Ethics in Business Practice: Human Resource Management

Abstract

As human resource managers and organizational leaders strive to build high-trust organizational cultures, those who guide their organizations must carefully assess not only the implicit and explicit assumptions of their own social contracts but must also carefully tune in to the perceptions of others. Ethical duties owed in responding to complex issues are encompassed in a stewardship obligation that rises to the standard of a covenantal relationship. Ethical leadership provides a valuable framework for examining the subtle nature of ethical obligations owed to stakeholders and reflects the growing importance of business leaders understanding the implications of their moral choices.

There cannot be a situation where a businessman says, “I base all my business on moral considerations.” Equally, you can't say you can run a business without morality.

Sir Timothy Bevan (1927–), British banker, said as Chairman of Barclays Bank Ltd, when asked about Barclays’ withdrawal from South Africa.

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

FormalPara Learning Objectives

Globalization has brought about the concept of globalizing labor, trade unions have started to decline, and the role of HR as such in issues like employee policies and practices has become a debatable topic. In fact, many people are of the opinion that HR is nothing but an arm of the stakeholders through which major strategic and policy decisions are divulged geared towards profit making! Though there can be no single opinion on ethics in HR that is convincing. Market in itself is neither an ethical institution nor unethical, and no policies and procedures alone cannot govern and align markets to human well being. However, the requirement of such policies and procedures can also not be denied. In lieu of this, HR ethics should take care of things like discrimination (sexual, religion, age, etc.), compensation, union and labor laws, whistle blowing, and health and safety of the employees.

Human resource management (HRM) within an international context has grown exponentially within the past three decades with the advent of the World Wide Web and the worldwide increase in the availability of information (Taylor 2007). Competing within a global market has created major economic pressures on organizations, not only because of the costs and competencies required to expand into new markets but as competing international firms expand into one’s own existing markets (Hill 2008). Sparrow and Brewster (2006) emphasized that being globally successful includes being (1) competitive throughout the world; (2) responsive locally; (3) flexible, timely, and adaptive to change; (4) efficient; and (5) capable of transferring knowledge and the ability to learn across globally dispersed units.

Within this internationally competitive economic context, Pfeffer (1998a) has argued that high-performance/high-trust work systems can make a meaningful contribution. The “high-performance work organization” is a business concept coined by the US Department of Labor (1993:1) to encourage American businesses to be creative, adaptive, and effective in problem solving in response to an increasingly competitive global marketplace. Research on high-performance management systems have their roots in Peters and Waterman’s (1982) business classic, In Search of Excellence, Walton’s (1985) discussion of high commitment management, and Lawler’s (1986) description of high involvement management.

The seven specific management practices of high-performance management systems include:

• 1. Employment Security – Providing employees a safe work environment addresses a crucial human need for safety against possible threats (Nohria et al. 2008:81) and substantially increases the likelihood that employees will be committed to the improvement of productivity without fearing that they are working themselves out of a job (Locke 1995). A company that commits to creating job assurances for employees is also more likely to implement improved selection and hiring practices “because the firm knows it cannot simply let people go quickly if it has overestimated its labor demand” (Pfeffer 1998a, b:67). The management downsizing literature confirms that downsizing results in minimal economic benefits while increasing organizational distrust and lowering morale.

• 2. Selective Hiring of New Personnel – Collins (2001:41) discovered in his study of great organizations that they “get the right people on the bus, the right people in the right seats, and the wrong people off the bus.” Screening for cultural fit and employee attitude from among a broad pool of well-qualified applicants is critical to hiring people who fit an organization’s needs (Pfeffer 1998a, b:74). Enterprise, the fast-growing car rental agency, emphasizes screening applicants based upon attributes that are difficult to change through training and hires its employees based upon basic ability and attitude rather than on technical qualifications which are often easily acquired (O’Reilly 1996).

• 3. Self-Managed Teams and Decentralized Decision Making – Empowering employees is increasingly important in a knowledge-, service-, and wisdom-based economy that requires employees to take initiative and discretionary action in delivering customized service (Covey 2004). Self-managed work teams are “a critical component of virtually all high performance management systems” and results in increased autonomy, job satisfaction, and productivity (Pfeffer 1998a, b:74). Boonzaier and colleagues (2001:12) noted that increased autonomy and discretion substantially improve organizational outcomes and build increased commitment which is the key to long-term wealth creation (Senge 2006).

• 4. Comparatively High Compensation Contingent Upon Organization Performance – Reward systems that contribute to corporate-wide performance and that focus on contributions that distinguish companies from their competitors not only make it possible to successfully compete for key employees who make a critical difference but provide a foundation for meaningful employee incentives that match the organization’s ability to share profits with those who contribute to financial success (Boudreau and Ramstad 2007). Compensation systems communicate to employees whether they are truly valued or whether the organization is merely giving lip service to the importance of employees while treating them as a commodity rather than as a valued asset (Pfeffer 1998a, b:80). Nucor Steel is an outstanding example of a company that offers employees contingent pay, often paying employees more in bonuses than they make in base salary each quarter (Marks 2001:112–113).

• 5. Training – Investing in employees as valued assets in a knowledge-based economy pays off in huge dividends when that training is carefully planned and delivered – particularly in problem solving and in quality improvement (Pfeffer 1998a, b:85). Investments in both technical and nontechnical training have a positive impact on a firm’s success in developing knowledge and skills (Fey and Bjrokman 2001:62). Improving the skills of employees in addressing customer needs and eliminating the causes of customer complaints can result in improved long-term profitability and a strategic competitive advantage that is difficult to duplicate (Pfeffer 1998a, b:300–301; Yagiela and Munson 1997). Measuring the return on investment from training is increasingly being recognized as a critical management responsibility in a world where knowledge and information have exploded exponentially (Bersin 2006).

• 6. Reduced Status Distinctions and Barriers – Factors such as dress, language, office arrangement, and wage differentials are being relaxed in many high-performance organizations to create a culture that treats employees throughout the organization more equitably and to acknowledge the role of employees as “owners and partners” (Block 1996). Affirming the importance of people as the source of organization success includes incorporating language that treats all employees with dignity and respect. Providing access to organizational leaders and empowering employees with the opportunity to add their voices in decentralized decision-making processes create a culture that is people oriented and that models the virtues of leadership trustworthiness.

• 7. Sharing Information – Creating a transparent organization that shares key information with employees not only sustains a high-trust culture but enables employees to legitimately contribute to organizational decision making (Bandsuch et al. 2008). Training people to play a key role in the organization requires that employees possess the critical information necessary for them to make well-informed and intelligent decisions.

As human resource managers and organizational leaders strive to build high trust organizational cultures, those who guide their organizations must carefully assess not only the implicit and explicit assumptions of their own social contracts but must also carefully tune in to the perceptions of others (Caldwell and Hayes 2007; Van Buren and Greenwood 2008). Ethical duties owed in responding to complex issues are encompassed in a stewardship obligation that rises to the standard of a covenantal relationship (Pava 2003). Hosmer’s (2008) model of ethical leadership provides a valuable framework for examining the subtle nature of ethical obligations owed to stakeholders and reflects the growing importance of business leaders understanding the implications of their moral choices.

