05. Ethical Practices in Global HR Management

Introduction

As they grow internationally, organizations face a variety of legal, cultural, and social conventions that might present ethical difficulties. To ensure fair treatment and compliance, managing human resources in a global setting necessitates striking a balance between local customs and universal ethical norms.

A decision-making flowchart showcases the balance between local norms and universal ethics. Each step guides the decision-maker through evaluating whether a practice aligns with universal ethics, how to consider cultural norms, and whether to proceed, adapt, or avoid the action.

Theories

1. Utilitarianism vs. Deontology:
• Utilitarianism (Bentham, 1789): Ethical actions are those that maximize overall happiness. In HR, this might involve prioritizing decisions that benefit the majority, such as restructuring to preserve the company’s long-term health.
• Deontology (Kant, 1785): Focuses on duty and principles, such as respecting employee rights regardless of outcomes.
2. Triple Bottom Line (Elkington, 1994):
• Emphasizes the balance of profit, people, and planet. This framework encourages companies to consider social responsibility alongside financial performance.

A timeline of Nike’s journey from controversy to leadership in ethical practices

Case Study: Nike’s Response to Sweatshop Allegations
In the 1990s, Nike faced global criticism for unethical labor practices in its supply chain, such as poor working conditions and low wages in factories overseas.

• Initial Challenges: Public backlash damaged Nike’s brand reputation.
• Actions Taken:
• Implemented stricter labor codes of conduct.
• Partnered with NGOs to audit factories.
• Increased transparency by publishing factory data.
• Outcome: Nike restored trust and became a leader in sustainable and ethical practices.

Practical Implications

• Global HR policies must consider ethical considerations, including fair wages, non-discrimination, and workplace safety.
• Regular audits and stakeholder engagement can help ensure ethical compliance.
• Training HR teams on cultural and ethical nuances in different regions is essential.

What is Global HRM? 

References

• Bentham, J. (1789). Introduction to the Principles of Morals and Legislation.
• Elkington, J. (1994). Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development.
• https://www.youtube.com/