CHAPTER 6

Socially Responsible Human Resource Policies

Jesus Barrena-Martinez, Macarena Lopez-Fernandez, and Pedro Miguel Romero-Fernández

University of Cádiz

We need business to understand its social responsibility ... the main task and objective for a business is not to generate extra income and to become rich and transfer the money abroad, but to look and evaluate what a businessman has done for the country, for the people, on whose account he or she has become so rich.

—Vladimir Putin

Introduction

In the words of one of the most relevant Russian politicians, a businessman has a great deal of power in society, and consequently bears the responsibility for generating added value to the country in which he plies his trade. The concept and practice of corporate social responsibility (CSR) has revealed that organizations have played a fundamental economic function in society for a long time, actively contributing toward the distribution of goods and services, and generating wealth and employment. However, in recent decades, circumstances such as the growing incidence of corporate fiscal abuse and opportunistic strategies in financial markets; the increase of social inequalities reflected in poverty, hunger, or discrimination against countries; the immense power held by multinationals; and the environmental degradation of the planet, have all generated significant pressure on companies to behave responsibly by means of different activities in the organization. Given the relevance of employees to the success of any organization, the design and implementation of human resource policies that are characterized by a socially responsible orientation is posited as a value-generating process that deserves to be examined in depth. In particular, this chapter focuses on analyzing the potential impact of this social approach on employer–employee relationships, improving them at both individual and company levels. This gives us the opportunity to reflect on the implications and see the value of ethical behavior for prospective candidates, such as college students, and their future recruiters. The structure of the chapter highlights the relevance of CSR as a discipline and explains its value using some case studies. Only those companies that demonstrate a responsible concern for organizational activities can face the difficult environmental challenges. Additionally, this chapter conducts an analysis of socially responsible policies, providing proofs of a consensus in international CSR standards such as the Global Reporting Initiative (GRI) and ISO 26000 with regard to the relevance of treating employees ethically. The GRI is an independent, international organization that helps businesses and governments to understand and communicate the impact of business on critical sustainability issues. ISO 26000 also provides guidance as to how businesses and organizations can operate in a socially responsible way.

Corporate Social Responsibility

The field of CSR evolved from the classical notions of ethics as conceived by the ancient Greek philosophers such as Socrates, Plato, and Aristotle. Nowadays, ethics is perceived by many academics and students as an essential instrument in higher education to teach people values, norms, and attitudes. As a recent development, in many schools of business and management, CSR is now being taught as a standalone course or a module within other courses.

Despite the advances in CSR, Turker¹ suggested that, in essence, CSR is still being perceived by academics and professionals as four dimensional, following the contributions of Carroll.² The author explains the commitments that a firm must develop sequentially to behave responsibly: (i) an inherent economic dimension of responsibility aimed at assuring a return, which maintains its business; (ii) a legal dimension of responsibility, understood as the regulations, norms, and laws that must be respected by the organization; (iii) an ethical dimension of responsibility, which comprises a set of practices judged as right or wrong by society, not yet written in law; and (iv) a discretionary dimension of responsibility, which encompasses those activities carried out, despite not being a requirement for businesses, but which lead to contentment and well-being for society, such as charitable contributions (see Figure 6.1).

With these four dimensions, Carroll³ understands CSR as a “global process developed by organizations in order to meet the economic, legal, ethical and discretionary expectations of society at a given point in time.” Carroll’s work is positioned as one of the first to classify and facilitate the identification of social responsibility activities into these four groups, allowing the gradual acquisition of a philosophy of response to the environment through planning and the diagnosis of the broad set of demands that the context requires.

Figure 6.1  Carroll’s Pyramid: dimensions of CSR

Source: Adapted from Carroll (1979).

In the late 1980s and early 1990s, an international institution known as the World Commission on Environment and Development (WCED) ratified, in the Brundtland Report⁴ and later at the Earth Summit in Rio de Janeiro,⁵ the importance of behaving sustainably and responsibly. They also highlighted the relevance of meeting the needs and aspirations of the present without compromising the resources and capabilities available in the future.

