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Last updated: Monday, September 24, 2018

 

Electronics Industry: Challenges of Social Responsibility in Labour

Posted: Wednesday, June 20, 2018

In order to increase their performance, multinational corporations adopted offshore outsourcing and hired foreign outsourcers to undertake less important stages and form value chains.

Value chain and implications
These value chains are important for both developed and developing countries because they potentially support growth and generate jobs. The value chains are constituted by different types of businesses in a disproportionate power relationship. Wherein, leading coordinators (usually from developed countries) occupy dominant positions and have more power than other firms in the chains.

The vertically professionalised centralisation of functions and economic processes in certain regions has led to significantly growing competition. In particular, some local firms have adapted by adopting cost-cutting measures that affect working conditions. The “race to the bottom” style will have a detrimental effect on workers’ livelihoods, business performance and national development goals and cause impacts on the public in the long run. This may end up damaging the reputation of top coordinators in production chains and impair their business capabilities in general.

Therefore, it is necessary to effectively carry out social responsibility in labour in order to: Reduce reputation risk, form sustainable and professional core business practices.

Dialogue is key
It is important to foster the practice of corporate social responsibility in business and labour fields of the electronics industry by promoting intra-company and inter-company dialogues within the open trilateral framework.

In reality, dialogue is key to fostering the practice of social responsibility in business and labour fields. For that reason, dialogues should be encouraged at three levels: (1) dialogues between employees and employers (inside a company), (2) business to business dialogues and, (3) open trilateral dialogues.

Company-inside dialogue primarily concerns the employer and employees. Such dialogue should be institutionalised in the form of labour unions.

Business-to-business dialogue focuses on strengthening long-term and strong relationships based on trust and commitment among businesses. Importantly, corporate competitiveness is directly derived from the performance of the whole supply chain, which can only be achieved through effective dialogue between the company and its suppliers. Although such commitments are initially costly to multinational corporations, it will benefit both multinational corporations and local businesses in the long term.

The open tripartite dialogue refers to the involvement of non-traditional actors, including representatives of workers, employers and the government. Consideration should be given to the participation of representatives of multinational corporations (MNCs) when their status in the trilateral structure of the country is blurred.

Harmonising stakeholders’ concerns towards exercising corporate social responsibility in business and in labour is a key issue that can be achieved by institutionalising and enforcing regulatory compliance through a common commitment among stakeholders obtained from dialogues at all three levels.

H.T









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