Addressing Child Labor-The Case of Bayer

Addressing Child Labor-The Case of Bayer

Case Summary

The case concerns a global issue at Bayer Company. Bayer is a multinational corporation headquartered in Germany but with subsidiaries worldwide. Concerns exist that the Indian subsidiary, Bayer CropScience, uses child labour along its supply chain. Executives from the parent company had come to India to deal with the emerging issues about the company’s position regarding child labour usage. Farmers use children on cotton farms, which goes against the company’s policies (Lawrence & Beamish, 2013).

Notably, the realization that Bayer CropScience was involved in child labour came as a surprise. Initially, Bayer operated alone, hence being able to implement global UN Compact requirements on human rights. However, the company later acquired CropScience, an Indian-based agricultural company. The acquisition meant that Bayer also acquired the parties dealing with CropScience. It seems that most Indian farmers did not treat child labour as a severe breach of human rights; hence, the act was acceptable. That means that Bayer CropScience inherited the practice from other Indian-based partners.

The human rights concerns raised in India against Bayer Company are against its established record in human rights (Lawrence & Beamish, 2013). The company had invested immensely in corporate social responsibility. One of the commitments to the course was the adoption of the ‘Ecological Evaluation of New Investments’ that sought to ensure that its investments were not destructive to the environment. Bayer had also introduced several guidelines, including the supplier code of conduct, to ensure adherence to human rights best practices along its supply chain. Besides, in 2000, Bayer Company was among the co-founders of the UN Global Compact. From these commitments, the company’s situation in India is mainly attributable to Indian customs rather than company faults.

Critical Aspects of the Case

Ethical Issues

Bayer’s case raises contemporary ethical issues faced by multinational companies participating in global business. Some common ethical concerns among international businesses include child labour, trust and integrity, outsourcing, workplace diversity, and working standards and conditions (Soproni, 2009). Companies that operate internationally are expected to comply with ethical standards in the host country. However, sometimes, the standards established in a company’s home country are stricter than those set in the host country. Such a situation presents a dilemma to a company since it is challenging to decide what they will comply with.

To that end, cultural considerations may make or break a company. Accordingly, in this case, cultural considerations could be the host country’s history, customs, and traditions (Soproni, 2009). For instance, Bayer CropScience operates in a country where child labour is mildly acceptable. Given the extreme poverty levels among a section of the population in India, child labour could be a means of survival. Although banning children from working on the mentioned cotton farms is a positive move in a global sense, that may deny them basic needs like food. In this case, Bayer CropScience had two options: comply with international human rights principles or take the blame and continue operating like other companies.

Global Business Leadership

Another issue that arises from Bayer Company’s case is global business leadership. If a multinational corporation leader is effective locally, that does not necessarily mean they will be effective internationally. This is because different countries exhibit varying cultural beliefs, which may affect the acceptance of a business leader (Hassanzadeh et al., 2015). For instance, the executives of Bayer’s head office in Germany may blame their Indian counterparts for exhibiting incompetence just because child labour occurred. On the other hand, one may argue that the top leaders of the Indian-based CropScience were sensitive to the needs of the Indian population.

Making Assessments

I relied on UN Global Compact ethical principles to develop critical elements of the case. The first principle of the UN Global Compact is that companies must respect and support human rights (Global Compact Network, n.d.). Respecting human rights means companies should conduct due diligence to avoid practices potentially infringing on human rights. Also, these companies may support human rights by addressing adverse activities in their supply chains that affect the implementation of globally accepted human rights.

Also, the second principle of the UN Global Compact formed the basis for coming up with the ethical issues relating to Bayer CropScience Company. The principle calls upon multinational corporations not to be complicit in human rights abuse (Global Compact Network, n.d.). It was complicit in abuses committed by other companies, the government, or other agencies. Such is bound to happen in jurisdictions with weak governance and regulatory frameworks. For instance, Bayer, a traditionally human rights-compliant company, was implicated in child labour by its Indian partners and cotton farmers. Also, the weak government-backed regulatory attempts meant that dealing with human rights violators in the country was almost impossible.

