MENTAL ISSUES IN THE BLUE COLLAR INDUSTRY

EXECUTIVE SUMMARY Through research and analysis, we address the issue of CSR regards mental abuse in the blue-collar industry, its influences on primary stakeholders, along with the main

BUSM4692 – Managing International Business Responsibly

Assignment 1: Group Research Report Lecturer: Mr THANAPAT KIJBUMRUNG

MENTAL ISSUES IN THE

BLUE-COLLAR INDUSTRY

Team: COMPETITIVE TEAM

Word count: 1920

I declare that in submitting all work for this assessment I have read, understood and agree to the content and expectations of the Assessment declaration (Links to an external site.)

Table of Contents

EXECUTIVE SUMMARY

Through research and analysis, we address the issue of CSR regards mental abuse in the blue-collar industry, its influences on primary stakeholders, along with the main challenges emerging globalization for enterprises, particularly MNCs

The first half of the paper addresses the issue of mental abuse toward blue-collar workers by analyzing MNCs' factories As an outcome, MNCs have to consider and weigh their opportunity cost since balancing the stress, depression, and burnout of workers with production efficiency This phenomenon is a CSR issue that requires the roles of companies to play out to share its benefits across the firms and interests of stakeholders

Second, research using academic sources and enterprises' practices, symbolize companies behave

in globalization trend and how MNCs are facing this critical element when emerging Expressly, the pressure of repeated schedule and working pressure remain while the benefits and compensation are not adequate As such, the result shows that the production increase leads to health degradation Managers have to face ethical and challenging decisions to ensure the sanity and well-being of laborers and the performance of the company

Lastly, employees are one of the stakeholders, along with many primary stakeholders, such as customers, employees, suppliers, owners, competitors, and the environment The government and media are two noticeable external factors influencing companies' human resources management Globalization makes the world market become flat and require many suppliers to fight by value to achieve success

The report concludes that mental health is amid the emerging CSR issues, challenging firms' efforts, and engagement to blend it into their core values Doing so will enhance workforce quality and their image in globalization significantly

Introduction

Employees and consumers in today's socially responsible world put a focus on working for and investing their money with companies that value corporate social responsibility (CSR) (Schooley 2019) Besides the good sides, companies, especially multinational enterprises (MNEs), also have negative effects on the countries such as environmental pollution, health, and safety issues, labor exploitation (Ferdausy & Rahman 2009), harming facets of employees There

is more and more evidence showing that both the matter and the background of work may affect the creation of mental health issues in the workplace, recognized as a top priority by the World Health Organization (WHO) (2000, p 8) Because of such harm, CSR exists to ensure balanced and improved the ascendancy of the environment and society without reducing economic efficiency (Nejati, Shafaei, Salamzadeh & Daraei 2011, p 2)

This paper will clarify the selected problem first with a detailed review of theoretical perspectives Then, those causes and effects in practice will be analyzed to cope with the important challenges that businesses face with the correlation among key stakeholders

I Analysis

1 Identify chosen CSR issue

Problems with mental health at work are the result of a dynamic interplay between work type, organization and management of the workplace, the employees’ skills (World Health Organization 2019) in order to achieve economic goals According to Dacosta & Strassfield (2019), more specific actions provided are forced blue-collar workers who work below optimal levels, for long periods of time, limited space for work and living, and harassment and sometimes end by suicide

From an economic standpoint, instead of using energy for working, workers with psychological harm will turn their energy to protect themselves (Hirigoyen, 1998; Wyatt & Hare 1997) With mental instability, workers tend to be absent more from work (Thomas Peter 1997) and

to claim medical compensation due to stressful work (Bassman 1992) This makes organizations are said to be not credited and reputable (Davenport, Schwartz & Elliott 1999) As a result, while businesses have to deal with costs and performance due to mental harm workers who can affect

production, purchasers put up with price and quality problems It also makes companies disciplined

by government and society for breaching legal responsibility and social rules in the community

Obviously, issues related to mental injury of the blue-collar industry are of particular interest

as it relates to three domains of businesses such as ethical, legal and economic responsibilities (Schwartz & Carroll 2003, p 508), which MNEs must take into account otherwise will affect their international business Consequently, in addition to complying with legal obligations, companies must also recognize their influence on the environment and society (Werther & Chandler 2011, p 6)

to choose the mental values of workers as one of the factors to adjust the proper operating policy of the company