In his highly regarded text, The Ethics of Management, LaRue Hosmer (2008:13) argued that “an ethical principle is meaningless unless it can be applied” and defines business rules as “a method of moral analysis that … would be in the interest of society under all conditions and/or situations.” But Hosmer (2008:5) also noted that moral standards “differ between peoples because the goals, norms, beliefs, and values upon which they depend also differ, and those goals, norms, beliefs, and values in turn differ because of variations in the religious and cultural traditions and the economic and social situations in which the individuals are immersed.” Hosmer clearly understood today’s global business environment that is characterized by constant change, complexity, and uncertainty (Cameron 2003:186).

To resolve the conflicts that inevitably occur in making morally responsible decisions, Hosmer (2008:9–15) posed a series of six steps to follow as a framework for evaluating those decisions:

• 1. Recognize the Moral Impacts – To recognize the moral impacts of a choice, four issues should be addressed. First, what individuals or groups are going to be benefitted by the implementation of the decision and what is the financial or personal benefit expected? Second, who will be harmed by the implementation of the decision and what is the financial or personal nature of those harms? Third, who will be able to more effectively exercise their rights as a result of the proposed action? Fourth, whose rights will be denied as a result of the proposed action?

• 2. State the Moral Problem – Defining and precisely articulating the moral problem clarifies the nature of the decision so that it can be effectively communicated without overlooking any stakeholder’s interests. Framing the moral problem as an extended question also acknowledges the concerns of others and validates their interest in decisions to be made. Those concerns, specifically identified as costs, harms, or loss of the rights of one party and benefits accruing to another, can then be carefully addressed in the analysis, discussion, and ultimate conclusions drawn from the development of solutions. Hosmer (2008:9) noted that people from differing backgrounds and cultures view the same issue through their individual lenses and may arrive at substantially different conclusions as to the nature of the moral problems involved because of their culturally based values and assumptions.

• 3. Determine the Economic Outcomes – Economic outcomes accrue as a net benefit over harms for a full society within the context of an open and free market. The economic assumption is that benefits are determinable in the preference expressed for goods and services, in utilizing the money, time, and raw materials of society to maximize societal wealth efficiently. The assumptions implicit in Hosmer’s assessment are (1) all markets must be free, (2) all laws must be obeyed, and (3) all costs must be included in determining economic benefits. Supporting this same position, Hausman and McPherson (1993:673) have argued that virtually all economic choices have a moral outcome and that the morality of economic agents influences their behaviors as well as economic outcomes.

• 4. Consider the Legal Requirements – Legal requirements in moral analysis balance the rights that are empowered or exercised versus rights denied. These legal requirements seek to determine that which is most equitable or evenhanded within the framework of a Veil of Ignorance (i.e., determining fairness and the balance of rights versus wrong if everyone considered the laws to adopt while ignorant of their own self-interests). Hosmer acknowledged the difficulty of focusing on the self-interest of all of society but argued that this Veil of Ignorance model is ideal for evaluating the efficacy of laws. Nesteruk (2004:306) has noted that legal and moral issues are historically intertwined in the analysis of workplace issues.

• 5. Evaluate the Ethical Duties – In assessing ethical duties, moral analysis encompasses obligations owed by members of society to others within that society and often balances personal self-interests with the impacts of actions on society. Ethical duties provide a set of rules that benefit society under multiple scenarios. Although there are many ethical perspectives which call out slightly different outcomes, Hosmer proposed that the essence of morality can be summarized by six universal rules. The table below briefly explains these six universal rules.

  Ethical perspective	Explanation of argument	Summary of the rule
  Personal virtues	We may each do as we wish and follow our own self-interests as long as we adopt a set of standards for “right,” “just,” and “fair” treatment of others. We ought to do that which makes us proud of our actions and of our lives	Never take any action which is not honest, open, and truthful which you would not be proud to see reported in national newspapers and network television
  Religious injunctions	We also ought to live to show compassion and kindness towards others. Both reciprocity and compassion build a sense of community	Never take action that is not kind and that does not build a sense of community in working together for a commonly accepted goal
  Utilitarian benefits	We need to evaluate acts in terms of their societal impact. An act is “right” if it leads to greater net social benefits than social harms	Never take any action that does not result in greater good than harm for society
  Universal rules	We need to eliminate the self-interest of a person who evaluates a given situation by universalizing this decision process. Choices should be based upon actions that others in a similar situation would be encouraged to take	Never take any action that others in the same situation would not be free or even encouraged to take
  Distributive justice	We need rules that protect the poor and uneducated who lack power or the position to achieve their interests	Never take any action in which the least among us would be harmed
  Contributive liberty	We need to protect individuals from extremes of the constraints of the law and markets. No one should interfere with the rights of others to seek to improve their legal abilities or their marketable skills	Never take any action that would interfere with other’s rights for self-improvement or self-development

• 6. Propose a Moral Solution – A proposed moral solution must specifically identify the stakeholders affected; the moral issues to be considered; and the corresponding benefits, harms, and associated rights impacted. Management practitioners (DePree 2004) and scholars (Caldwell and Karri 2005; Cameron 2003) have noted that moral solutions must not only positively impact the welfare, growth, and wholeness of all stakeholders but must also contribute to societal wealth creation.

Hosmer’s (2008) model provides a framework for evaluating a broad variety of business domains, including the key issues of international human resource management. Following this model enables moral decision-makers to craft a solution that is transparent in its articulation of impacts and that facilitates objective discussion of the tacit values, beliefs, assumptions, and goals associated therewith.

Integrating the Hosmer (2008) framework of ethical management with high-performance work systems applies within an international context, just as those concepts apply within businesses that primarily do business solely within the USA or within any other single country. In this section, we identify five important human resource-related propositions about high-performance systems that have critical moral implications for employees and other stakeholders.

As human resource managers and organizational leaders strive to build high trust organizational cultures, human resource professionals must carefully assess not only the implicit and explicit assumptions of their own social contracts but must also carefully tune in to the perceptions of others (Caldwell and Hayes 2007; Van Buren and Greenwood 2008). Ethical duties owed in responding to complex issues are encompassed in a stewardship obligation that rises to the standard of a covenantal relationship (Pava 2003). Hosmer’s (2008) model of ethical leadership provides a valuable framework for examining the subtle nature of ethical obligations owed to stakeholders and reflects the growing importance of business leaders understanding the implications of their moral choices.

FormalPara Case Study One: Sexual Harassment at Infosys: Reka Versus Phaneesh and Infosys

Phaneesh was an integral part of Infosys’ success story. While Chairman and Chief Mentor Narayana Murthy and a few others established Infosys in India back in 1981, Phaneesh successfully set up the company’s overseas businesses.

