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Journal of World Business 39 (2004) 49–60

Ethics in international business: multinational approaches to child labor Ans Kolka,*, Rob Van Tulderb
a

Amsterdam graduate Business School, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands b Rotterdam School of Management, Erasmus University Rotterdam, The Netherlands

Abstract How do multinationals address conflicting norms and expectations? This article focuses on corporate codes of ethics in the area of child labor as possible expressions of Strategic International Human Resource Management. It analyses whether 50 leading multinationals adopt universal ethical norms (related to exportive HRM) or relativist ethical norms (related to adaptive HRM and multidomestic strategies). Child labor is not an issue where universalism prevails. Although some multinationals adhere to universal ethical norms, HRM practices are largely multidomestic. To manage the ethical dilemmas, shown from case material, strategic trade-offs (concerning strategy context, process and content, and particularly organizational purpose) are outlined. # 2003 Elsevier Inc. All rights reserved.

Managing across borders increasingly includes difficult ethical dilemmas, as pointed out in large numbers of publications on this topic (e.g., Bansai & Sama, 2000; Buller & McEvoy, 1999; DeGeorge, 1993; Donaldson, 1989; Enderle, 1999; Van Tulder & Kolk, 2001). The field of business ethics, which aims to formulate requirements for companies and the managers who act on their behalf (Kaptein & Wempe, 2002), therefore also pays attention to multinationals. Recent attention has, following the resource-based perspective, focused on the potential of ethical capabilities to improve multinationals’ competitive advantage (Bowie & Vaaler, 1999; Buller & McEvoy, 1999; Litz, 1996). Bowie and Vaaler (1999) emphasize the high asset specificity of certain ethical commitments and the importance of avoiding their dilution, * Corresponding author. Tel.: þ31-20-525-4289; fax: þ31-20-525-5281. E-mail addresses: akolk@fee.uva.nl (A. Kolk), rtulder@fbk.eur.nl (R. Van Tulder).

leading to the argument for universal moral standards for multinational corporations. According to such a ‘market morality,’ markets would induce multinationals to refrain from cultural relativism. Buller and McEvoy (1999) take a different approach, outlining the need to gear ethical capabilities to overall corporate strategy and the vital role for strategic human resource management (HRM) in this respect. Building on the integration/responsiveness grid (Bartlett & Ghoshal, 1989; Prahalad & Doz, 1987) and Taylor, Beechler, and Napier’s (1996) Strategic International Human Resource Management approach, they distinguish three possible configurations. A global strategy might be accompanied by exportive HRM and universal ethical norms; multidomestic strategies by adaptive HRM and relativism; and a transnational strategy by integrative HRM and cosmopolitan ethics. This tripod is, however, not seen as rigid and excluding other options. Using child labor as an example, Buller and McEvoy (1999) suggest that for such an ethical issue multinationals might follow a

1090-9516/$ – see front matter # 2003 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2003.08.014

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A. Kolk, R. Van Tulder / Journal of World Business 39 (2004) 49–60

universal approach (e.g., through a corporate code of ethics), even in the case of a multidomestic, adaptive strategy. At the same time, gift giving could be an example where local traditions are respected, even by multinationals that strive for global consistency. In spite of strategic HRM and ethics, a ‘moral free space’ thus still exists, in which context matters, and where managers have to deal with conflicts of relative development and cultural traditions. As Donaldson (1996: 56) put it, ‘In this gray zone, there are no tight prescriptions for a company’s behavior. Managers must chart their own course.’...
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