The contributions of the WCED underline that the economic growth of companies must be underpinned by developing solutions to eliminate the common main problems that impact daily on society, such as environmental contamination (pollution, nonrenewable energy, lack of recycling, etc.). Moreover, the WCED suggests that it is vital to reduce social inequalities (poverty, hunger, underdevelopment of countries, etc.) in order to ensure the sustainable and responsible development of society.

In exposing the idea that social responsibility actions may minimize the environmental, social, and economic impact of any company, another relevant contribution regarding the concept of CSR is proposed by Wood.⁶ Wood defines the concept of corporate social performance (CSP) as a configuration of principles, processes, policies, and programs of social responsibility aimed at measuring the results of companies in terms of their relationship with society, which finally determines the achievement of higher levels of legitimacy by companies. This work shows that the effectiveness of social responsibility actions is not only marked by economic or financial results, but by the perception that society has of its business behavior.

Among other institutions immersed in promoting active CSR, the World Business Council for Sustainable Development (WBCSD) plays an important role. Since its creation in 1995, WBCSD has positioned itself as a global partnership dedicated to exploring sustainable development options for businesses by sharing knowledge, experiences, and effective practices. According to the WBCSD,⁷ CSR can be understood as a commitment on the part 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. Other international initiatives that have helped to promote the importance of integrating social responsibility in business management are: the Principles of Global Compact promoted by the United Nations Global Compact, the Organization for Economic Cooperation and Development (OECD)⁸ Guidelines for Multinational Enterprises, the CSR Green Book prepared by the Commission of the European Communities,⁹ and the Tripartite Declaration of the International Labor Organization concerning Multinational Enterprises and Social Policy.

The gradual increase in definitions emphasizes the multidisciplinary breadth and scope of CSR. In an attempt to extract commonalities and consensus in literature regarding the definition of CSR, the bibliometric analysis conducted by Dahlsrud¹⁰ highlights that all of the definitions set up until that year have three points in common: (i) the importance given to the stakeholders, (ii) the voluntary degree of CSR actions by companies, and (iii) the reference to these actions representing a set of social, economic, and environmental obligations, and the association of these commitments with sustainable development.

Although the concept of social responsibility takes various forms and is associated with a large number of approaches, it has evolved, incorporating a great number of implications for the various stakeholders involved in the company’s activities.

However, more empirical research needs to be developed that confirms these fundamentals and more international institutions and entre-preneurs need to see that implementing CSR actions helps firms to improve society’s general welfare.¹¹

To provide a recent definition of the field, the European Commission defined CSR as the process of integration in organizational activities of the social, environmental, ethical, and human concerns of its interest groups, with two aims: (i) to maximize the value creation for these parts, and (ii) to identify, prevent, and mitigate the adverse effects of businesses’ actions on the environment.¹² Hence, those companies that want to receive the balanced support of stakeholders should implement responsible behavior in the management of its activities.

Taking these ideas into consideration, this chapter sets out to discuss the importance and added value that decisions in the field of social responsibility can have on a company’s results, focusing on the role that human resource management (HRM) can play in this relationship.

CSR and HRM: A Strategic Fit

Nowadays, students—as potential managers—can learn by considering the mistakes of the past in ethical, environmental, and social issues. Relevant scandals such as the accountancy manipulation of Enron, the environmental disaster of British Petroleum, or the child labor abuse of many firms in different underdeveloped countries can show how the end does not justify the means used by firms.

Used in the classroom, these examples can show how failing to carry out an ethical and responsible business management strategy can have catastrophic consequences, negatively affecting the reputation of the firm and, consequently, its economic performance. Theoretical perspectives such as corporate citizenship argue that, like citizens, companies have rights and obligations. Hence, it is necessary that firms comply with a number of responsibilities that promote the general welfare of society.¹³ According to Nelson, Poms, and Wolf’s¹⁴ study, which provides a framework for studying ethics and diversity management in an introductory organizational behavior course, we believe that business schools have a responsibility to prepare students to be ethical citizens.