He was often called the “other Murthy” of Infosys and had many admirers within and outside the company. Not surprisingly, he was the highest paid executive in the company with a take home package of Rs 20 million. Belonging to a middle-class South Indian family, Phaneesh graduated from one of India’s premier business schools. Before joining Infosys, Phaneesh was working with another software company, Sonata Software, as a regional manager. He was said to be one of the main reasons for the company’s good performance. In 1992, Phaneesh joined Infosys, then a $ 2 million company with a negligible presence in the USA. Within 3 years, Phaneesh became the head of sales at the company, and in 1996, he was made the head of worldwide sales.

Even as uncertainty about the outcome of Reka’s suit continued, Phaneesh seemed to have moved on. Media reports mentioned how many IT companies in India were trying to lure him to work for them. It was also reported that Phaneesh was planning to promote his own business process outsourcing (BPO) firm. Infosys meanwhile issued a press release that categorically stated that Phaneesh would not be taken back after the case was settled. In December 2002, Phaneesh and his wife Jaya Murthy launched Primentor (in California), an advisory firm, to outsource consulting for clients and vendors.

For clients, the services were to include partner/vendor selection, deal structuring, and ongoing contract administration; for vendors, the services were to include strategy consulting, service definitions, brand consulting, blueprints for the future, sales, and account management training…At the press conference, Narayana Murthy, Nilekani, and Mohandas Pai (among others) made public the entire sequence of events in the case. Firstly, Narayana Murthy made it very clear that Phaneesh was very much a party to the settlement deal and that he had signed the documents himself. Also, Infosys had reserved the right to proceed against him for his conduct and for the fact that he did not contribute financially to the settlement. Nilekani said that Phaneesh had first mentioned the lawsuit to him in January 2002, portraying it as a very minor issue.

Recollecting the events, Nilekani said, “He told me he was innocent and that the charge was without merit, and the company was not at risk. He did not tell me anything else about the relationship or the other matters of things being filed against the company.” However, when the issue became more serious in June 2002 and Infosys was served a legal notice, the company’s board stepped in.

Infosys Moves On

At the press conference, Narayana Murthy did not answer a question about the fact that Reka did not seek redressal of her grievances through the company’s internal systems. However, his refusal to answer did not necessarily mean that the company’s internal systems were still not equipped to handle such problems.

In fact, Infosys had taken several measures to strengthen its grievance redressal procedures and had designed and implemented an effective sexual harassment policy. Narayana Murthy said, “The litigation is behind us. We have taken further steps to strengthen our internal processes and improve the checks and balances to handle similar situations.” Mohandas Pai added, “We have conducted several training programs, widened the dissemination of information and met employees on this issue.” Infosys conducted a course for all its officers and members (in India as well as abroad) on sexual harassment and the importance of being sensitized about the issue. The code of conduct provided in the employee manual was modified in line with the above decision.

Lessons to Be Learned

Though out-of-court settlements were the norm for most workplace sexual harassment suits the world over, it clearly was not the best solution. Instead of addressing the problem, this solution simply paid off the victim, so that the accused could walk away. The larger issue of the emotional, physical, and financial damage caused to the victim could be dealt with only if strict policies and guidelines regarding sexual harassment were established by the companies for a note on preventing sexual harassment at the workplace.

1 Glass Ceiling Effect in HRM: The Discrimination

In economics, the term glass ceiling refers to situations where the advancement of a qualified person within the hierarchy of an organization is stopped at a lower level because of some form of discrimination, most commonly sexism or racism.

Sexual discrimination was outlawed in the USA through the Civil Rights Act of 1964 in the hopes of allowing women to rise in the working world once proper experience has been achieved.

The term “glass ceiling” has been thought to have first been used to refer to invisible barriers that impede the career advancement of women in the American workforce in an article by Carol Hymowitz and Timothy Schellhardt in the March 24, 1986, edition of the Wall Street Journal. However, the term was used prior to that; for instance, it was utilized in a March 1984 Adweek article by Gay Bryant. The term glass ceiling was used prior to the 1984 article by two women at Hewlett-Packard in 1979, Katherine Lawrence and Marianne Schreiber, to describe how while on the surface there seemed to be a clear path of promotion, in actuality women seemed to hit a point which they seemed unable to progress beyond. Upon becoming CEO and chairwoman of the board of HP, Carly Fiorina proclaimed that there was no glass ceiling. However, the term was used by the US Department of Labor in 1991 in response to a study of 9 Fortune 500 companies. The study confirmed that women and minorities encountered considerable glass ceiling barriers in their careers; these barriers were experienced earlier in their professions than previously thought.

Senator Hillary Clinton used the term glass ceiling in her concession speech as she withdrew from the 2008 democratic primary: “And although we weren’t able to shatter that highest, hardest glass ceiling this time, thanks to you, it’s got about 18 million cracks in it.”

Types of glass ceiling barriers:

• Different pay for comparable work

• Sexual, ethnic, racial, religious discrimination, or harassment in the workplace

• Lack of family-friendly workplace policies (or, on the flipside, policies that discriminate against gay people, nonparents, or single parents)

• Exclusion from informal networks, stereotyping and preconceptions of women’s roles and abilities, failure of senior leadership to assume accountability for women’s advancement, lack of role models, lack of mentoring

• Requiring long hours for advancement, sometimes called the hourglass ceiling

2 Survey on Glass Ceiling

Major research into the existence of the “glass ceiling” began with “Breaking the Glass Ceiling: Can women reach the top of America’s largest corporations?” and was sustained through the across-industry study by the Federal Glass Ceiling Commission from 1991 to 1996 and continues with the work of organizations such as Catalyst and Boston College. Reports of the Federal Glass Ceiling Commission (1995a, b) provide disturbing statistical evidence: 95 % of senior managers of Fortune 500 service and Fortune 1,000 industrial companies are men. In the Fortune 2,000 companies, only 5 % of senior managers are women. These numbers present a statistical profile that is troubling when we consider that the percentage of bachelor’s degrees earned by women rose from 35 % in 1960 to 50 % in 1980 and to 57 % in 2000. Similar growth exists at the master’s degree level: from 32 % in 1960 to 50 % in 1980 and 58 % in 2000. In contrast, the rate of growth is even greater for women earning business degrees. At the bachelor’s level, the percentage rose from 7 % in 1960 to 34 % in 1980 and 50 % in 2000. At the master’s level, the percentage of degrees earned by women went from a low of 4 % in 1960 to 22 % in 1980 and 40 % in 2000 (US Department of Education 2002). Therefore, more women are graduating from college, more women are earning degrees in business, but their presence in senior management is negligible. Despite comprising more than two-thirds of the population and more than 57 % of the labor force in 1995, women were underrepresented at upper levels of management. This representation of women in management suggests that at executive levels, we would see a similarly strong representation of women. Contrary to their presence at middle management, women comprise only 5 % of executive suites. The data have not improved, for while women now make up more than 45 % of the labor force, they represent only 12 % of all corporate officers (Catalyst 1999). Women are graduating and entering management positions, yet there is a bottleneck at middle management levels (Current Population Survey (2001) http://ferret.bls.census.gov). Women experience glass-ceiling effects that keep them from climbing corporate ladders to levels above middle management. As more women graduate with business and other professional degrees and enter corporate life, the problem becomes more urgent as they experience a slower progression compared to their male counterparts (US Department of Education 2002; OECD 2002). So, while entry is easier, progression slows, and in most situations regardless of their qualifications or achievements, women are prevented from climbing the corporate ladder to the top. Thus, the glass ceiling describes an organizational level beyond which female managers are not promoted even though they are as qualified as their male counterparts.

