Corporate Social Responsibility, Business Ethics, and Labor Laws: A Qualitative Study on Smes in Sialkot

By Asad, Muzaffar; Haider, Syed Hussain et al. | Journal of Legal, Ethical and Regulatory Issues, January 1, 2018 | Go to article overview

Corporate Social Responsibility, Business Ethics, and Labor Laws: A Qualitative Study on Smes in Sialkot


Asad, Muzaffar, Haider, Syed Hussain, Fatima, Minaa, Journal of Legal, Ethical and Regulatory Issues


INTRODUCTION

Globalization has empowered worldwide funding to stream more openly and quickly crosswise over national borders, especially to under develop and developing countries to get more noteworthy benefits (Adres et al., 2016). In any case employees, particularly working in labour intensive industries, progressively encounter a noteworthy decline of work standards (Hitt et al., 2012). Broad media exposures of infamous work practice at international plants have revamped the working conditions (Lee et al., 2013).

Uncovering a wide social resistance to detrimental impacts of globalization on working conditions, recent years have witnessed several administrative changes to control the unethical and illegal practices (Haider et al., 2016). This has happened because of understanding and importance of Corporate Social Responsibility (CSR). Several brand-names have faced severe challenges from the customers of European markets because of non-compliance with proper working conditions (Juščius & Snieška, 2008). Despite the facts that corporations have developed their rules considering labour laws but still the practices, especially in the SMEs operating in Sialkot Pakistan are far below the standards and practically they are involved in several illegal and unethical activities (Asad et al., 2011).

Investigation of SMEs involved in sportswear and sports goods manufacturing showed that they are not only following illegal practices but also not abiding the code of conduct of several labour laws (Haroon & Shariff, 2016). Despite the fact that the substance and configuration of these codes shift significantly, the greater part of existing codes look to construct themselves in light of centre traditions of International Labour Organization (ILO) (Dhaliwal et al., 2011). Fundamental standards in regards to the insurance of wellbeing and security, wages and hours, and treatment of ladies, and especially child labour are ignored (Richards et al., 2015).

Effects of CSR strategies or corporate sets of principles have moved toward becoming objects of investigations of various orders (Min & Smyth, 2014). Perceptibly, larger part of existing investigations is contributed by business and administration researchers, who frequently direct research on relationship between organization social responsibility and enterprises' money related activities, expecting to give hypothetical and reasonable introductions to companies on the most proficient method to seek after long haul benefit capacity with a CSR agenda (Hitt et al., 2012). As asserted by numerous CSR scholars, a constructive outcome of key CSR exercises on benefit could be acknowledged through different upper hands: improved brand esteem and notoriety; nearer interfaces with clients and more prominent familiarity with their requirements; higher representative assurance, and subsequently higher profitability; great relations with government and groups; better hazard and emergency administration (Dhaliwal et al., 2011; Dhaliwal et al., 2012; Min & Smyth, 2014; Adres et al., 2016).

Due to the abovementioned issues, international market especially the European market has stopped purchasing the products that are made in Pakistan due to non-compliance of labour laws (Haroon & Shariff, 2016). The exports of Pakistani SMEs are continuously declining due to unethical practices. The top most issue is child labour and lack of CSR. Thus, the basic purpose of the study is to identify the main un-ethical and illegal practices of SMEs who are not practicing CSR despite the fact that they are claiming the same. The study is significant especially for the law making bodies so that they may ensure the actual implications of CSR in the SMEs to restrict labour abuse and child labour.

LITERATURE REVIEW

For implementing CSR in SMEs the most important thing is to understand the structure of these business setups. It is also important to understand the hurdles that they face economically while implementing these practices. …

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