Moreover, current business ethics researchers advocate the study of morality and human behavior in lecturing, using reflections adapted from the realm of philosophy to the world of business. Thus, we intend to explain how case studies can be used to teach students how to design socially responsible policies based on ethical and moral principles. Authors such as Drucker¹⁵ argue that social responsibility actions do not solely represent a cost to business, but are also an opportunity for the different stakeholders to gain legitimacy through the adoption of responsible behavior. Specifically, this chapter calls for attention to socially responsible practice in the area of managing human resources.

According to Lockwood,¹⁶ Sharma, Sharma, and Devi,¹⁷ and Barrena-Martinez, Lopez-Fernandez and Romero-Fernández,¹⁸ workers play a key role in the development of CSR strategies, being considered as one of the main stakeholders engaged in business success. Considering this background, it is essential to analyze how CSR could be involved in HRM, and how this process could be translated into several policies and practices that guarantee the satisfaction and commitment of the most important asset: the human capital (see Figure 6.2).

A strategic approach to the management of human capital can be crucial in the process of integrating CSR.¹⁹ The strategic human resource management (SHRM) concept, as explained by Martín-Alcázar, Romero-Fernández, and Sánchez-Gardey,²⁰ represents an evolution of the traditional concept of human resources. More specifically, Wei²¹ considered SHRM to be a relatively “new” concept, involving the design and implementation of internally consistent human resource policies and practices, which ensure that the human capital contributes to the achievement of business objectives. Students, as future managers, need to know how efficient human resource strategy should be developed, as well as how human resources strategy should be aligned with company and CSR strategies.

Figure 6.2  Strategic fit between HRM and CSR

Source: own elaboration.

According to Armstrong²² there are some recommendations to follow in order to carry out an efficient HR strategy. First, the HR strategy must satisfy the business needs. Hence, in order to develop a strategic socially responsible orientation in HRM, we will take into consideration the needs of employees as a first requirement.

Second, the HR strategy is founded on detailed analysis; it cannot be wishful thinking. In this regard, it is important to evaluate any decision making and its implications and consequences with regard to economic and social performance, but it is also always necessary to assess if there might be ethical or moral damage to stakeholders.

Third, the HR strategy should be able to be turned into actionable programs. For example, if the company proposes a CSR strategy aimed at providing an appropriate work–life balance to all of its employees, this strategy must be translated into policies and practices. For example, providing employees with a kindergarten service is a simple measure that can result in a significant improvement in employee satisfaction and add flexibility to many employees’ work-schedules, while also being a practice consistent with HR and CSR strategy.

Finally, the HR strategy must be coherent and integrated within the general strategy of the company. According to Armstrong’s final suggestion, a fit is necessary between HR strategy and company strategy. This adjustment should include the specific culture, operational processes, and external environment of the company. Hence, as Armstrong²³ concludes, it is more important to have the best fit possible between HRM and company strategy, than it is to know what the best practices are. There is no universal recipe for successful HRM policies; everything depends on how the context and the environment of the firm affects and shape HR policies and practices.

However, according to the universalistic point of view,²⁴ the adoption of the best HR policies and practices is going to generate positive results regardless of the organization’s particular circumstances; therefore, adopting the best-known socially responsible human resource policies (SRHRPs) could provide positive results in any organization. Reviewing international and professional standards could provide clues to students as to how to design and develop potential socially responsible HR policies and practices.

Socially Responsible Human Resource Policies

The growing number of incidences of corporate abuse and opportunistic strategy in the market has encouraged the parties affected by any firm’s decisions and their consequent outcomes, that is, the stakeholders, to require a greater commitment and responsibility from an organization’s activities.²⁵

Given the multitude of groups engaged in any organization’s activities, authors such as Freeman²⁶ and Clarkson²⁷ suggest that it is worthwhile differentiating and prioritizing these parties according to their relationship to the organization and they therefore propose dividing them as follows: First, there are the primary groups, those who have a formal contract with the organization and are essential to its proper functioning (owners, shareholders, employees, unions, customers, suppliers, etc.). Second, those actors who, despite not being directly involved in the economic activities of the company, can nonetheless exert a significant influence on its activity despite not having a contractual relationship with the said organization (general public opinion, citizens, competitors, local communities, government, nongovernmental organizations [NGOs], etc.).