Women consistently work longer hours (paid plus unpaid) than men and perform the majority of the unpaid household work (Crittenden 2001). Thus, women attempting to move into senior management are challenged not only by being parents but also by the fact that women work longer hours without the requisite remuneration and reward of upward promotion. Now added to workplace stress from inequity, we have a disproportionate distribution of household tasks. Women at the highest executive levels experience more obstacles than both their male counterparts and than lower-level women. Executive women and men are similar in many ways, including pay grade and work attitudes. Yet, these women differ from executive men in that they have less authority, receive lower total compensation, have less international mobility, and have greater pressures from family demands (Catalyst 2003a; Federal Glass Ceiling Commission 1995a; Lyness and Thompson 1997). The Families and Work Institute, Catalyst, and The Boston College Center for Work and Family conducted a study of women and men executives at multinational companies. “Leaders in a Global Economy: A Study of Executive Women and Men” (USA) found that “women at reporting levels closer to the CEO are more likely to have children and less likely to have decided not to have children than women executives at lower levels, when differences in age are controlled statistically. Moreover, these higher-ranking women are no more likely to have delayed or decided against committed relationships than women in lower status executive jobs.” Specifically:

• 18 % of women versus 9 % of men have delayed marriage or a commitment to a partner, and 3 % of women versus 1 % of men have decided not to marry. Currently, 94 % of men are married or in couple relationships compared with 79 % of the women.

• Executive men and women have lives at home that are very different from one another: 74 % of women surveyed have a spouse/partner who is employed full-time while 75 % of men surveyed have a spouse/partner who is not employed.

• 35 % of women versus 12 % of men have delayed having children, and 12 % of women versus 1 % of men have decided not to have children. Currently, 90 % of men executives have children compared with 65 % of women executives.

The glass ceiling is a pervasive barrier to the advancement of qualified women in management. Among these women, there exists person factors that render the glass ceiling even more impenetrable; race has been long associated with both inability to enter and restriction from the executive suite. African-American women often describe the barriers blocking their career advancement as the “concrete ceiling.” Women of color, African-American and Latinas, are less likely than white women to move into the executive suite (Federal Glass Ceiling Commission 1995a, b). African-American women are the most underrepresented group of women in private sector management despite the growth of this talent pool between 1991 and 2001 (Perspective May 2004). The removal of barriers requires both societal and organizational efforts to ensure that women are not discriminated against because they are women. Strategies are needed that enable women to be viewed as the qualified professionals that they are. Structural barriers must be monitored and removed; biased attitudes must be identified and controlled by individual and organizational policies. The Commission recommended that to make full use of the nation’s capital, business should demonstrate CEO commitment to workforce diversity; include diversity in all strategic plans and hold line managers accountable for progress; use affirmative action as a tool; select, promote, and retain qualified individuals; prepare minorities and women for senior positions through expansion of access to core areas of the business, formal mentoring programs that provide career guidance and support; educate the corporate ranks to encourage merit-based practice and behavior; and initiate work/life and family-friendly policies. And finally, business should adopt high performance workplace practices. Those eight recommendations to business share an emphasis on organizational context, addressing the question: What are the organizational factors affecting women’s managerial careers? The underlying perspective appears to come from an understanding that organizations have not been gender neutral, that discriminations have been institutionalized and must be unveiled and eradicated.

Appropriate research is necessary to monitor and to understand the glass ceiling. Yet, the best expression of inclusion is the removal of structural and pipeline barriers. At the firm level, leaders should demonstrate commitment to inclusion through specific actions. They should adopt high performance workplace practices. Leaders should build and communicate the business case for diversity. Accountability structures and measures to advance a diverse workforce should be developed, diversity should be included in all strategic plans, line managers should be held accountable for progress, and the corporate ranks should be educated to encourage merit-based practice and behavior. Minorities and women should be prepared for high visibility, high-impact, and senior positions through the expansion of access to core areas of the business, formal mentoring programs that provide career guidance and support. Work/life and family-friendly policies should be initiated. And finally, selection, promotion, and retention practices of qualified individuals should be through objective and unbiased workplace practices (Bryan 1998; Federal Glass Ceiling Commission 1995a, b; Catalyst 2003a, b).

Case Study Two: Indian Women in Banking Industry: Breaking the Glass Ceiling

As an Indian, one would not have missed out on these known names at all, and some of these names would be familiar internationally as well. Chanda Kochhar, CEO and MD of ICICI Bank; Neelam Dhawan, MD, Hewlett-Packard, India; Shobhana Bhartia, chairperson and editorial director of HT Media; Preetha Reddy, MD, Apollo Hospitals; Kiran Mazumdar Shaw, chairperson, Biocon; Naina Lal Kidwai, country head, HSBC; Indra Nooyi, CEO, PepsiCo; Radhika Roy, MD, NDTV; Chitra Ramakrishna, Deputy MD, NSE; Aruna Sundararajan, CEO, Common Services Centers Program, IL&FS Ltd; Aishwarya Rai, Kalpana Chawla, Arundhati Roy, Sonia Gandhi, Gurinder Chadha, and many more have carved a niche for themselves, proving their mettle in various fields. These names and several others signify that they can deliver and no longer they be desisted proving the words said by Margaret Thatcher (First Woman Prime Minister of UK) years ago that “If you want something said, ask a man. If you want something done, ask a woman.” According to a survey by international executive research firm, EMA Partners International, around 11 % of Indian companies have women CEOs, while in the case of Fortune 500 list from the USA, the women CEOs just account for 3 % of the total consideration set.

Interestingly enough, year 2009 seemed to be a silver lining year for India Inc., especially the banking and financial services sector with 13 women heading either banks or insurance companies and many others heading other companies from varied industries. This is quite an unparalleled phenomenon for any emerging economy.

The role played by women in professional fields tend to be consistent with the roles they play at home – effective communication, prioritizing various activities, proper planning, utilization of scarce resources, and so on. Experts comment that businesswomen are more inclined to take measured or calculated risks and resolve issues in a novel way. Typically, women are better communicators and can easily build associations which helps in strengthening business relationships – a major component in marketing or HR function. They are natural networkers and apply creative solutions to business issues. Thus, women are no less than men, and they are equally competent. However, many organizations underrate women’s potential and view them as incompetent in handling top positions.

