Group Report: International and Comp HRM

1. Introduction

In the global context of business and commercialisation, the system of incorporating a specific code of conduct within the core policies of a company is critical. Code of conduct allows compliance to fair trade policies and regulations that are accepted on the international standards. The present norm of international business requires framing important and relevant codes of conduct to attain business goals and objectives without the violation of human rights, labour laws and environmental codes of conservation. The emergence of the code of conduct and prioritising the same came to the surface due to several cases of infringement of rights. For instance, lack of due payment to over-worked labourers, not offering optimum working conditions in the workplace, and low wage rates were some of the causes (Silva et al., 2019).

The purpose of this report is to highlight the extensive significance of comprehending the myriad cultural differences that exist among the operations of multinational companies (MNCs). It will elaborate and discuss in detail the relevant HRM policies and regulations that enable adherence to a proper code of conduct both in the environment of the professional workplace as well as in the operations of the firm. The report will entail the Code of Conduct policies adopted and propagated by Burberry for maintaining fair trade relations in the international market.

2. Critical Examination of cultural differences and understanding their significance for firms

Any large scale MNC performing worldwide across nations has the permittance to utilise various resources and raw materials of several nations. This leads to the accumulation of a diverse segment of international talents coming from myriad socio-economic, political, environmental and ethnic backgrounds. As a result, the physical, financial, human and intellectual resources have the influence of their own regions. Cultural disparities in MNCs like Burberry emerge out of the extraction of raw materials, its distribution, abiding by the nation's political and social norms, and recruitment of regional talent that diversifies the work base. Establishing a certain code of conduct can create a bridge to link the disparity and differences between the socio-economic, political, environmental, religious and language among the co-workers in the company (Silva et al., 2019). Abiding by the consumer rights, data protection rights, limitations on the extraction and utilisation of natural resources and maintaining sustainability in business must be taken into consideration while understanding the cultural difference among various individuals. It has been observed that administering and sustaining the international standard of code of conduct in a firm has been essential and beneficial in creating a work environment that is devoid of discrimination based on cultural differences. This leads to a morale boost and individual motivation among the staff, making them more committed to their roles and duties (Perry and Wood 2018). To put it simply, international corporations like Burberry, which have made its progress towards globalisation of its business operations, can adequately sustain or become more victorious in international functions, given that the company has comprehensive knowledge concerning various cultural origins of workers operating within the firm. It has been observed that companies that extend their business functions to several parts of the globe abide by the political, social and economic laws and regulation of talent management, recruitment of employees and fair usage of raw materials. This is done with the incorporation of the code of conduct policies to avoid any lawsuits. It efficiently reduces considerable expenses as the workers hired from the regional communities are paid according to the payment structure and regulations prevalent in those communities (Silva et al., 2019).

Burberry has laid down its Code of Conduct which primarily focuses on the betterment of international business practices. Adherence to these policies is mandatory for all the staff, officials, workers, and any third parties engaged in their business operations. The Code of Conduct of Burberry has been diversified into five principal areas: their colleagues, brand, community, responsible business actions, and the planet. For instance, Burberry offers adequate working conditions like flexible and standard working hours, optimum temperature, necessary breaks and compensations for their employees while working extra hours (Perry and Wood 2018). Burberry also offers remuneration and benefits based on performance to promote a healthy work atmosphere. This boosts the dedication of the employees.

While functioning with a region's local resources and raw materials, Burberry abides by all government protocols and pays the required taxes. Training and education programmes are also provided to employees when local talent is hired for the operations of the firm. Compliance with environmental protocols like conservation of non-renewable resources and following energy preservation methods is integral to the company (Bayer et al., 2018). Being an MNC, Burberry has also penetrated into developing markets to boost the economy of the nation. Burberry has penetrated into Asian markets and groomed its product line according to the needs, preferences, tastes, and lifestyles of the Asian communities to expand internationally and boost the economies of scale (Perry and Wood 2018). Similarly, the price range of the customised product lines is also stipulated according to the average annual income rate of the target consumers. For this, the firm deploys its R&D technology to conjecture the age, income range, lifestyle and fashion habits of its target consumers and the products they are more inclined to purchase. The standardised Code of Conduct of Burberry that obstructs discrimination or violation of workers, staff and environment has additionally contributed to the company’s expansion in these markets. It has not only sparked a high rate of sale for the firm but also serves as a milestone showing how an adequate understanding of cultural differences in business is necessary for the company to flourish (Bayer et al., 2018)

