Contradictions, Challenges, And Ethics In Hutong Enterprises: An Essay.

Case study base on Hutong Enterprises: ‘Hurting the hearts of employees’

1. Consider the apparent contradictions between HE’s espoused culture and its recent actions. Why might they occur? How could they be resolved?

2. Do the two challenges discussed represent ethical or moral issues? Please use relevant theories to support your answer.

3. Does a ‘tiger’ culture inevitably lead to the exploitation of employees, or is it possible that company and employee needs can both be accommodated?

4. What advice would you provide to (a) the CEO and (b) the union leader concerning future approaches to these issues in HE?

Contradictions between HE's espoused culture and actions

In an organization, corporate morals and espoused values play a crucial role in developing the standards of an organization in terms of its business conducts. Hutong Enterprises is such an organization that is expanding its business operations based on certain espoused values that include customer priority, commitment, coherence, mutual trust and sustained improvement. Concerning HE’s corporate practices; it is difficult for an individual to think that the organization can be associated with unethical and disgraceful activities. This is because the company operates on certain core values and practices that advocate the interest of the employees. The human resource management policies are based on the organization’s core values that promote the value of the workforce. In this prospect, Hutong Enterprises endorse the welfare of its employees and aspires to maximize the privileges granted to the employees (Alfes et al. 2013).

The contradictions occurred between HE’s espoused culture and its actions as the activities of the company are suggestive of the fact that the actions carried out by the company contravene with its own business ethics. The company is indulged in activities that lead to the persuasion of its workforce and does to contribute towards providing countermeasures that can eradicate such issues. It is quite challenging for multinational organizations to adhere to their social and corporate values because of the frequent changes occurring in the global business environment (Wang  and Hsieh 2013). For instance, the company has terminated approximately 5000 employees from a job because of the declaration of the Labor Contract Law of 2005. The discrepancies between the company’s core values and its subsequent actions are a result of the changes occurring due to the external factors. The inadvertent consequences of the policies are affecting most of the multinational organizations and it is not always possible for the organizations to neglect them. It would be wrong for such organizations to believe that these effects would not affect the business operations. All company policies should be sporadically reassessed to minimize the effects of the corporate culture on the employees (Mishra, Boynton and Mishra 2014). The companies implement the organizational values to promote conducts that the organization finds preferable. Organizational values or core values of an organization provide the frame for the organization’s culture (Alvesson and Sveningsson 2015). However, it is also necessary that the core values of the organization must support the operations of the organization or else it would be unprofessional for an organization to espouse values that effects its long-term objectives (Bourne and Jenkins 2013).

The discrepancies are only meant to be resolved on ethical grounds depending upon the actions of the company towards its employees. Though it can be considered that the company has been persuaded under prevalent circumstances to go against its ethics, it should be reconsidered that the actions undertaken by the company have oppressed the interests of its employees. In addition to that, the organization should adapt to practices that do not affect the shareholders and stakeholders of the company (Trevino and Nelson 2016). It is necessary for the company to determine a better way to derive rational benefits from its employees and not to exploit them in doing the same (Crane and Matten 2016). Business organizations such as Hutong Enterprises should always be accountable for their activities towards their employees as well as the people associated with the organization both internally and externally (Mone and London 2018). From multinational companies such as Hutong Enterprises, it is expected that these companies promote an enhanced standard of living among their employees and their target audience by dodging business practices that might hurt the sentiments of the people associated with the organization (Schneider, Ehrhart and Macey 2013).