3 Standard HRM Practice

Standard practices in human resources (HR) can include a broad spectrum of specialties within organizations. Some examples of specialties include recruiting, payroll, policy, safety, training and development, and performance management. In smaller organizations, the HR professional may handle all of those specialties, and in larger organizations, each specialty is most likely its own department.

The roles within HR can vary greatly as well as with many departments from the purely administrative to the executive. Another related and perhaps more important question that is often discussed is, “What should HR be doing?” For me, HR’s primary purpose is to ensure that the right people are working in the right places to accomplish the organization’s goal.

In other words, HR is responsible to develop programs that will attract, select, develop, and retain the talent needed to meet the organizational mission. So whether you are an HR department of one or a combination of multiple departments that include hundreds of employees, your primary responsibility is talent management.

Further by establishing consistency and logic in the enforcement of every policy, HR contributes to an environment of higher level ethical thinking across the board. Other managers will start to apply the same logic. As more and more people see that all policies are routinely enforced, they’re more inclined to report violations even when they are concerned or doubtful. They begin to realize that they can trust HR and the organization’s senior managers to act responsibly. Soon, few violations go unreported. Establishing such an environment is the best defense against executives of all levels bending the truth such as occurred in companies like Enron. While every policy should be applied with careful consideration for mitigating circumstances, vigorous application wherever it makes sense stands the company in good stead with all stakeholders and protects employees and managers alike from future problems.

Maintaining good ethics at every level is clearly a key responsibility for the human resources department.

The relationship between ethics and human resource management is emerging as a subject of serious academic enquiry. The papers in this special issue of Personnel Review begin to map out the critical issues for research and practice in this area. They are drawn from a conference which brought together human resource academics, practitioners, and business ethicists in order to identify how an ethical focus might inform both academic research and debate and the practice of human resource management (HRM) in organizations.

Debate over the precise extent and significance of the trend towards greater job insecurity is ongoing, but for many employees the world of work has become less secure in recent years. This has arisen partly as a result of changes in the macroeconomic climate and the reemergence of mass unemployment; in part from business restructuring and the stripping out of costs through redundancy, delayering, and outsourcing; and also it derives from the adoption of more contingent contracts of employment and systems of reward. From an ethical perspective, the switch to a less secure, contingent employment relationship is problematic in two regards.

A comprehensive ethical and cultural initiative needs to start with a few key points:

• Everyone needs to know the values are paramount in their organization. This must be a continual process starting at the top and communicated with the same frequency, intensity, and commitment as external marketing campaigns.

• Importantly, and perhaps as a very first step, leaders need to translate values statements into a few clear and specific behavioral standards that reflect how business should be conducted. Is it clear employees are expected never to lie or cover up issues no matter what their job entails? Does everyone understand that bringing problems forward is vital to long-term organizational success and should be welcomed, not punished? If employees truly align their behavior with the values, many ethical problems will be prevented or at least contained.

• The goal shouldn’t be to turn employees into workplace ethicists. Particularly in large organizations, ethical problems will surface no matter how much communication and training is provided. Therefore, leaders need to focus on the behaviors – covering up, ignoring problems, and retaliating against complainants – that are preventing ethical concerns from being raised and resolved. Ironically, the most important elements of building an ethical culture relate not to underlying issues themselves but rather to making sure the issues surface so they can be proactively addressed.

• Finally, creating and sustaining an ethical culture is everyone’s responsibility, not just the compliance and HR departments. Managers in particular need to understand how to articulate their own personal commitment to ethical conduct.

Instead of looking just at compliance requirements, organizations should evaluate the palpable success markers that play out in the dynamics of the work environment – specifically, how people react and conduct themselves when faced with decisions that rely on the organization’s values. These values-based decisions will form the foundation of the culture and the long-term standard of “how we do things here.”

3.1 Addressing the Child Labor Issue: Towards Ethical Pinnacle in HRM Practice

The term “child labor” is often defined as work that deprives children of their childhood, their potential, and their dignity, and that is harmful to physical and mental development.

It refers to work that:

• Is mentally, physically, socially, or morally dangerous and harmful to children; and

• Interferes with their schooling by

• Depriving them of the opportunity to attend school

• Obliging them to leave school prematurely or

• Requiring them to attempt to combine school attendance with excessively long and heavy work

Case Study Three: “Gramin Suvidha Kendra”: MCX’s Corporate Social Opportunity Approach to Inclusive Growth

This case study is about the Multi Commodity Exchange of India Ltd. (MCX), an electronic multi-commodity futures exchange based in Mumbai, India, and its corporate social responsibility initiative – Gramin Suvidha Kendra (GSK). Through the GSK initiative, which began in 2006, MCX sought to use its domain strengths to make India’s process of economic growth more inclusive by providing small and marginal farmers with a level playing field and new opportunities in the domain of agricultural marketing, risk management, and finance. The company adopted a proactive approach to CSR and viewed these as “Corporate Social Opportunities” (CSO). The team at MCX felt that adopting such an approach was important for corporate sustainability.

GSK was a Public Private Partnership (PPP) project with India Post, the Indian government’s postal department. Through this platform, MCX provided various services to the farmers, including giving price/market information, addressing technical queries regarding farming, providing scientific warehousing facilities, issuing warehouse receipts, and providing access to finance, quality agri- and non-agri inputs, and bank loans. MCX entered into partnerships with various organizations to bring these services under a single window to benefit the target audience. By 2009, GSK had evolved into a promising model. From being a mere platform to disseminate price information, it had evolved into a revenue generating model. The challenge before Sarita Bahl, Vice President (CSO), MCX, and her team lay in carrying forward the initiative and developing it into a fully self-sufficient model by 2012.

The GSK initiative was started in 2006 by the Multi Commodity Exchange of India Ltd. (MCX), an electronic multi-commodity futures exchange based in Mumbai, India. The initiative aimed at using MCX’s domain strengths to make India’s process of economic growth more inclusive by providing small and marginal farmers with a level playing field and new opportunities in the domain of agricultural marketing, risk management, and finance. GSK was a Public Private Partnership (PPP) project with India Post, the Indian government’s postal department.

