Building relationships and managing ethical
A business planning to move its operation to a country like India has to consider many existing factors that may affect the sustainability of the operation as a whole. Without understanding how a company could effectively assimilate into the society through a well-equipped course of action appropriate to the community, that company is faced with tremendous challenges. To become successful in the endeavour, planning team must look into the ethical, economic, cultural, and ecological environment issues that govern such country.
Using reliable information about the host country’s description, the planning team can likewise design or develop business approaches that will promote success on the part of the company, as well as promote the interests of the stakeholders. Understanding sustainable development and the role of the business sector will result to a greater gain.
Background information of the company
The company is a European business that due to the higher cost of labor in that country is laying down a plan to move to India because it has lower labor cost and lower employment. Its policies on environment and health and safety standards are really advantageous to a promising manufacturing company such as this. However, starting a business in that country may require careful
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In particular, the company specializes in manufacturing ICs for computer. Its major clients include major computer, telecommunication, and other electronic manufacturing companies.
The company tries to find the possibility of starting a business so as to avail its lower labor cost for the benefit of the company. Despite the challenges, it is also receptive to possible changes that it has to incur in order to meet the social and environmental issues by undertaking deliberate approaches. It also sees its responsibility to the stakeholders and the management’s interests, non-government and community partnership, and commitment to the values and vision of the company.
The issues facing a company
India due to its significant improvement has become an “investment destination” according to Francis Cherunilam (p. 349). The reason behind is its liberal policy towards foreign investment and the “very few barriers” being experienced according to that report that made it at “41st place on barriers to foreign ownership” (ibid). Besides, according to Roderick Millar, India is highly skilled in information technology and other significant areas varying from skilled workers to skilled managerial and technical expertise.
India’s economic condition and political policy has good reasons why foreign investment is promising in that country. Ranjini Manian has enumerated some of its good points: (1) India has a population of more than one billion people, (2) salaries in India are often much lower than elsewhere in the world, and the quality of the work done by Indians is good, (3) Natural resources are abundant in India, (4) Indians are hardworking, often well educated, and usually have some English language skills, (5) India is an ancient civilization and a young nation (Manian, p. 10).
India has significant advantage for foreign investment. One of the factors is the growing youth population. Millar noted the existing population in India as the prospective consumers as well as labor market. According to him, about 68 per cent of the population live in rural areas; a total of 550 million Indians are under twenty-five years old (25); about 350 million are under fifteen years of age (15); and by 2013, the productive age between 25 to 44, will consists of 33 per cent of their population (Millar, p. 13). This generation according to Millar have “advanced knowledge, technological know-how, and an aggression” that are essential to the work demand.
India’s political condition being a “sovereign, socialist, secular, democratic republic” (Millar, p. 9) has impacts on the existing policies on foreign investment. India has a federal form of government that creates opportunity for the central government to initiate policies for improvement. However, as Roderick Millar pointed out, it was India’s 1991 debt crisis that “provided the opportunity for major economic reforms to deregulate the private sector and liberalize trade and investment” (Millar, p. 10). It was a sudden change in India being a country that restricted “foreign companies and foreign financial institutions wishing to enter the India market (ibid)” for quite a long time.
Thus, despite varying political parties in India, the country has gained respect from the people that pave the way for a more “stable government, privatization, improved education and job opportunities (Millar, p. 10),” which create a good environment for foreign business companies. Aside from that, there is a “reduction in the deficit balance of payments and favourable foreign exchange reserves (ibid)” that made the country one of the top business destination in the world.
Manoj Joshi also noted the government’s commitment in environmental protection. He noted,
“air-pollution standards for major cities, mandatory lead-free gas for new cars, a Ganges River clean-up program, the closing of hundreds of polluting factories, and an efforts to counteract the effects of acid rain” (p. 23).
The growing concern for ecological protection is heavily influenced by the growing number population combined with poverty with “side-effects of enhanced industrial activities” according to Megan Landon (p. 51). Without taking any significant action, India sees the policy on environmental protection as significant for their country. Likewise, different types of business are challenged to take values in preservation of the ecology in that country.
India has diverse culture characterized in their language, custom, tradition, and religious beliefs. In terms of language, it has eighteen official languages aside from its many dialects (Joshi, p. 11). Most of these languages are rich and well-developed; however, despite that most of them are bilingual and multi-lingual with English as the widely spoken since it is the language in “higher governance” which includes government, media, and education (ibid, p. 11, 12).
India celebrates many religions with Hinduism as the major religion and Muslim as the minor one; each religion is respected by everyone (Joshi, p. 14, 15).
Generally, religion and language are not seen as a major hindrance when arranging for business transfer to India; its customary practices such as family ties and caste system are not major issues in the workplace because more often than not, Indian people are very receptive and adaptive to changes. According to Manoj Joshi, the “link between occupation and caste no longer exist, [and] social intercourse between castes remains limited” (Joshi, p. 17). Normally, the Brahmans dominate the higher positions such as administrator and teachers while subcaste occupies the clerical positions. Thus, the caste system is regarded as a social support system and not to discriminate people from lower caste.
Indian people’s perception of Western culture is another advantage because they look up to them as superior and admirable. But despite that, corruption is endemic in their culture. The people have stereotypes according to Joshi that irritate Westerners. For instance, educated Indians are arrogant “who refuse to conform to the stereotype of semi-literate Third worlders” (Joshi, p. 25).