Challenges faced by Hutong Enterprises

Hutong Enterprises faces challenges with the management of the company even after working on credible organizational ethics and moral values. The challenges faced by the company mostly indicates ethical issues instead of moral issues. The first challenge encountered by the company is regarding the disruption of the mutual trust between the employees and the company (Weiss 2014). The company has pressurized approximately 5000 of its long-term employees to resign and rejoin the organization based on short-term contracts under the declaration of Labor Contract Law of 2005 (Gallagher et al. 2013). This action has drastically created an impact on the psychology of the employees and breached its own espoused values. It is very important for an organization to adhere to its business ethics and focus on the moral standards of organizational behaviour. In this prospect, the company has failed to support its ethical issues where the employees have been fired on unethical grounds that has destroyed the conventional and cultural relationships (Hoffman, Frederick and Schwartz 2014). Though later on, the company reversed its verdict and decided to retain its employees, the existing relationship has suffered the consequences of mutual trust issues and also certain employees of the company has joined its competitors to as a sign of vengeance. In the second instance, the company stresses its employees to support the ‘mattress culture’ that has led to severe consequences such as commitment of suicides by the employees and it also further raises the question that whether an organization is correct in putting up such demands in front of its employees. On the other hand, Moral issues refer to the differences in the beliefs of two distinct bodies that have their own beliefs where both the parties hold on to their beliefs and consider it to be right on all grounds. However, the issue is different considering the case and raises a question that whether the doings of the company are reasonable or not.

In this context, the deeds of the company seem to be self-centred that is its only targets is to increase the benefits of the company by neglecting the necessities of its employees, leading to dreadful consequences. In light of the first instance, where the company has terminated approximately 5000 of its long-term employees, the business prospects of the company do not seem to be affected as much as the employees as the declaration of the only meant re-recruiting the workforce but on a contractual basis. In the case of the second scenario, the company demands from its employees to support ‘mattress culture’ where the company fails to anticipate the consequences of the impact that is brought upon the employees. The company seemed to be only interested in increasing its productivity compromising on the part of the employees. The Theory of Virtue Ethics states that both the bodies need to be involved in a specific issue to gain maximum benefit from each other by indulging in collaborate actions (Van Hooft 2014). According to the theory, a single body is not supposed to enjoy the benefit from the actions while the other body suffers. The theory also states that such self-centered actions are unethical and against business ethics (Russell 2013). In addition to that, the Utilitarianism Theory of Ethics states that the actions that are considered ethical should reduce the negative impact on the involved parties and increase the mutual benefit for both the parties.

Ethical issues in HE's actions

Hutong Enterprises has adapted ‘tiger’ culture to focus on assertive global competition through efficacy, creation, collaboration and self-reliance. The policies of the ‘tiger’ culture state that both the administrative level and the executive level are slated to extend their working hours and show their commitment to the organization by staying in touch 24/7. Though the ‘tiger’ culture adopted by the company does not necessarily lead to the exploitation of the employees but it also depends on the company practices and its corporate social responsibilities. On the other hand, it is also necessary for the company to accommodate the needs of the employees by utilizing the ‘tiger’ culture in business operations. The motive of every multinational organization is to compete in the global market through its products and services. This motive can be achieved through a dedicated and effective workforce of the employees where the employees put in their extra efforts in order to accomplish the company’s targets. In regard to corporate social responsibilities, ‘tiger’ culture is not intended for the exploitation of employees. The organizations, which are socially responsible, give privilege to the employees to put forward their opinions regarding the organization and inform about their expectation from the respective organization. The corporate social responsibility policies of an organization assist in collaborating the objectives of the employees and the organization and minimize employee exploitation (Moon and Knudsen 2018). Multinational organizations such as Hutong Enterprises target of expanding globally and neglect to pay heed to their sustainable objectives of development. CSR is one of the key management issues in organizations like Hutong Enterprises, which assists in fostering corporate refinement.

The CSR policies and efficient governing bodies maintain an equilibrium between the requirements of the company and its employees. Though the Hutong Enterprises comply with the CSR laws and regulations, the policies regarding employee commitment do not seem to be justified. The employees of the company seem to be exploited because of the lack of reasonable remunerations towards the extra effort contributed by the employees (Chung et al. 2015). According to business ethics, the culture should not be responsible for the exploitation of its resources where the company adheres to the CSR policies. The companies often overlook the needs of the employees, as they are only concerned about maximizing their profits while the CSR is concerned about the foreign business communities (Chomvilailuk and Butcher 2013). The organizations that are presently adapting to the strategic CSR policies includes activities that are intended to uphold the social conducts of the organizations that indirectly assist in obtaining a higher margin of profits (Kumar 2015). For organizations like the Hutong Enterprises, it is possible to accomplish its business objectives while paying required attention to the needs of its employees.

