A visiting American executive finds that a foreign subsidiary in a poor nation has hired a 12-year-old girl to work on a factory floor, in violation of the company’s prohibition on child labor. He tells the local manager to replace the child and tell her to go back to school. The local manager tells the American executive that the child is an orphan with no other means of support, and she will probably become a street child if she is denied work. What should the American executive do?

Answer 1: The American executive should immediately check if the law of the poor nation where the subsidiary is located allows child labor to work in industries. If the poor nation’s law does allow child labor then he must advise the local manager to ensure safe working conditions for the child labor. If the law of the nation doesn’t allow child labor then he must report the matter to labor department of the respective nation to stop child labor to work on factory floor. Also the Executive should bring the matter to the notice of the top management of the organization so that a policy decision can be arrived to prevent child labor being used in any of its subsidiaries.

On the other hand Child labor is quite normal in most of the countries. Low level of education and extreme poverty really makes tough for such children to survive and they find no other mean but to work for living. However, such practices which are commonly known as ‘sweatshops’ are not taken well by developed countries and considered as unethical. In most of cases shareholders and customers also go against such organizations. Although local manager is right in his intention to provide that girl livelihood, the way is wrong. We define philosophy as right way to do right thing. So the thing is right but way is wrong.

In my point of view if a were an American executive, I will set up a Corporate Social Responsibility fund and finance education for her or girls like her. I would also imply my organization to set up a residential school where such orphan children can learn for better future. Such steps are indication of good corporate governance and proof that management is not after only making money but also taking care of ethics. This builds up trust among employees, customers and shareholders which is beneficial for the company in the long term.

Answer 2: The first thing the American executive should do is find out if it is legal for children to work in the foreign subsidiary. If it is legal for 12 year olds to work then the American should respect the work ethic of the child and approve of the work as long as it is safe for a 12 year old to do. If it is illegal the American executive should immediately remove the child and speak with top management as soon as possible and file a report. If executives know about these things going on and do not do anything they can get in serious trouble. This way, at least as soon as the executives found out, they can show they reported it and had no prior knowledge.