India’s ethical values are based on their cultural beliefs. These govern their motivation and perception about things in life. As a person establishing a business in India must understand these values. Similarly, he also needs to know some of the cultural description of the people to help mingle with them. Ranjini Manian has listed them down as (1) lack of jobs keeps extended family physically close and dependent on each other, (2) larger interdependent families, (3) nurtured interdependence, (4) mobility based on necessity, (5) professionally less opportunistic, (6) punctuality is lax, (7) sovereign freedom cherished, control/loss of freedom tolerated in day-to-day life, (8) history has molded tolerance of incompetent authority, (9) take things as they are, (10) serious and conventional, (11) get what is available, (12) hierarchy is a way of life, and (13) caste system limits their mobility.
India has a very favourable policy regarding foreign investment. Cherunilam stated that the creation of Regulations on Foreign Institutional Investors in 1995 has defined provisions that constitute governing responsibilities and procedures favouring foreign investment. Cherunilam further stated that the Joint ventures gave way for the “introduction of international practices and systems to the Indian Securities Industry” allowing investing in a company “up to an aggregate of 24 per cent of equity” (ibid). Possible increase may elevate to 40 per cent as approved by the governing body. This legal condition is an improved policy to encourage more investors in India.
According to Millar, due to the constant reforms policies governing foreign investment, India has gained positive reforms to eliminate hindrances in the working relationship of India and other countries (Millar, p. 11).
The Company’s Deliberate Strategy for Corporate Responsibility
In the first place, the company understands its role in the changing world especially that everything is turning global where individual rights is widely recognized and that business sectors must integrate into their planning specific strategies to sustain the economic, political, social, ethical, and ecological development of the country.
Sustainable development issues involve holistic approach that whatever action is undertaken at the present will likewise affect the future. In the business sector, it has to look into how the company’s operation affects its stakeholders and the environment. In the same manner, it would like to ensure that it both protects the interest of the company and the people at the sphere of its influence. Taking care of the environment is important issue to consider because it directly affects the lives of the stakeholders.
Company’s Ethical Approaches (values and vision)
Vision: The company is committed in a life-long development of a society through providing quality service and products.
Mission: Deliver optimum services and solution to meet the existing needs of the employees, clients, and community.
Values: the basic and top priority of the company is to provide quality services and products to its stakeholders in support to the development of the community and country. Along this line, the company believes in safety, innovation, integrity, honesty, and respect for all its stakeholders.
Basic in company’s approaches is the creation of a work environment that does not contradict the cultural orientation of the people. Instead, it should ensure equality and fairness in terms of compensation and incentives, individual/professional growth, promotion, and hiring practices. Other assistance should be extended to the immediate family members as a sign of respect to the culture of the people. The company will also set policy that protects and promote environmental care.
Stakeholders Analysis and Management (ethical dilemmas, environmental and human rights issues)
Stakeholders may include the top executives, workers, customers, the workers’ family, suppliers, lenders, government, and the community. Each stakeholder has its own interest and concern that must be met along the way. This mean that the company must allocate planning that will meet each need simply because the company has to understand that the success of the business lies on the people that constitute the operation as a whole.
However, to analyze the stakeholders, it is required to conduct research in order to help design effective strategic actions. To pay this concern greater attention, it is also recommended to hire the service of public relation practitioner who is responsible in promoting good relationships of stakeholders and the company.
Given the unique characteristics of the stakeholders, the company has to employ strategic actions in order to win their support and loyalty to the company. Larry Lamb, Lawrence Lamb, and Kathy McKee stated “employee satisfaction pays measurable returns” (p. 8). The employees as the major players in the existence of the company want to be compensated for their contribution, in which salary alone may not satisfy them.
Lamb, Lamb, and McKee noted a result of a research, which says, “employee satisfaction depends on the quantities of trust and integrity that bind individuals to organization” (p. 9). Employee satisfaction is the most neglected issue in an organization but it provides more opportunity for growth and success of the business. To carry it out, the company may develop a management team that will be a channel for communication of every department through a representative where problems are discussed and found solutions.
If the employees are satisfied, that will be transferred to the customer. Customers/clients will have satisfaction because of quality and sincere employees reflected in the products made and quality of service through warm relationship. The result is increase in profits.
The immediate family members of the employees and the community as a whole are also crucial to the organization every time it attempts to make critical and strategic decisions especially if the consequence affects them. If not handled well, these people will form an activist group against the company that will result to negative publicity. Community relations are very crucial to the existence of the company; so, it must take the responsibility for every decision it makes. Lamb, Lamb, and McKee noted that the good practice for effective community relations despite self-interest is helpful enough to win support. They noted,
“through environmental consciousness, cultural support and civic engagement helps develop and support a higher quality of life for an organization’s employees and members, thereby making it easier to attract and retain quality employees” (p. 37).
Non-government Organization and Community Partnership
Partnership with non-government organization and with community is another priority of the company. To do this, the company will have to initiate projects that will meet some of the needs of the community such as scholarship, dental or medical mission, etc. Similarly, it has to open its door to some non government organizations that pursue community’s welfare such as environmental issues, health issues, etc. It has to create a public relation team to do the task of maintaining good rapport with the community.
Cherunilam, F., International Business, India: Prentice Hall, Inc., 2007.
Joshi, M., Passport India: Your Pocket Guide to Indian Business, Customs & Etiquette, USA: World Trade Press, 1997.
Lamb, L., Lamb, L., & McKee, K.B. Applied Public Relations, USA: Routledge, 2005.
Landon, M., Environment, Health and Sustainable Development, USA: McGraw-Hill International, 2006.
Millar, R., Doing Business in India, India: GMB Publishing, 2006.