2 Literature and Practitioner Review

Globalization makes the world become flat and bring numerous benefits but also put massive pressure on the shoulder of the employees in the multinational corporations As a result, the

majority of workers in the workforce reported that they had suffered severely damaged their

emotions (Arvidsson 2010) This matter might lead to mental sickness if the worker is

continually working in a considerable pressure environment (Newhouse 2010)

Prejudice can be considered as one the most harmful element that plays a significant impact

on sabotage the mentality of the workers, which consist of cultural differences, ethics, genders, and social-class discrimination Many companies tend to exploit the employee's ability and take advantage of their weakness rather than take care of worker health status (Devinney 2009) Take Foxconn as an example; to maximize the revenue, they forced the worker to work overtime

frequently and pay minimum wages, and when the worker does not obey the orders, the manager will punish them by shouting or hitting methods (Bae & Cameron 2006) Consequently, many workers chose to suicide to end their pressure, and the significant number of workers quit the jobs (Michael 2004) moreover, as the men hold the majority of the critical position in numerous corporations worldwide over the women workers which created the inadequate gender issues and makes the problems related to the bully or sexual harassment on female employees become

worsening (Ackers &Parker 2015)

The tension comes from a toxic working environment is another factor that causes mental sickness for the workers worldwide (Koller, Goedhart &Wessels 2010) When a worker cannot

meet the deadline or complete the task from the manager, they will experience a difficult time in the office, especially in a competitive environment (Summers, Humphrey & Ferris 2012) The rapid increase in the number of high-skilled workers jeopardized the employment status of the current employees, which turn the working environment to become a harsh and very competitive place (Clarkson, Overell & Chapple 2011) For the blue-collar worker that lack essential skills, their mental and financial conditions are poorly deteriorated This situation has been exploited by many firms to force their workers to work overtime with a minimum wage On the other hand, a stressful workplace might lead to depression and frustration within the employees Case in point, Densetsu a Japanese company that has witnessed several suicide cases within their company due

to the stressful and toxic environment the workers have to endure (Manetti & Becatti 2009)

However, the effect of emotional abuse is not exclusively related to a special status but also spread to the firm's interest and social wellbeing program

Concern about health:

When a worker always experienced emotional abuse, they will suffer stress and

depression and lead the deduction of their productivity Female employees are vulnerable to depression and anxiety, particularly when they back to work from maternity leaves periods (Abrahamsen & Aven 2012) During maternity leaves, female employees still received wages from the company, and after back to work, they have to work more than usual and combine with their problems as a mother; their health status deteriorated quickly (ILO 2014)

Concern about Economic:

Put on a global perspective, the total amount of days the worker takes absent from their job due to mental illness is roughly 13 billion days, and numerous companies have suffered significant deduction in their profit (Aldred 2013) Toyota corporation witnessed a significant number of day-offs because of mental illness from the employees in the past, which lead to a 10% reduction in productivity at that time The company has applied many solutions, such as building a health center and providing psychological doctors to ease the situation Moreover, having problems with emotional abuse will decrease the firm reputation and also afraid the potential workers in the future (Ben-Haim 2012)

3 Key Challenges

Kenneth E Goodpaster (2003, para 1) says in his article "Some Challenges of Social Screening" about the purpose of social investing is to "enhance the function of conscience in the modern global business corporation" (Goodpaster 2003) The challenges that MNCs and MNEs are facing are with their stakeholder principles (customers, employees, suppliers, owners, competitors, and the environment)

Lacking or Poor benchmarking the principles are one of the critical challenges for

MNCs to manage workers' sanity Benchmarking is a measurement and a ruler for corporate responsibility, whether businesses act beyond and above their statue of requirements Goodpaster (2003) also assesses that the indicator tool benchmarking the company's commitment would manifest itself both to outside observers and management (Goodpaster, 2003) It can be customer evaluation, regulatory actions, and how the company is implementing practices in production and manufacturing In this case, businesses need benchmarking tools to measure employees' and workers' mental health Also, the international setting requires such conditions that modify the norms and culture or society and depend much on the knowledge and interpretation of the motive and values of others, egocentric and ethnocentric tendencies (Brenket 1998) The challenge when making this benchmarking tool is the standard of practices may or may not fit with the interest of other stakeholders (Drebes 2014)