Firstly, it is necessary for the CEO of the Hutong Enterprises to ensure that the business operations of the company are persuaded on ethical guidelines. The point is that the CEO of the company necessarily assess the employees of the organization on ethical grounds to ensure that the activities are carried out in an appropriate way. In the light of the first challenge faced by the company where the termination of the long-term employees without any humane consideration proved to be fatal for both the parties. Thus, the CEO must follow some ethical principles before taking inappropriate actions that can safeguard the interests of both the organization and its employees.

Implementation of Tiger culture and impact on employees

In addition to that, The CEO of Hutong Enterprises must ensure that the upcoming actions undertaken by the organization must not intervene with the core values of the organization. Though the fact is quite evident that the company does not overlook the contribution and dedication of its workforce on the basis of its espoused core values, but it is quite noticeable that the company differs the same considering its actions. For instance, the ‘mattress culture’ adapted by the Hutong Enterprises intervenes with the company’s health and safety policies. According to the ‘mattress culture’, the employees of the organization are expected to work for stretched working hours where there have been instances of severe cases of commitment of suicides by the employees. The frequent cases of suicide had ignited the questioning about the culture of inordinate work. The Chinese media sources have registered an increasing number of deaths caused by implementing the ‘mattress culture’. Almost all the employees of the company are prone to overwork that has caused intense health issues among the employees and resulted in premature deaths of the employees. According to the governmental laws, employees are not supposed to work beyond 36 hours of overtime in a month but Hutong Enterprises exceeds the routine of most of the employees, which should not be the case. Thus, it is advisable for the CEO of the company to monitor the working hours of the employees starting from labourers to intellectuals that should not exceed the maximum time of overtime allotted as per the governmental laws and regulations. Last but not the least, it is recommended that the CEO of Hutong Enterprises must cater some countermeasures towards the current issues faced by the company and officially apologize to the terminated employees that may help in developing the public image of the company up to certain extent.

The responsibility of a union leader is to highlight the issues and complaints of the employees to the relevant authority so that the issues and complaints are addressed on priority. The union leader should also speak up on behalf of the employees for safeguarding the interests of the employees. The union leader must be aware of the organization’s practices and check that whether the company is complying with the core values and ethics or not. In regard to this, the union leader will be in a position to highlight the unethical activities of the company. It is the sole responsibility of the union leader to ensure that the company does not intend to exploit its employees and must be proactive in bringing up the issues and complaints of the employees on priority. The union leader should work as a communicator between the administrative level and the executive level to collaborate the employer with the employee. The union leader should handle the grievances of the employees of the organization that was earlier neglected while imposing the ‘mattress culture’ in the organization. The union leader should propose ideas for the betterment of the organizational culture where the employees will be informed in due time about the new organizational policies and also about the new amendments of the company. The activities of a union leader create an impact on the work ethics of employees in an organization as the union leader acts as the sole body concerning the issues raised by the employees. In the case of Hutong Enterprises, the recent issues that were highlighted are not just the after-results of the company’s contradictory actions. The issues that were faced by the employees such as exceeding work hours, lack of health and safety facilities were not effectively put forward to the higher authorities of the company due to the negligence of the union leader who is the governing bodies of the grievance eradication team. This has resulted in severe consequences that have not even washed off from the company’s image and the minds of the employees. The union leader associated with the Hutong Enterprises could have actively participated in the conflict raised during the declaration of the Labor Contract Law of 2005 that had stranded the long-term employees of the company (Cheng, Smyth and Guo 2015). Thus, it is highly advisable for the union leader to bring forth such issues where the employees are completely depended on the union representatives for addressing their grievances.

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