3. Identification of HRM policies associated with understanding cultural practices

Human Resource Management policies and the functions linked to them perform a vital role in forming laws and regulations that are directed at producing and encouraging standard principles of code of conduct devoid of any discriminatory practices within the company's work culture. HRM policies and strategies are required for creating an all-inclusive, fair, honest, non-prejudicial and non-biased professional environment and company workplace that involves fair trade relations with the respective authorities involved in its business. The HRM policies help in integrating them successfully within the framework of well-planned work culture. For this reason, HR supervisors and managers require to diversify the segment of job prospects for an international pool of appropriate candidates or staff. Hiring a wide range of workers from different socio-economic backgrounds must not be associated simply with the local conditions of business performance (Bayer et al., 2018). It must be portrayed on the senior management executives and members who are committed to making choices for the companies as well as for its target audience base. It should be executed in accordance with the various code of conduct and policies that are inclusive in the HRM programmes of the firm. It must be supervised and monitored by the HRM administrators and undergo necessary audits to suit the organisational objectives at all levels of operation. The initiatives incorporated by Burberry to promote the Code of Conduct in all levels of its operations are explained below:

3.1 Fostering Diversity, Inclusion and Equality

This policy underpins the firm’s approach to global diversity and inclusion. It promotes the inclusion of staff, employees, workers and officials from different socio-economic, political and ethnic backgrounds. It prevents any discriminatory practices among co-workers on the basis of race, caste or religion (Flynn, 2019). Adherence to this policy is mandatory, and if any staff is found guilty of violating this code of conduct, penalties are imposed upon the individual by the company. The co-workers have separate and collective duties to perform in protecting their individual health and safety and that of their groups. Burberry, as a result, expects to preserve the highest health and well-being standards and to abide by the relevant guidelines or approaches provided.

3.2 Operating Responsibly

This approach defines Burberry’s practices of following all the protocols of tax policies, data security, information security, consumer rights preservation, and anti-bribery laws. It stated that Burberry's key business operations and functions are aligned with these laws of integrity, honesty, and justice for maintaining fair trade relations. It is also related to the laws of corruption (Flynn, 2019). As per this code, Burberry has further stated that any sanctioned transmission of private information or confidential data must be performed securely as per the norms of the approved procedure. Co-workers who access, reveal or otherwise utilise private information in breach of any related practices may be enacted in a criminal offence and might also encounter disciplinary charges. 

3.3 Preserving the Brand Image

This segment involves a wide range of procedures and policies revolving around safeguarding its brand image, how the company offers importance to its consumers, and how Burberry continues to develop its marketing and industrial presence (Flynn, 2019). Burberry’s Brand Protection unit is liable for company protection practices internationally, both offline and online, and procedures to curb threats to the company’s rights and image. A certain segment of the team’s duty is to assure that Burberry has the potential to sell commodities in the industries; it stays free from outside influence without destroying the brand image. Its endeavours also involve protecting customers from toxic counterfeit goods and preserving its intellectual property rights.

3.4 Community Development

This segment emphasises how the company sustains these ethics or values and measures the brand’s approaches and strategies to community development, protecting human or labour rights, involving in volunteering activities and protecting staff across its supply chain and market compliance. Burberry prohibits any non-compliance with its moral or ethical business practices (Buck, 2019). Consequently, the brand requires its supply chain associates, whether they are offering commodities or services, to consent with Burberry’s Responsible Business Principles mutually. These strategies or policies involve adherence to Burberry’s Ethical Trading Code of Conduct, which frames the company’s position on the equitable treatment of co-workers within the supply chain, endorsing human rights and offering optimum working situations. 

3.5 Protecting the Environment

This segment outlines the strategies and procedures the company expects its co-workers and associates to abide by the laws preserving the environment while following all regional regulations and laws. These encompass climate changes, extracting water, and channelling waste and toxic chemicals (Buck, 2019). In addition, Burberry is also committed to preserving its communities and environment; the company is also mindful of utilising the water throughout its supply chain. The company tracks and encourages administration methods and technologies that necessitate the recycling of water and utilising water-efficient items. The company prevents the utilisation and release of unwanted chemicals. This is exhibited in the company’s Chemical Management procedure and policies. Burberry’s Responsible Sourcing Policy establishes high standards involving commitment to animal welfare and exclusive items. Burberry does not utilise real fur in its commodities, and the goods do not experiment on animals (Zheng et al., 2020). The approach is also formulated to assure that the company shows enough respect for biodiversity in the extensive environment.

Culture theory exhibits the social aspects of the demographics of that community which forms the focal point for implementing successful Code of Conduct strategies within the company and across all stages of its operations. An organisation like Burberry operating in the UK might have members of minority groups in its workforce (Buck, 2019). Therefore, it is essential for the company to learn about their culture as it helps the organisation with significant knowledge and information concerning the cultural disparity between the native employees from the UK and the non-native or minority members who have emigrated to the UK. 

4. Conclusion

It can be observed that the significance of understanding cultural differences is immense for multinational companies to expand in international markets. It is also essential for creating a diversified work base in the home country as Burberry did in the UK. Through the incorporation of a standard code of conduct and the information obtained from understanding cultural differences, the company can effectively expand its business ventures in distant regions like developing markets of Asia and Africa.