Implementing practices by binding code of conduct with labor rights when emerging globalization contradicting production while attracting more international buyers We

are taking the viewpoint from Foxconn's origins on their workers' suicide continuously in the past decades The main reason is that Foxconn has to meet quotas given by buyers and to produce such mass quantities, a sacrifice made upon labor rights (Margaret 2013) Some managers may choose a safe route and implement a code of conduct for the safety and good manufacturing practices since international business partners required (Drebes 2014) Nicolas Sirven (2017, para 3) and co-writers expressed in their research that the "evolution of productive processes towards flexible or very automated styles of work reveals that enhanced vectors of

productivity are responsible for why health indicators are in the red" (as cited Sirven, Cardebat Coupaud 2017, p 563) The correlation is relative when the line of work requires precision, repetitive, and rotating schedules that lead to health degradation Factories and firms will suffer

if their code of conduct strictly follows health regulation, which is a huge challenge when they have to sacrifice their production with non-productive activities

Emerging globalization backfire on implementing and forming the code of conduct.

While international firms have to follow specific rules to operate, they also have to promote transparency, trade cooperation, anti-corruption, environmental protection, and a world community (Goodpaster 2003) When operating in another country, offshoring, firms have to consider a formal and informal institution, which is substantial legal or regulatory action and norms On the one hand, businesses have to maintain the financial and economic health of their own On the other hand, they also have to "improving the lives of all of its customers, employees, and shareholders by sharing with them the wealth it has created" (Goodpaster 2003,

p 244) Some countries have shown no support or do not have supportive acts on CSR upon firms which makes it non-compulsory Therefore, some firms offshoring in these countries, such

as Vietnam, to maximize their production (Wang 2005) A case study of Fang Lee Cooke (2016)

in December 2016 about a Garment company Garmen Co is a Hong Kong owned multinational‐ garment manufacturing company that has been operating in Sri Lanka for nearly 20 years Its shop floor workers are primarily young women from villages The company needs to comply with international standards, including the International Labour Organisation labor standards and ISO standards, such as environment protection, occupational health, and safety (OHS) protection for employees to meet the auditing requirement of its international client firms, which are mainly large western retail corporations (Cooke 2016, p 6) The reasons are developing countries have low governance quality, and the cultural and institutional distance is relatively high (as cited in Tulder, Wijk and Kolk 2008)

4 Key Stakeholders

Stakeholders related to individuals or groups who have a close relationship with a business They are interested in, sharing resources, impact or directly affect businesses in business strategies, plans and financial matters (Freeman 2010) Therefore, emotional abuse is a crucial issue when it plays a huge impact on the interest and profit of many business ventures

Related to this Corporate Social Responsibility (CSR), the blue-collar worker becomes the main stakeholder The employees who worked constantly in a toxic environment will produce a substandard performance compared to other workers that working in a healthy environment due

to the stress and lack of benefits (Mausumi 2017) And the company that successfully applied this CSR theory into their policy become harmony (Martinsson, Kwak, Bergström, & Hellman 2016) A prominent example comes from Sony Corporation, they are one of the first company in the world build the Employee Assistance Program to help ease the employee's personal matters and all the fees have been paid by the company, this project prompted the company’s sales and increase prestige (Meswani 2008)

Multi corporations also need to take special care on the business collaborators The globalization makes the world market become harsh and force many suppliers to compete by price to attain limited customers Those conditions pave the way for those suppliers to execute numerous activities against the law to maximize profit such as forcing the worker to work long hours without break and build a workplace that doesn’t meet the safety criteria If a multi corporation picks a wrong partner to collaborate, its reputation will be decreased heavily (Zimmerman & Blythe 2013)

The central government in a country has the ultimate strength to interfere or regulate when indigenous or foreign companies commit wrongdoing behavior on their employees during operating within the nations (Wong, Gray & Sadiqi 2015)

In recent years, emotional abuse and ensuring the rights of workers in the workplace emerging as

a very hot topic for the mass media and the issue has become ubiquitous in worldwide (Williams 2017)

II Conclusion

Enhancing the company’s image by applying CSR into the policy is a great opportunity for a business to gain an upper hand to their competitors In this situation, abusing the mental toward blue-collar employees is an emerging topic that draws much attention from the public Indeed, CSR is an important factor that can decide whether a corporation will strive or not