Through this platform, MCX provided various services to the farmers including giving price/market information, addressing technical queries regarding farming, providing scientific warehousing facilities, issuing warehouse receipts and providing access to finance, quality agri- and non-agri inputs, and bank loans. MCX had entered into partnerships with various organizations to bring these services under a single window to benefit the target audience. Bahl said she was satisfied with the progress that GSK had made in a relatively small time but pointed out that the team at MCX had had to overcome numerous challenges to bring the project this far…

A survey undertaken by MCX in Jalgaon in November 2007 to study the impact of GSK services found that there was significant crop diversification among the growers. The members interviewed said that they were able to obtain better prices from the market by holding on to their produce for sale at a more price-opportune time…

MCX faced many internal and external challenges in launching and scaling up the GSK initiative. According to Shunmugam, “building a business model around it was challenging to move toward self-sustainability and scalability” as funding remained a constraint to the model. MCX’s vision was to make GSK a self-sustainable model and to ensure that each farmer in these villages got the correct market price for his produce, that he used the best farm inputs for the highest possible yield and quality of yield, and that the warehouse receipt financing through banks became the norm.

4 Child Labor in India

India accounts for the second highest number where child labor in the world is concerned. Africa accounts for the highest number of children employed and exploited. The fact is that across the length and breadth of the nation, children are in a pathetic condition.

Experts blame the system, poverty, illiteracy, and adult unemployment; yet the fact is that the entire nation is responsible for every crime against a child. Instead of nipping the problem at the bud, child labor in India was allowed to increase with each passing year. And today, young ones below the age of 14 have become an important part of various industries, at the cost of their innocence, childhood, health, and for that matter their lives.

4.1 Child Labor in the Agricultural Sector

According to a recent ILO report, about 80 % child laborers in India are employed in the agriculture sector. The children are generally sold to the rich moneylenders to whom borrowed money cannot be returned.

4.2 Street Children

Children on the streets work as beggars; they sell flowers and other items, instead of being sent to school. They go hungry for days together. In fact, they are starved so that people feel sorry for them and give them alms.

4.3 Children Employed at Glass Factories

According to recent estimates, almost 60,000 children are employed in the glass and bangle industry and are made to work under extreme conditions of excessive heat.

4.4 Child Labor in Matchbox Factories

Of the 2,00,000 labor force in the matchbox industry, experts claim that 35 % are children below the age of 14. They are made to work over 12 h a day, beginning work at around 4 am, everyday.

4.5 Carpet Industry Child Labor

According to a recent report by the ILO, almost 4,20,000 children are employed in the carpet industry of India.

4.6 The Other Industries

According to researchers there are about 50,000 children employed in the brass industry of India and around the same amount in the lock industry.

5 Government of India Initiatives Towards Elimination of Child Labor: Action Plan and Present Strategy

The problem of child labor continues to pose a challenge before the nation. The government has been taking various proactive measures to tackle this problem. However, considering the magnitude and extent of the problem and that it is essentially a socioeconomic problem inextricably linked to poverty and illiteracy, it requires concerted efforts from all sections of the society to make a dent in the problem. Way back in 1979, the government formed the first committee called Gurupadaswamy Committee to study the issue of child labor and to suggest measures to tackle it.

The Committee examined the problem in detail and made some far-reaching recommendations. It observed that as long as poverty continued, it would be difficult to totally eliminate child labor, and, hence, any attempt to abolish it through legal recourse would not be a practical proposition. The Committee felt that in the circumstances, the only alternative left was to ban child labor in hazardous areas and to regulate and ameliorate the conditions of work in other areas. It recommended that a multiple policy approach was required in dealing with the problems of working children.

Based on the recommendations of Gurupadaswamy Committee, the Child Labor (Prohibition and Regulation) Act was enacted in 1986. The Act prohibits employment of children in certain specified hazardous occupations and processes and regulates the working conditions in others. In consonance with the above approach, a National Policy on Child Labor was formulated in 1987. The Policy seeks to adopt a gradual and sequential approach with a focus on rehabilitation of children working in hazardous occupations and processes in the first instance. The action plan outlined in the Policy for tackling this problem is as follows:

• Legislative Action Plan for strict enforcement of Child Labor Act and other labor laws to ensure that children are not employed in hazardous employments, and that the working conditions of children working in nonhazardous areas are regulated in accordance with the provisions of the Child Labor Act. It also entails further identification of additional occupations and processes, which are detrimental to the health and safety of the children.

• Focusing of General Developmental Programs for Benefiting Child Labor – As poverty is the root cause of child labor, the action plan emphasizes the need to cover these children and their families also under various poverty alleviation and employment generation schemes of the Government.

• Project-Based Plan of Action envisages starting of projects in areas of high concentration of child labor. Pursuant to this, in 1988, the National Child Labour Project (NCLP) Scheme was launched in nine districts of high child labor endemicity in the country. The Scheme envisages running of special schools for child labor withdrawn from work. In the special schools, these children are provided formal/nonformal education along with vocational training, a stipend of Rs. 100 per month, supplementary nutrition, and regular health checkups so as to prepare them to join regular mainstream schools. Under the Scheme, funds are given to the District Collectors for running special schools for child labor. Most of these schools are run by the NGOs in the district.

The government has accordingly been taking proactive steps to tackle this problem through strict enforcement of legislative provisions along with simultaneous rehabilitative measures. State governments, which are the appropriate implementing authorities, have been conducting regular inspections and raids to detect cases of violations. Since poverty is the root cause of this problem, and enforcement alone cannot help solve it, the government has been laying a lot of emphasis on the rehabilitation of these children and on improving the economic conditions of their families.

The coverage of the NCLP Scheme has increased from 12 districts in 1988 to 100 districts in the 9th Plan to 250 districts during the 10th Plan.

6 Strategy for the Elimination of Child Labor Under the 10th Plan

An evaluation of the Scheme was carried out by independent agencies in coordination with V. V. Giri National Labour Institute in 2001. Based on the recommendations of the evaluation and experience of implementing the scheme since 1988, the strategy for implementing the scheme during the 10th Plan was devised. It aimed at greater convergence with the other developmental schemes and bringing qualitative changes in the Scheme. Some of the salient points of the 10th Plan Strategy are as follows:

• Focused and reinforced action to eliminate child labor in the hazardous occupations by the end of the Plan period.

• Expansion of National Child Labour Projects to additional 150 districts.

• Linking the child labor elimination efforts with the Scheme of Sarva Shiksha Abhiyan of Ministry of Human Resource Development to ensure that children in the age group of 5–8 years get directly admitted to regular schools and that the older working children are mainstreamed to the formal education system through special schools functioning under the NCLP Scheme.

• Convergence with other schemes of the departments of education, rural development, and health and women and child development for the ultimate attainment of the objective in a time-bound manner.

The Government and the Ministry of Labour and Employment in particular are rather serious in their efforts to fight and succeed in this direction. The number of districts covered under the NCLP Scheme has been increased from 100 to 250, as mentioned above in this note. In addition, 21 districts have been covered under INDUS, a similar scheme for rehabilitation of child labor in cooperation with US Department of Labor. Implementation of this Project was recently reviewed during the visit of Mr. Steven Law, Deputy Secretary of State, from the USA. For the districts not covered under these two Schemes, the government is also providing funds directly to the NGOs under the Ministry’s Grants-in-aid Scheme for running Special Schools for rehabilitation of child labor, thereby providing for a greater role and cooperation of the civil society in combating this menace.