Moreover, the fifth principle of the UN Global Compact that abolishes child labour formed a basis for identifying critical elements raised in the case. Almost all governments across the world have banned child labour, India inclusive. Although children are defined as people below 18 years old, not all individuals in that age bracket are forbidden from working (Global Compact Network, n.d.). The economic situation in a country and the nature of work are vital in determining what constitutes child labour.

Outcomes, Solutions, and Resolutions From the Case

The use of underage children in performing factory work is the modern form of slavery. It is worse that some of these children work in highly hazardous environments. However, what has come out is that some companies and their executives may not be aware that child labour occurs along their supply chains. However, the world is changing, and the implicated companies are pressured to abandon the retrogressive practice. The UN and globally aware customers play a significant role in eliminating these practices.

Eliminating child labour along the supply chains requires a direct effort by affected companies. One effective strategy that may be implemented to achieve a supply chain devoid of child labour is requiring third-party certification for suppliers. Such accreditation should clarify that the supplier does not participate in child labour practices. Also, the company’s internal auditors should implement a community engagement program to help them recognize community standards.

Another potential solution to child labour concerns is creating a specialized team to deal with child labour issues as they arise. The team should be drawn from the company’s sustainability segment and must understand issues relating to child labour in a given community. The specialized team can be deployed to the factories of third-party vendors to ascertain that the practices in these companies are devoid of child labour.

Reflection About Global Leadership

The Bayer CropScience child labour issue raises critical issues that leaders in multinational corporations must prioritize to succeed. Firstly, they must address cultural conflicts between home and host countries (Salicru et al., 2016). To that end, these leaders must not force people in the host country to conform to the mother country’s cultural standards. For instance, the case against child labour in cotton farms in India could be far-fetched. Even though child labour abolishment applies globally, it does not mean that children below 18 years cannot work in specific circumstances (Lawrence & Beamish, 2013). Such circumstances include when children assist their parents in performing some tasks. These executives must also be aware of the glaring reality that the poverty levels in some countries require these children to work to survive.

Another critical issue of the Bayer case is the need for company leaders to manage local and global approaches. Due to cultural and other differences, tensions between regional and international headquarters offices are inevitable (Salicru et al., 2016). Other factors that contribute to these differences include diverse local needs and differences in customs and regulations, among others. Influential leaders must, therefore, navigate this constant duality. Global standards should be infused into regional offices so they do not disrupt their customs. To that end, executives from Bayer’s headquarters in Germany must consider acceptable circumstances in India under which children can work. Finally, the child labour crisis also emphasizes the need for businesses to accept the influence of external forces. External forces are factors that are beyond a company’s control. For instance, Bayer CropScience cannot influence hiring decisions by third-party vendors. Therefore, the company should know where to stop or risk losing crucial global partners.

References

Global Compact Network. (n.d.). The Ten Principles of the UN Global Compact. UN Global Compact Network Canada. Retrieved September 1, 2022, from https://globalcompact.ca/about/ungc-10-principles/#

Hassanzadeh, M., Silong, A. D., Asmuni, A., & Abd Wahat, N. W. (2015). Developing Effective Global Leadership. Journal of Educational and Social Research, 5(3). https://doi.org/10.5901/jesr.2015.v5n3p15

Lawrence, J. T., & Beamish, P. W. (2013). Globally responsible leadership: Managing according to the UN global compact. Sage Publications.

Salicru, S., Wassenaar, E., Suerz, E., & Spittle, J. (2016). A case study of global leadership development best practice. OD Practitioner, 48(2), 12-20.

Soproni, L. (2009). Ethics in international business. Analele Universităţii din Oradea, Seria Relaţii Internaţionale şi Studii Europene, 1, 126-138.

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Addressing Child Labor-The Case of Bayer

2. In your opinion, what were some Critical Aspects of the case that were identified? What were some Critical Aspects that you perceived to be very vital? (Minimum 1 page)

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