and customers place a premium on working for and
spending their money with businesses that prioritize corporate social responsibility (CSR).

As the use of corporate responsibility expands, it is becoming extremely important to have a socially
conscious image. Consumers, employees and stakeholders are beginning to prioritize CSR when choosing a
brand or company. They are holding corporations accountable for effecting social change with their business
beliefs, practices and profits.

The significance of corporate responsibility has become increasingly important because of (UNIDO, 2002,
p.1):

 Globalization and the growth in competition

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 Increased size and influence of companies
 Retrenchment or repositioning of government and its roles
 War for talent; companies competing for expertise
 Growth of global civil society activism
 Increased importance of intangible assets

Over the past decades, a fundamental change occurred in the relationship between business and society, and
corporate responsibility activities have become an important part of the business environment. So far, CSR
has mainly been a response to pressure from consumers, civil society, large enterprises and governments
which have forced companies to become more environmentally and socially responsible due to
environmental pollution, human rights abuses and exploitation of labor in supply chains. In the meantime,
multinational companies have realized strategic importance of being further responsible. A major problem is
that the corporate responsibility debates have been mainly focused on the large MNCs behavior and their
impact on developing countries and emerging markets. It should be highlighted that attempts are increasingly
being made

To widen the scope and to include SMEs, as well as to motivate domestic companies in developing countries
to include CSR in their strategies. This point is crucial since many SMEs do not have the adequate
technology, environmentally friendly inputs, credit, information and training, and this often prevents social
and environmental progresses .Multinational companies are offering to the host country, not only their
products and services, but also their business standards, values and principles and codes of conduct. There
seems to be potential for these practices to be adopted by domestic companies but there is a need for such
incentives to come from Vietnamese companies themselves. The government can work as a catalyst and play
a crucial role by viewing CSR and codes of conduct as cost-effective ways to enhance sustainable
development strategies and as measures to compete on the world arena. This requires a transparent and
accountable government that is a good example to follow by being socially responsible. CSR boards that
include government, civil society and businesses at national and regional levels can work as intermediaries
and spread information and sustainable ways of thinking. The non-democratic one-party system in Vietnam
that controls both trade unions and the media hinders these possibilities as it is neither transparent nor
democratic. Vietnam’s membership in international institutions such as the WTO will hopefully shed new
light on such problems and thus force the government to review its procedures and legal framework .
Corporate responsibility types your business can practice

Recognizing how important socially responsible efforts are to their customers, employees and stakeholders,
many companies now focus on a few broad CSR categories:

1. Environmental efforts: One primary focus of corporate social responsibility is the environment.

Businesses, regardless of size, have large carbon footprints. Any steps they can take to reduce those
footprints are considered good for both the company and society.
2. Philanthropy: Businesses can practice social responsibility by donating money, products or services
to social causes and nonprofits. Larger companies tend to have a lot of resources that can benefit charities
and local community programs. It is best to consult with these organizations about their specific needs
before donating. 
3. Ethical labor practices: By treating employees fairly and ethically, companies can demonstrate
their social responsibility. This is especially true of businesses that operate in international locations with
labor laws that differ from those in the United States.

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4. Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good
deeds without expecting anything in return, companies can express their concern for specific issues and
commitment to certain organizations.

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 organization 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 organization’s mission, values, and principles, and to link them
with standards of professional conduct. Codes of conduct typically set guidelines on issues including
child labor, 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 organization or a business in any industry. In addition to performance
standards, an organization 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 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 organized into environmental, financial, and social dimensions.

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 organization. Due to the fact that CSR is a
voluntary activity, it is difficult to completely regulate what is being done the organization, 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 hot be able to confirm whether or not the fund has
been properly used or if the programme itself is operational.

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

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