The current chapter focuses on CSR toward employees, identifying human resources as an essential stakeholder in the company’s success. Specifically, studies show that social responsibility actions have a direct impact on performance variables such as: (i) the generation of a greater sense of belonging to the company;²⁸ (ii) increased levels of trust and commitment to the company;²⁹ and (iii) enhanced job satisfaction for employees.³⁰

Considering how employees contribute to and are implicated in social responsibility, we can see that these social ethical actions can have an important role in personnel’s behaviors, attitudes, and performance. This chapter therefore seeks to show how socially responsible guidance in HRM may improve an organization’s performance. The purpose of SRHRPs are twofold: (1) to improve the ethical, social, human, and labor rights of workers, leading to improved employee satisfaction; and (2) to obtain a differential value for companies increasing employees’ performance as a result.

For a better understanding within this context, in selecting and adapting SRHRPs, the role played by both actual stakeholders and institutional pressures must be considered. In this regard, for a better identification of contextual variables, we propose that reports such as Brewster, Morley, and Buciuniene’s be studied.³¹ These highlight the consideration of two key variables that affect the HRM system: the socioeconomic context (legal and regulatory framework, political, institutional, social, economic and environmental, cultural, trade unions, and education system), and organizational context (work environment, culture, company size, technology, innovation, and stakeholder’s interests).

Thus, in particular within the variables that make up the socioeconomic context, according to authors such as Dahlsrud,³² it is to be noted that social responsibility is increasingly regulated within the European Union. Among the major international regulatory initiatives mentioned are the Global Compact of the United Nations, OECD guidelines, the European Union’s Green Paper on CSR, and Sustainable Development Strategy of the European Union.³³ Furthermore, these international standards, including the examples such as the GRI and ISO 26000 used in this research (as they are the most frequently implemented standards) propose to regulate, and are also able to certify, levels of CSR practices.

According to Martín-Alcázar, Romero-Fernández, and SánchezGardey,³⁴ the influence of legal and regulatory factors plays a decisive part in the modeling and processing of policies and practices in human resources, which include this socially responsible orientation. Ultimately, we must therefore highlight the role that contextual factors play in a socially responsible HRM system. Specifically, it is important to consider the effects of intangibles, such as organizational culture, technology, innovation, and human capital itself, on the results of acting in a socially responsible manner.

The theoretical framework of the question to be addressed has therefore been stated, namely, what human resources policies and practices should be considered and what social orientation should be applied. In order to meet this goal and build a solid foundation for the development of these SRHRPs and practices, the following will be taken as reference: professional information collected in the social responsibility reports of IBEX-35³⁵ companies; and two of the social indicators most implemented by international companies: the GRI and ISO 26000.

Typical Ethical Issues Covered in the GRI and ISO 26000

According to information provided on its website, the GRI is an independent, international organization that helps businesses, governments, and other organizations to understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption, and many others.

Similarly, the ISO 26000 provides guidance on how businesses and organizations can operate in a socially responsible way, acting in an ethical and transparent manner that contributes to the health and welfare of society. The application of this standard certifies socially responsible behavior for business in seven key areas of the organization: organizational governance, human rights, labor practices, the environment, fair operating practices, consumer issues, and active participation in community development.

An analysis of the labor management section in ISO 26000 extracted two SRHRPs (working conditions and social protection; and social dialogue and communication) that complemented another six policies that SRHRP identified in their review of the GRI. A total of eight specific policies with social and ethical connotations for employee management was therefore finally compiled after reviewing the social management and labor standards of GRI and ISO 26000, providing an SRHRP framework composed of: employment; management of labor relations; occupational health and safety; training and development; diversity and equal opportunities; pay equity; working conditions and social protection; and communication and social dialogue (see Table 6.1).

Table 6.1 Consensus of human resource policies obtained through the analysis of CSR standards

Socially responsible human resource policies	GRI	ISO 26000
Employment
Management of labor relations
occupational health and safety
Training and development
Diversity and equal opportunities
Pay equity
working conditions and social protection
Communication and social dialogue

There are two important differences between the above international consensus of SRHRP and traditional HR policies:

1. The socially responsible orientation of the policies: it is important that all the policies be coherent with CSR strategy.

