How can an organization’s HR department cope with the challenges of a changing, globalized world? How can a business remain ethical while reaping the obvious benefits that come from globalization? Although I doubt we’ll be able to solve these issues completely, these will be the issues we will be exploring this week.
Our first case involves the exploitation of Syrian refugees by the fashion industry in Turkey. The BBC’s investigative unit “Panorama” went undercover into a garment factory in Istanbul to expose manufactures of famous brands employing Syrian refugees and children as young as ten, all of whom do not possess a work permit and are paid as little as £1 per hour, far below the Turkish minimum wage. Included among the brands involved with the violating factory was iconic British brand Marks & Spencer, who maintain that they’re inspections have found no exploitation present in their current factories and claim the exposed producer to be an illegitimate manufacturer. They have also offered those that have been affected and are of working age permanent legal work.
The Panorama report from the BBC
As the West moves further and further away from a production economy, this will continue to be an issue faced by all but the most dedicated and diligent. Nike, Walmart, Apple, Victoria’s Secret and Nestle have all been implicated in poor, exploitative labor practices, just to name a few. Companies must extend their HR policies beyond their own boundaries. Not only should companies insist that their suppliers to fall in line with their practices, but it is also the duty of an HR department to promote ethical policies and support a culture of ethics throughout the organization. These policies should be proactive and are informed by the nature of the business activities performed. Although all companies should strive to be ethical on all fronts, the form of these policies will differ greatly depending on the mission, vision, structure, key activities and general business strategy. Let's take a moment and talk about some of the different business strategies and their accompanying HR strategies.
In 1978 Miles and Snow published “Organizational Strategy, Structure & Process”, wherein two distinct strategic segments were introduced. These identified strategic categories are defenders and prospectors. Defenders are the tried and true brands of old, unlikely to attempt to extend beyond their already comfortable market segment. This focus on stability equals an HR strategy that seeks to maintain control with a formalized management structure and equally formalized hierarchy and promotion structure. On the other hand, “prospector” organizations seek new and innovative offerings and the segments that come with them. With a focus on innovation, flexibility and an unconventional structure are the name of the game.
Michael Porter offers a slightly different perspective, identifying 3 businesses categories: overall cost leadership strategy, differentiation strategy, and focus strategy. The allure of exploitative labor practices affiliated with outsourcing may be more alluring to a business practicing a cost leadership strategy, as the goal is to keep pricing as low as possible. HR strategy must reflect the challenges faced by this positioning, while also being cost efficient. These lean HR practices should take the form of strict adherence to practical policy that maintains a rigid structure to avoid errors that create expensive setbacks. When dealing with companies that practice differentiation strategy, the role of HR leans toward a more flexible, creative strategy to entice skilled, creative employees, not to mention these companies (if successful) have the capital to experiment more in their HR strategy. A focus strategy may take the best of both worlds and usually seeks a narrower audience and as expected, HR strategy will usually end up as a blend of the two previous models listed above.
Another option to best implement an effective HR strategy is to find outside help. While many businesses are choosing to outsource their HR services with mixed results, it may be more effective to hire an HR consulting firm to help streamline your policies and bring them in line with your business’s strategy. Advisory HQ has assembled list of the top consulting firms operating in the HR realm. Aon Hewitt, Deloitte Consulting, Hay Group, Mercer, and Oliver Wyman all made the cut. Each excelling at a different aspect of the HR realm. For example, Aon brings structure in a more tailored, localized fashion with its “Globalized Business Units” strategy, effectively promoting a consistent culture across geographically diverse locations while offering strategies that are individual to the local branch.
I feel like I end all of these posts by saying that your strategy is individual to your specific business, and today is no different. Business is rapidly changing, and businesses competing in the same fields may implement vastly different strategies, the only constant is the need for ethical and humane policy. The rest is up to you.
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