Elimination of child labor is the single largest program in this Ministry’s activities. Apart from a major increase in the number of districts covered under the scheme, the priority of the government in this direction is evident in the quantum jump in budgetary allocation during the 10th Plan. The government has allocated Rs. 602 crores for the Scheme during the 10th Plan, as against an expenditure of Rs. 178 crores in the 9th Plan. The resources set aside for combating this evil in the Ministry is around 50 % of its total annual budget.

The implementation of NCLP and INDUS Schemes is being closely monitored through periodical reports, frequent visits, and meetings with the District and State Government officials. The Government’s commitment to achieve tangible results in this direction in a time-bound manner is also evident from the fact that in the recent Regional Level Conferences of District Collectors held in Hyderabad, Pune, Mussoorie, and Kolkata district-wise review of the Scheme was conducted at the level of Secretary. These conferences provided an excellent opportunity to have one-to-one interaction with the collectors, who play a pivotal role in the implementation of these Schemes in the district. Besides, these conferences also helped in a big way in early operationalization of Scheme in the newly selected 150 districts.

The government is committed to eliminate child labor in all its forms and is moving in this direction in a targeted manner. The multipronged strategy being followed by the government to achieve this objective also found its echo during the recent discussions held in the Parliament on the Private Member’s Bill tabled by Shri Iqbal Ahmed Saradgi. It was unanimously recognized therein that the problem of child labor, being inextricably linked with poverty and illiteracy, cannot be solved by legislation alone, and that a holistic, multipronged, and concerted effort to tackle this problem will bring in the desired results.

7 Child Labor in China

China accounts for the third largest number where child labor is concerned. In fact, many think it to be a phenomenon that has just begun to surface. However, the fact is that child labor in China has been there for years. This is so despite that there have been strict official regulations that ban employment of minors. And according to the laws of China, a minor is an individual below the age of 16 years.

Due to poverty, teenagers and younger children have been migrating to the southern and coastal regions of China. This is because these regions have been developing and provide a lot of opportunities to earn.

There are juvenile laborers employed in the workshops and factories. According to a recent People’s Daily Report, the use of children is maximum in the following industries:

• 1. Toy manufacturing

• 2. Production

• 3. Textiles

• 4. Construction

• 5. Food production

• 6. Light mechanical work

The world considers the issue of child labor to be a rather serious one in sub-Saharan Africa. However, there are a set of experts in Africa who do not consider it to be serious and prefer to sweep it under their carpet in order to look into more “serious” issues. There are still others who prefer to wear a blindfold and believe that child labor issues are far more serious in other nations, whereas it is as good as nonexistent in their own nation. However, ILO statistics provide a more serious picture. It states that over 40 % of the children of Africa are working. They are mainly working as slaves in private households, apart from other industries. And because they are working in households, African experts would like to believe it is not really a serious issue.

While the picture, as we see, is grim, yet nothing can really be done as there is no consistent or factual empirical evidence where child labor in Africa is concerned.

7.1 Child Laborers of Africa Are Classified into the Following Categories

• 1. Domestic child labor

• 2. Farm workers

• 3. Commercial plantation workers

• 4. Begging

• 5. Petty sales

• 6. Family business child workers

Source: http://www.childlabour.in/

The ILO has developed an agenda for the community of work. It provides support through integrated Decent Work Country Programmes developed in coordination with its constituents. Putting the Decent Work Agenda into practice is achieved through the implementation of the ILO’s four strategic objectives, with gender equality as a crosscutting objective:

• Creating jobs – an economy that generates opportunities for investment, entrepreneurship, skills development, job creation, and sustainable livelihoods.

• Guaranteeing rights at work – to obtain recognition and respect for the rights of workers. All workers, and in particular disadvantaged or poor workers, need representation, participation, and laws that work for their interests.

• Extending social protection – to promote both inclusion and productivity by ensuring that women and men enjoy working conditions that are safe, allow adequate free time and rest, take into account family and social values, provide for adequate compensation in case of lost or reduced income, and permit access to adequate healthcare.

• Promoting social dialogue – Involving strong and independent workers’ and employers’ organizations is central to increasing productivity, avoiding disputes at work, and building cohesive societies (http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--en/index.htm).

Maintaining Labor Standards: “The rules of the global economy should be aimed at improving the rights, livelihoods, security, and opportunities of people, families and communities around the world.” – World Commission on the Social Dimension of Globalization, 2004 (ILO: A Fair Globalization: Creating opportunities for all, Report of the World Commission on the Social Dimension of Globalization (Geneva 2004:143). Since 1919, the International Labour Organization has maintained and developed a system of international labor standards aimed at promoting opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security, and dignity. In today’s globalized economy, international labor standards is an essential component in the international framework for ensuring that the growth of the global economy provides benefits to all.

Case Study Four: Child Labor in MNCs in India

A new system of employing female children as “bonded laborers”¹ has come into practice on hybrid cottonseed farms in south India in recent years. Local seed farmers, who cultivate hybrid cottonseeds for national and multinational seed companies, secure the labor of girls by offering loans to their parents in advance of cultivation, compelling the girls to work at the terms set by the employer for the entire season and, in practice, for several years. These girls work long days, are paid very little, are deprived of an education, and are exposed for long periods to dangerous agricultural chemicals.

The introduction of hybrid cottonseeds in the early 1970s has brought significant changes in the quantity and quality of cotton production in India. It has not only contributed to the rise in productivity and quality of cotton but has also helped to generate substantial amount of additional employment in the agricultural sector. Despite its positive contribution, hybrid cottonseed production gave rise to new forms of labor exploitation which involves the employment of female children as bonded labor and large-scale exploitation of them. An important feature of hybrid cottonseed production is that it is highly labor intensive and female children are employed in most of its operations.

The exploitation of child labor in cottonseed farms is linked to larger market forces. Several large-scale national and multinational seed companies who produce and market the seeds have involved themselves in subtle ways in perpetuating the problem of child labor. The economic relationship behind this abuse is multi-tiered and complex, which masks legal and social responsibility.

Currently, there are about 200 seed companies involved in production and marketing of hybrid cottonseeds in India, including several multinational companies (MNCs) like Unilever, Monsanto, Syngenta, Advanta, Bayer, and Emergent Genetics. MNCs are operating their seed business activities through their own subsidiary companies in India or joint ventures and collaborations with local Indian companies. The names of Indian subsidiaries or joint venture companies of abovementioned MNCs are Hindustan Lever Limited (for Unilever Plc), Syngenta India (for Syngenta AG), Advanta India (for Advanta BV), Monsanto India and Mahyco (for Monsanto), Proagro (for Bayer), and Mahendra Hybrid Seeds (for Emergent Genetics).² In March 2002, Hindustan Lever Limited (HLL) transferred its seed business to a subsidiary company called “Paras Extra Growth Seeds” and formed a joint venture partnership with Emergent Genetics. HLL sold 74 % of its share in Paras Extra Growth Seeds to Emergent Genetics.