2. The policies are not only aimed at improving economic performance. The development of these policies, as per general interpretation of the CSR definition, should go beyond the company’s legal commitments and obligations. The results can be intangible benefits for employees such as improved satisfaction, motivation, and the well-being of employees and their families.

A general description of these SRHRPs follows.

Employment

A socially responsible orientation can help companies to attract, motivate, and retain employees. Moreover, a significant part of the retention lies in the socialization of new employees, so as to improve their assimilation into company culture, in an effort to adjust their goals and individual values in line with company objectives.

In relation to staffing processes and, more particularly, with regard to the incorporation of human capital, the literature advocates the use of internal promotion as a key mechanism to improve production and employee motivation.³⁶ Internal recruitment is therefore viewed as a way of increasing task efficiency because personnel perceive their own effort and possession of skills, knowledge, and experience to be a way of enabling their promotion and career growth in the company. One of the main advantages is that employees promoted internally do not require any further economic effort aimed at the socialization process in order to adapt to the company’s corporate culture, procedures, and practices. As a result the need for this initial investment is eliminated.

In the same vein, an important institution like the European Commission³⁷ points out that social responsibility can have a great effect on the motivation and retention of employees, as a growing number of workers begin to positively perceive aspects such as the ethical, social, and environmental reputation of companies. For example, Valentine et al.³⁸ state that most workers prefer to work for socially responsible companies that respect human rights, social and employment conditions, noticing significant relationships between this socially responsible management and higher levels of loyalty, motivation, and commitment in these workers, ultimately affecting the stability of the workforce.

Training and Continuous Development

One strategic facet of any company lies in continuous training and the development of employee talent by offering programs aimed at the acquisition of knowledge and skills that meet the employee’s personal and professional needs, thus better guaranteeing the daily and future activities of the company. This approach favors the generation of an appropriate work environment in which to perform their jobs more efficiently.

Management of Labor Relations

It is essential to institute a social management policy for employment relations, establishing an appropriate and decent work environment in which a series of employee social commitments, rights, and reciprocal obligations must be guaranteed. Reconciling what employees expect from the company with what the company expects from the employees ensures greater medium and long-term productivity from individuals by determining variables such as job satisfaction and loyalty, which will provide an improved work environment.

Communication, Transparency, and Social Dialogue

Promoting communication, transparency, and social dialogue helps to nurture formal and informal channels of communication between employer and employee. HRM should be responsible for creating a dialogue that helps companies transmit the mission, vision, and values of the company regarding social and ethical behavior to their workers. The perception of fair and equitable treatment of employees creates a harmonious working environment in which employees will be more productive.

Diversity and Equal Opportunities

Given the variety in origin of any labor force, one of the great challenges in organizational management lies in carrying out efficient management of human capital, thereby promoting a policy of diversity and equal opportunities. This diversity can bring great value to the company, improving creativity and the quality of employee relations, as well as providing different views to address problems and routine tasks. These are circumstances that all have a positive affect, reducing conflict and improving the work environment.

Fair Remuneration and Social Benefits

According to the analysis of different authors,³⁹ there are two aspects to be considered in a responsible approach to improving management compensation: ensuring pay equity, and adding value through social security coverage or other benefits offered to employees. Some studies show that wage disparities in companies can influence the development of social conflicts between employees.⁴⁰ Thus, the first practice of fair remuneration and social benefits is intended to ensure pay equity for workers and thus promote a harmonious working environment.

The implementation of equity in the compensation system can be done through other practices. The second practice would be to grant remuneration based on the skills and performance of employees. This would lead to two associated benefits: improved company performance and greater satisfaction and a sense of fulfillment in employees, whose efforts are appreciated and fairly rewarded. Some studies in the field of HRM establish compensation mechanisms allocated through the development of skills and the assessment of employee performance; processes that incite workers to increase their productivity through greater performance effort and improved work quality.⁴¹ Additionally, perceiving a sense of justice and equality in employee assessments carried out by the company leads to a gradual increase of their commitment to the organization.⁴²

When considering compensation, apart from meeting the economic or financial expectations of employees, another key aspect is offering better social security and benefits and improved working conditions. A third socially responsible practice is therefore proposed: providing benefits such as scholarships, life/accident insurance, nursery vouchers, retirement plans, medical coverage, days off, vacation packages, employee discounts, and so on, to employees as part of their remuneration. The importance of this practice, in the view of some authors, is to ensure that a continuous program of social benefits helps to improve the welfare, ethical climate, and work involvement of employees, as well as their performance.

