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Homework answers / question archive / From: Janet Yoon, CEO, Colossal Corporation To: International Task Force Hello all, I hope your task force has come together nicely now that you’ve formed your team agreement and have decided on a sound project work plan
From: Janet Yoon, CEO, Colossal Corporation
To: International Task Force
Hello all, I hope your task force has come together nicely now that you’ve formed your team agreement and have decided on a sound project work plan.
I would like this team to review the Employment Issues case fil and address the following questions regarding Colossal’s fully owned subsidiary, New Brands Design, Inc. (NBD):
To inform your analysis of these issues, read the background information on employment discrimination and cross-cultural ethical business decision making (specifically focus on the "Ethical Theory in Global Business" resources).
Notice: Contains Confidential Information
Colossal Corporation maintains a subsidiary in Serafini, a small country in Eastern Europe. This subsidiary is incorporated in the state of Delaware as New Brand Design, Inc. (NBD), a company that designs, brands, and manufactures innovative electronic products and markets and distributes them for resale across the globe. NBD has been admitted to conduct business in Serafini.
NBD’s executive board is composed of six expatriates from the United States, one expatriate from Italy, and three local Serafini nationals. These 10 board members manage over 100 employees who are all nationals of Serafini.
Two of the local Serafini executives, Elena and Viktor, recently learned that their salaries are much lower than the other eight members of the executive board, and their benefits packages not nearly as comprehensive. They are upset and have lodged formal complaints with the human resources director at NBD, Max Ciccone.
Max has been dealing with the troubles at NBD for a few months and has been consulting with operations in the United States to try to find a solution. US operations decided to try to fix the problem by sending out two more expatriates from the United States on five-year contracts to replace Elena and Viktor.
The new US expatriates that NBD plans to send to Serafini are Michael and Beth. Michael is a 66-year-old who has a lot of executive experience and is the former CFO of another of Colossal’s international subsidiaries. Beth is a 42-year-old with 15 years of experience in management. NBD has applied for visas and work permits for Michael and Beth, as required under Serafini law.
Elena and Viktor are very upset, but they are continuing to do their work as usual. Max has explained to them that their salaries are reflective of their more limited experience and qualifications relative to the other members of the executive team. Despite this explanation, Elena and Viktor continue to complain and threaten lawsuits, saying they have equal experience and qualifications to at least three other US board members (which happens to be true).
Serafini is not a democracy and it has no equal-pay laws. Moreover, everyone in Serafini is required to retire at 65. The stated reason for this law is that the country must force older workers to retire so younger workers can find jobs. For this reason, the labor office of Serafini is refusing to grant Michael a work permit.
Although there is no local law prohibiting women from taking management positions in Serafini, the labor office of Serafini is known for fabricating reasons to deny women’s requests for work permits. It now is refusing to grant a work permit for Beth. The labor office claims her paperwork was incomplete, but Max has confirmed it was complete when it was initially sent. He recalls that he even re-sent her paperwork to ensure processing. To date, the labor office has not responded to Max’s many requests to confirm receipt of Beth’s paperwork.
Because of the hold-up with the permits, no action has yet been taken to terminate Elena or Viktor, and Max is consulting with US operations about what he can do legally and ethically to resolve these issues.
Employment discrimination is a specific area of employment law involving protected classes of employees. Numerous federal and state statutes put individuals into what are known as protected classes based on innate or immutable characteristics such as race, sex, religion, age, and disability. Employment discrimination law protects employees in these classes from discrimination by their employer based on the defined characteristics. However, whether or not a particular person is protected under the laws depends on the answers to many threshold questions.
For example, some statutes apply only if an employer has a minimum number of employees. For the Americans with Disabilities Act (ADA) or Title VII of the Civil Rights Act of 1964 (Title VII) to apply, an employer must have at least 15 employees. For the Age Discrimination in Employment Act (ADEA) to apply, an employer must have at least 20 employees.
Although these employee numbers are minimum threshold requirements under federal law, many states decrease or even eliminate the threshold requirements in their own discrimination laws. Many states also add additional protected classes to their laws, such as sexual orientation, which is not currently an explicit protected class in private employment under federal law. Thus, states are capable of broadening discrimination laws within their jurisdictions, making a violation of both state law and federal law in one act of discrimination a real possibility in many states.
Many federal employment discrimination laws not only apply to the entire United States, but have an extraterritorial reach; that is, they apply to US citizens working for certain US-owned or -operated companies abroad. For example, Title VII, the ADA, and the ADEA all apply to certain companies operating outside the United States; however, the Fair Labor Standards Act (FLSA), a related law that governs wage and overtime requirements, generally does not.
There are many other federal discrimination laws with varying applicability, and even more state discrimination laws. All of these laws establish rights for covered employees and place affirmative obligations on covered employers, with the aim of reducing discrimination in the workplace.
Management in the global arena involves addressing unique and difficult issues of culture and morality. Although general ethical frameworks may help you to assess management decisions in a cross-cultural context, there are unique questions that arise in global settings. The resources below provide guidance for situations involving conflicting ethical norms and customs of different cultures within the business context.
How an organization addresses unique situations involving ethics and customs will impact its success in the global arena. The first subtopic examines the role of ethical theory in global business. The second subtopic examines the role of cultural theory in global business.