The role of MNCs in cottonseed business has increased significantly in recent years due to various trade liberalization policies introduced by the government after 1991. The recent approval of government of India in April 2002 for introducing BT (Bacillus thuringiensis) cotton in Indian market is expected to bring far reaching changes in terms of greater control of MNCs, which have patent rights over genetically modified technology, over Indian seed industry in near future.

The growing concern about child labor problem in the state put the entire cottonseed industry, which employs children in production of seeds in a big way under severe criticism. The role of companies in perpetuating the child labor problem is being questioned. The MNCs, which claims that they are committed to socially responsible business practices, have to face severe criticism both from national and international agencies.

Response from MNCs

Hindustan Lever

Responding to the issue of use of child labor in production of its cottonseeds, HLL denies any direct contact with seed farmers and also the use of forced child labor as such in production of seeds. As a response to a news report “Even Multinationals Employ Child Labour for Profit” published in “The Hindu Business Line, 21–6–2001,” the General Manager in charge of corporate communications, HLL, in a press statement issued on June 25, 2001, states that “HLL has third-party seed organisers who get seeds produced from numerous farmers on sale/purchase basis and supply them to HLL. In no case, HLL deals with any farmer, either for production or for payments. Though HLL does not control or influence seed organisers’ selection/dealing with farmers, the seed organiser typically supplies parental seeds to farmers at a cost with a buy- back arrangement of the resultant seed production. To carry out actual production, the farmer and his entire family work in the fields and employ additional labour whenever required. HLL or the seed organiser has no direct or indirect role in the farmer’s practice of either taking help from his family members or employing labour”.³

In a communication to the NOVIB, a developmental organization, a representative of Unilever makes similar observation stating that “HLL has no direct contacts with the farmers themselves. In this situation I can affirm that HLL does not make use of child labour in the context of her cottonseed activities. Furthermore I can affirm that the suppliers of HLL, in this case the seed companies, do not make use of child labour in their activities. HLL is convinced that her suppliers act in accordance with her wishes because monitoring takes place by field visits, oral questions and frequent confirmation of these requirements. With regard to the actual cultivation of cottonseed the situation is less clear, we do not believe that forced labour by girls is used in the cultivation of cottonseed which we purchase. In the agrarian sector in India, just like in other developing countries, it happens a lot that children are working on the farms of their families.

HLL has recently transferred its seed business to its subsidiary ‘Paras Extra Growth Seed Ltd’ and formed a joint venture partnership with Emergent Genetics. Participating in a consultative meeting of seed companies, NGOs and government departments against child labour in Hyderabad on August 3rd 2002, Mr. Mohan Rao person in charge of Human Resource Development, Paras Extra Growth Seeds states that “we acknowledge that there is a problem of child labour in hybrid cottonseed production. The problem is real and we are committed to address this problem. It is an industry problem also. Every one in seed industry has to pay serious attention to this issue.”

Interacting with the author, the local representatives of Mahyco, Advanta, and Proagro have expressed almost similar opinions about the child labor issue.

Mahyco

According to in charge of production for Mahyco company in Kurnool “As a company we do not employ any child labour nor we encourage our suppliers. We are not responsible for the practices of local farmers with whom we do not directly make any contracts. We agree that child labour is prevalent in production of seeds and the entire seed industry has to pay serious attention to this issue. We have to look for new technologies which reduces the requirement of labour in production process. Our company through its own research has released the new cotton hybrids using CMS (Cytoplasmic genetic Male Sterility) technology,⁴ which reduces the requirement of labour in production of seeds by half.”⁵

Advanta

Advanta which has adopted seed village approach for production of its seeds and is directly involved in making contacts with seed producers in some areas also avoids owning any responsibility for child labor situation on the technical ground that it does not employ children directly. A local representative of the company states that “Our company does not employ any child labour and we cannot enforce any regulations on the seed farmers since they are not employed by us. Most of the farmers who supply seed for us are small farmers. They primarily depend on their own family labour including their children for cultivation of seeds and employment of outside child labour is less.”⁶

Though seed farmers are not employees of Advanta, it can exert substantial control over them. The legal agreement between Advanta and its seed farmers clearly indicates Advanta has substantial control over the production process and practices of the farmers.

Syngenta

The issue of child labor has brought the Syngenta under severe criticism from investment companies in the West who have put pressure on the company to address the issue.⁷ Realizing that the issue of child labor is exposing its company to a significant reputational risk in addition to attracting negative media attention, the top management of the company has decided to take a proactive role in addressing the issue. Speaking at a consultative meeting of seed companies, NGOs, and government departments against child labor in Hyderabad on August 3, 2002, Dr. Shanthu Shataram, head of stakeholders relations, Syngenta, states that “We at Syngenta are very much concerned about the child labour problem in cottonseed production. We do not want to escape from our responsibility. Though we have not created the child labour problem in the process we have become part of the problem. Now we want to become part of the solution by taking necessary measures to eliminate the problem.”

Syngenta has initiated some measures during last year to discourage the use of child labor in production process. For the first time during the current crop season company has put a special clause in written agreements which it makes with seed organizers stating that “children should not be used in cultivation of seeds.” It has also requested its seed organizers to decentralize the production by selecting more number of small and marginal farmers for production of their seeds.

With regard to the farming practices of its seed producers (small farmers mostly depending upon own family labor, nonemployment of child labor), companies’ observations are not true. As we have already explained in section one, most of the farmers involved in production of cottonseeds are rich and depend mostly on outside labor. Outside labor accounts for about 90 % of the total workforce in cottonseed production. Seed production is highly capital intensive, and those farmers who have enough capital can only venture into this activity. It is also labor intensive and even if it is a small-scale production of one acre, it requires large number of laborers which cannot be managed by family labor alone.

To sum up, the activities of MNCs in the area of cottonseed business in India are not certainly in tune with what they claim about their commitment to socially responsible corporate behavior. Though they are not directly involved in employing children, they have substantial control over entire production process and seed farmers who actually employ children for producing seed for these companies.

(Source: Child Labour and Trans-National Seed Companies in Hybrid Cottonseed Production in Andhra Pradesh: Davuluri Venkateswarlu; Director, Global Research and Consultancy Services, Hyderabad; e.mail davuluri_v@yahoo.com)

Questions for Discussion

• 1. Explain the concept of corporate glass ceiling. What do you think are the various factors that prevent women from rising through the ranks in corporates around the world?

• 2. “For every Fiorina who claims the glass ceiling has been shattered, there are hundreds of thousands of working women who know it remains firmly in place.” Critically analyze the statement and justify your answer.

• 3. Though the debate on glass ceiling continues, some obstacles did prevent women from reaching top management positions. How do you think these obstacles can be overcome by women, particularly in developing countries like India? Explain.