Health and Safety at Work

To ensure that individuals perform well, they must feel safe and comfortable in their jobs; it is therefore necessary to implement a health and safety policy that equips employees for their work and daily activities. This has been verified by the International Labor Organization and the European Agency for Safety and Health at Work (EU-OSHA), which demonstrate a strong correlation between physical environment and productivity, moderated by highly valuable, intangible variables such as welfare, job satisfaction, the employees’ physical or emotional health and their working environment.

Work–Family Balance

Finally, given the need and importance of a personal and professional balance, a fifth policy should be considered: that of reconciling work and family life to ensure the well-being, motivation, and retention of talent. Those organizations that offer improved flexibility in working hours, competitive pension plans, support for childcare or scholarships, are recognized in the market and become benchmarks of quality as far as human capital management is concerned.

Ethics Teaching Strategies

Having explained the theoretical vision of this chapter, we now suggest an in-depth analysis of two case studies of organizational scandals, namely, those of Apple and FIFA (Fédération Internationale de Football Association). We expect the analysis to provide examples of typical ethical issues in HRM as well as offer some ethical dilemmas for class discussion during this aspect of the course on CSR.

Case 1: Bad Apple?

Apple is an American multinational corporation, with headquarters in Cupertino (California, USA) and Dublin (Ireland) that designs and manufactures electronic equipment and software. Among the best-known Apple products and hardware are Macintosh computers, the iPod, the iPhone, and the iPad. In May 2014, the company was operating in more than 408 stores in 9 countries, with 4,000 distributors (including premium Apple Premium Resellers or distributors) and an online store (available in several countries) where its products were sold and technical assistance provided. According to Fortune magazine, Apple was the most admired company in the world between 2008 and 2012.

Apple has been strongly criticized for alleged tax engineering in several countries in an effort to evade taxes. It was also criticized for its bad environmental practices and for labor exploitation suffered by employees of suppliers in Asia as Johnston⁴³ detailed in The Independent (UK). Despite the huge success of this giant technology company, a British Broadcasting Corporation (BBC) investigation revealed that “Chinese workers who make products for Apple in China work 16 hours a day, and 18 days in a row.” However, according to Fortune’s ranking, in 2015 Apple was once again considered the World’s Most Admired Company, being also the first company ever to hit more than $700 billion in market value.

Given this background, it is interesting to consider several questions:

1. Despite the top position of Apple in many responsible and added value rankings, do you think the giant should implement a responsible strategy in HRM area in Asia?

2. As a responsible CEO of the company, what strategy should be followed to mitigate and avoid these kinds of scandals?

3. Do you think that a bad reputation in other regions, such as Asia, can provoke a backlash to other regions such as North America or Europe?

4. What is your opinion regarding the high number of hours worked by employees in Asia? Is this merely a matter of culture?

Case 2: FIFA Scandal

The FIFA, based in Zurich, is the institution that governs football federations worldwide. It was founded on May 21, 1904, and is responsible for managing the rules of the game. In addition, FIFA organizes the World Cup and other major football championships in various categories, as well as the Olympic tournaments, and incorporates 209 national football associations and federations.

However, this prestigious institution suffered a corruption scandal in 2015 when the United States Federal Bureau of Investigation (FBI) and the Internal Revenue Service Criminal Investigation Division (IRS-CI) demonstrated a possible fraud of $150 million, which involved 14 people within the multinational organization. According to Wilson (2015), a journalist from the BBC, this scandal was “a disaster” for several FIFA sponsors, namely, Adidas, Coca-Cola, Gazprom, Hyundai/Kia, Visa, and Budweiser.

Questions:

1. After reviewing the objective, scope, and principles of the FIFA Code of Conduct⁴⁴ (accessible on their website), can you determine if FIFA employees violated any part of this code?

