National Geographic, 160 Million of the Indian

¶ … National Geographic, 160 million of the Indian population is considered untouchables[footnoteRef:1]. The Untouchables are, according to the caste system in India, individuals that are deemed to be impure and, as a consequence, individuals against whom human rights violations are committed on a regular basis. These human rights abuses range from discrimination, to relegation to the lowest possible jobs and to outright violence. [1: Mayell, Hillary. 2003. India's "Untouchables" Face Violence, Discrimination. National Geographic News. On the Internet at http://news.nationalgeographic.com/news/2003/06/0602_030602_untouchables.html. Last retrieved on March 14, 2013]

IBM hiring untouchables in India presents a complicated situation for the company, in many ways. The main dimensions that will need to be examined are the ethical and social responsibility component, as opposed to the cultural differences component. It is easier to start with the latter in order to better understand the potential dilemma in which IBM is placed when recruiting untouchables in India.

The cultural problem is evident here. IBM is not only hiring untouchables in India, it is developing its business in India, by opening facilities in a large number of Indian cities that include Bangalore, Delhi and Mumbai. It is not only outsourcing there, but it has actually created a subsidiary company, IBM India Private Limited that coordinates activities in India that, as mentioned, go beyond simple outsourcing and include product and process development.

Its presence in India is also part of a larger process that aims towards a long-term development of its Indian activities. This can be exemplified through the number of employees that the Indian subsidiary has added from 2003 to 2007. There are 74,000 IBM employees now in India[footnoteRef:2], compared to 9,000 in 2003, a significant increase. Apparently, there are more IBM employees now in India than in the United States[footnoteRef:3]. [2: Associated Press. December 2007. About 1 in 5 IBM Employees Now in India. On the Internet at http://www.accessnorthga.com/detail.php?n=205230. Last retrieved on March 14, 2013] [3: Sujit, John. August 2012. If Cognizant is Indian, so are IBM and Accenture. The Times of India. On the Internet at http://blogs.timesofindia.indiatimes.com/Tech-a-tete/entry/if-cognizant-is-indian-so-are-ibm-and-accenture. Last retrieved on March 14, 2013]

These are all important elements because they show both a trend and a strategy: IBM is not planning to use India as a short-term outlet to decrease its costs. Its strategy is to develop the Indian facilities and, gradually, move a significant part of its production capacities to India. Its focus on lowering the costs has a long-term outreach, with notable investment in this sense.

When a company like IBM focuses so much of its external strategy on developing a new market such as the Indian one, for outsourcing and production purposes, it needs to take into consideration the local customs and traditions, including some of the cultural elements that may be entirely different from those in the United States. Unfortunately, in India, one of these cultural traditions is the population's attitude towards the untouchables, lower cast of people whose rights are randomly and consistently violated.

There are 160 million of them, something like 12% of India's population, so this is not something that can be ignored or minimized. The idea that IBM is hiring untouchables is likely to be known in the Indian society, likely with debates about whether this is correct or not. Such debates can influence the perception of the population about IBM. IBM's image in India could be affected in the sense that the company could be perceived as one of the economic American giants who comes to another country and chooses to ignore the local traditions, having no deference to perceptions and beliefs among people.

If one was to speak from the management theory books, IBM would find itself in a case of going against local culture and having to draw on the negative consequences of such an action. Particularly when this is in the human resource field, it becomes more and more relevant for the company to take into consideration all elements that can negatively impact its relationship with the receiving country. Again, the fact that people in India strongly believe in the caste system and have classified individuals as untouchables is something that has to do with the local traditions.

However, this is where the ethical and social responsibility issues intervene. There are at least two perspectives to be analyzed. First, IBM is a global company and one of the things it needs to adhere is the notion of universal human rights. Universal human rights include the freedom of speech, of assembly, but also the right to gender and social equality. Social equality would be interpreted here in the sense of equal opportunities and equal access to these opportunities.

Second, IBM is representing the United States, as one of the most powerful American companies. For an American company, there should be a human rights standard exactly because the company comes from a country that makes human rights one of the basic principles and elements of its national and foreign policy. As an American company, there is a strict set of human rights that IBM needs to respect and these are basically the same as the one mentioned in the previous paragraph.

Another issue that derives from IBM's stance as a global company is that the way it handles its human resource policy is something that is likely monitored by partners and stakeholders worldwide. If IBM exercises something like discrimination in its recruitment and selection approaches by not hiring untouchables in India just because it pays attention to local customs and traditions, all partners around the globe will likely see this in a negative perception. The result could translate into a negative brand image worldwide, with direct impact on market share, sales and revenues.