2. What should FIFA’s reaction be in terms of managing their human resources?

Advice for Teachers

In carrying out this activity (the case study analysis), it is important that the students are able to understand ethics as a transversal concept, coherent with both the overall company and HRM strategies.

In the Apple case study, teachers should introduce the company as a greatly admired, highly ranked multinational (see http://fortune.com/rankings/ and, more specifically, http://fortune.com/worlds-most-admired-companies/). Looking through these Web pages, the students should think about the similarities and differences of the firms in terms of CSR and HRM strategies, and whether they are, indeed, a real fit among those ranked. As an important approach to studying the case, the theory that employees are one of the primary stakeholder groups engaged in business success plays a special role and, as such, they should be managed in a responsible manner. Students will thus understand that stakeholder theory is specifically linked to CSR strategy.

As the case is analyzed in further depth, it is important to highlight the labor conditions of those employees who work for Apple in Asia, as well as those working for some of their suppliers. For the second question, teachers should introduce the concept of reputation and how a company can be damaged by its own negative actions. And finally, with respect to the cultural aspect, teachers should introduce some of the contributions laid out in Hofstede’s article, “The business of international business is culture” (Hofstede 1994). Hofstede’s work presents the idea that national cultures are to be distinguished from organizational cultures. He identifies six differences of cultures found within organizations: (1) process-oriented versus results-oriented cultures, (2) job-oriented versus employee-oriented cultures, (3) professional versus parochial cultures (4) open system versus closed system cultures, (5) tightly versus loosely controlled cultures, and (6) pragmatic versus normative cultures. These differences should be taught and briefly discussed with the students prior to them answering the question.

In the second case study, the introduction of an ethical code of conduct in any company has special relevance and, more specifically, in a giant sporting association such as FIFA. To analyze this case the concept of cognitive dissonance could be introduced; that is to say, situations that involve conflicting attitudes, beliefs, or behaviors among people or companies. The students should revise FIFA’s code of ethics, as presented on their website, with a view to locating which parts of that code were violated in the scandal and what the consequences of these actions were— and are—for employees. One important aspect for discussion is what the differences (mission, objectives, strategies, etc.) are between a sporting association such as FIFA and a general company.

Developing Versus Developed Country Perspectives

The differences between developing and developed countries acquire special relevance in CSR and HRM across the four specific dimensions set out by Carroll⁴⁵: economic, legal, ethical, and discretionary. Economically, according to the International Monetary Fund (2006), developing countries (i.e., Asia, Africa, Latin America, etc.) have expanding opportunities, being the most lucrative growth markets for business. In developed countries, a greater part of the market is saturated and there are subsequently less opportunities for economic growth. Ensuring a responsible orientation in HRM as part of a company’s CSR policy implies an additional cost for companies in both developing and developed countries. However, in legal terms, the degree of implementation of responsible human resource policies by companies could be interpreted as a minimum (in developed countries, fulfilling legal and institutional norms and requirements) or as an added value (in developing countries, going beyond the legal requirements). An example could be explored, in the case of Apple, by reviewing the number of hours worked by American employees in comparison with those worked by Asian employees. On the other hand, the ethical dimension of responsibility is better related to a sense of fairness, clearly perceived as an institutional value ingrained in the behavior of citizens of any country. Finally, the discretionary dimension is related in some cases to CSR or those responsible investments, charitable actions, and so on, undertaken by associations or private companies. For example, NGOs in developing countries are losing credibility for their actions for citizens and institutions as a consequence of their lack of transparency and certain scandals, meaning that nowadays they are finding it much more difficult to raise funds.

Apart from Carroll’s four dimensions, authors such as Visser⁴⁶ highlight other drivers, such as the sector, politics, socioeconomical changes, religion, or culture, which affect the implementation of responsible actions in developed and developing countries.

Summary and Conclusion

Given the idea that employees are essential to business success, the implementation of SRHRPs must put special emphasis on the treatment of employees’ needs and interests, consistent with their social expectations. The incorporation of socially responsible aspects of human capital management can have important implications for company performance. In order to ensure that the adoption of a socially responsible perspective produces positive results, a triple fit needs to be found between CSR, HRM, and company strategies. The significant factor here is not the quantity of the investment: it is a matter of developing a responsible culture that flows from the top management of any organization through to core operations and the lowest level of employees.

Fundamentally, our contribution here tries to provide a general overview of two key issues: (1) Is it necessary to introduce socially responsible orientation into the design and implementation of human resource policies? (2) Is it possible to find out which SRHRPs are most implemented at international level?

To address these questions, a content review of CSR reports in IBEX-35 companies, the GRI, and ISO 26000 offers clues on how to incorporate a respect for human rights, such as ethical and social relations, how to establish exchanges between the company and employees, and how to improve their welfare and working conditions.

It is noted that those companies that are committed to implementing a strategy of social responsibility in all areas of their business can stand out in the market and are building a powerful tool for attracting and retaining skilled and experienced workers.

However, CSR is more than just standardizing the HRM process, policies, and practices; it is a process of interiorizing the values, norms, and procedures we want to preserve for future generations. It is a matter of sustainability in economic, social, environmental, and ethical terms.

Suggested Exercises

__________________

¹ Turker (2015).

² Carroll (1979).

³ Carroll (1979, 500).

⁴ World Commission on Environment and Development (1987).

⁵ Earth Summit (1992).

⁶ Wood (1991).

⁷ WBCSD (1999).

⁸ Organization for Economic Cooperation and Development (OECD) promotes policies that will improve the economic and social well-being of people around the world. The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems.

⁹ European Commission (2001).

¹⁰ Dahlsrud (2008).

¹¹ Carroll (1999); Malik (2014).

¹² European Commission (2011, 6).

¹³ Matten, Crane, and Chapple (2003); Waddock (2004).

¹⁴ Nelson, Poms, and Wolf (2012, 52).

¹⁵ Drucker (1984).

¹⁶ Lockwood (2004).

¹⁷ Sharma, Sharma, and Devi (2009).

¹⁸ Barrena-Martinez, Lopez-Fermandez, and Romero-Fernández (2011).

¹⁹ Fuentes-Garcia, Nuñez-Tabales, and Veroz-Herradón (2008).

²⁰ Martín-Alcázar, Romero-Fernández, and Sánchez-Gardey (2005).

²¹ Wei (2006, 49).

²² Armstrong and Taylor (2014, 129).

²³ Armstrong and Taylor (2014).

²⁴ Paauwe and Boselie (2005); Tzafrir (2006).

²⁵ Werther and Chandler (2010).

²⁶ Freeman (1984).

²⁷ Clarkson (1995).

²⁸ Kim et al. (2010).

²⁹ Collier and Esteban (2007).

³⁰ Galbreath (2010).

³¹ Brewster, Morley, and Buciuniene (2010).

³² Dahlsrud (2008).

³³ European Commission (2011).

³⁴ Martín-Alcázar, Romero-Fernández, and Sánchez-Gardey (2005).

³⁵ IBEX-35 is the official index of the Spanish Continuous Market. The index is comprised of the 35 most liquid stocks traded on the Continuous market. It is calculated, supervised, and published by the Sociedad de Bolsas.

³⁶ Subramony (2009).

³⁷ European Commission (2011).

³⁸ Valentine et al. (2011).

³⁹ Katou and Budhwar (2007); Farndale, Hope-Hailey, and Kelliher (2011); Zingheim and Scuhster (2009).

⁴⁰ Zingheim and Schuster (2009).

⁴¹ Katou and Budhwar (2007).

⁴² Farndale, Hope-Hailey, and Kelliher (2011).

⁴³ Johnston (2015).

⁴⁴ FIFA Code of Conduct. Source: www.fifa.com/mm/document/affederation/bodies/01/62/05/88/denclenglisch.pdf

1. Integrity and ethical behavior. 2. Respect and dignity. 3. Zero tolerance of discrimination and harassment. 4. Fair play. 5. Compliance with laws, rules and regulations. 6. Avoidance of conflicts of interest. 7. Transparency and compliance.

8. Social and environmental responsibility. 9. Fight against drugs and doping.

10. Zero tolerance of bribery and corruption. 11. No betting or manipulation.

⁴⁵ Carroll (1979).

⁴⁶ Visser (2005).

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