A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals

We are aware that HCNs are a heterogeneous group. It is important to emphasize, however, that our analysis focuses on the sub-group of ‘professionally equivalent’ HCNs in comparison to that of expatriates.

More general criticism of national culturalism beyond the ethics-based critique (see, e.g. Peterson et al. 2010) needs to be acknowledged, as it provides additional support to our non-perceptual view of justice in international work arrangements. See, e.g. McSweeney (2002) for a general critique of Hofstede’s framework, and also other critical views of the (mainstream) notion of national culture, arriving from international management (e.g. Nelson and Gopalan 2003) or IHRM (Bloom et al. 2003; Gerhart and Fang 2005).

The idea of ‘overlapping consensus’ (Rawls 1993, 2001) refers to the need for peaceful living and mutual respect between different individuals and societies that believe in different philosophical, religious or cultural frameworks as cornerstones of their ways to understand the world and social organization. It is then necessary that individuals and institutions reach a sufficient (cross-cultural and cross-ideological) consensus around the basic principles of social organization.

Regarding classical philosophical approaches to justice, we note that Aristotelian ethics has indeed influenced important elements of Rawlsian thought (see, e.g. DeLue 1980; Mann 2009; Xianzhong 2007). Hence, whilst inspired by classical philosophy, Rawls crucially focuses on contemporary (social and political) institutions and geo-political dynamics, thus offering especially insightful tools for analyzing current and timely justice concerns.

We wish to clarify that, obviously, we do not plainly identify Rawlsian thought with extended corporate citizenship (cf. Matten and Crane 2005), which has been deemed by critical views as too ‘libertarian’ or ‘neo liberal’ in a way that might be at odds with more ‘liberal egalitarian’ Rawlsian thought (e.g. Mäkinen and Räsänen 2011). Pragmatically, Rawls helps us to complement a descriptive use of extended corporate citizenship by inspiring us to introduce some more clearly ‘liberal egalitarian’ normative elements, adapting aspects of Rawlsian views to the IHRM domain, that are useful for tackling actual justice problems derived from unacceptable inequalities—in our article in terms of unfair MNCs’ work arrangements.

We are aware that other contributions (notably Phillips and Margolis 1999) have interpreted the issue of voluntarity as a matter of pre-defined ‘kind’—as opposed to our view as a matter of post-assessed ‘degree’ (Moriarty 2005)—implying a straightforward rejection of philosophy-informed views of business ethics, thus denying the applicability of Rawlsian principles to the corporate domain. However, Phillips and Margolis (1999) argument is intrinsically inconsistent for at least two main reasons. First, their rejection of the applicability of Rawlsian principles to corporations derives, paradoxically, from their axiomatic belief in the deeply philosophical idea that corporations are not part of the basic structure of society. Second, Phillips and Margolis (1999) also believed that business ethics, given its more pragmatic aim, should be independent from philosophy, but their interpretation of the concept of basic structure of society is highly theoretical—as opposed to our certainly more pragmatic arguments for including MNCs in the basic structure of society, in line with insightful literature (notably Hartman 2001) defending the role of philosophy in business ethics. Moreover, the denial of the role of philosophy for business ethics on the grounds of a too ‘theoretical’ nature of the former is also questioned in light of relevant, highly pragmatic philosophical approaches to justice—notably the ‘capabilities approach’ (see, e.g. Nussbaum 2000; Sen 2009).

For instance, it seems reasonable to assume that employment gender inequality tends to decrease as MNCs increase their presence in more traditionally gender inegalitarian and less liberal societies. This example of ‘spill-over effect’ would support the applicability of the principle of fair equality of opportunity to the internal structure of MNCs’ employment relations. Similarly, in poor countries, although the employees at the bottom of the pay scale tend to be better off if they are working for an MNC than for a local company, the pay differential between senior managers and shop-floor employees may well be greater too in MNCs (since senior managers’ pay scales in MNCs tend to be more globally influenced). This example of higher inequalities that also benefit the least advantaged would support the applicability of the difference principle to the internal structure of MNCs’ employment relations.

May we clarify that we do not feel obliged to either accept or reject Rawlsian ideas in full. We feel legitimized to pick the ones we consider most relevant to our purposes, as long as we provide careful argumentation—as we have tried to do. For example, Nobel Prize winner (1998, Economics) Sen (2009) draws heavily on Rawls to propose his ‘capabilities approach’. Still, there are elements of this approach that depart substantially from Rawlsian proposals—notably the consideration of actual human capabilities (what people can actually do and choose to do, therefore the ends that human beings can achieve), as opposed to the Rawlsian concept of primary goods (the means through which people may or may not ultimately develop capabilities). Such an ‘amendment’ to Rawlsian theory is by no means less substantial than our own reinterpretation of the concept of the basic structure of society, yet the ‘capabilities approach’ has gained widespread popularity and is highly compatible with Rawlsian thought (Sen himself dedicated his latest book to the memory of his friend Rawls).

Crucially, the libertarian stance on justice as a defence of a minimal state (Nozick 1974) does not fit an active concern for fighting economic inequalities (precisely a key motivation of our research), contrasting with other priorities of the ‘minimal state’ (e.g. national defence or the enforcement of contracts); on the other hand, the utilitarian focus on justice as the maximization of happiness of the parties involved (Mill 1879) implies a substantial perceptual focus (i.e. the very notion of ‘happiness’ which must be subjectively self-assessed), again not fitting our research purposes and focus. Accordingly, the difference principle is a key pillar of our own framework (i.e. it will evolve into our principle of fair meritocracy) as a tool to assess inequalities’ fairness as a distributive concern in itself, so we deem the Rawlsian view of justice essential to our approach—far more appropriate than Nozick’s or Mill’s. Furthermore, the balanced nature of Rawls’s liberalism (especially through the difference principle) can be observed by comparing it to radical positions at both ends of the (liberal) political spectrum. Rawls is more permissive with inequalities than left-wing positions (which disapprove extreme inequalities), but at the same time he is less permissive with them than right-wing stances (which prioritize the maximization of combined wealth and efficiency).

Formal equality of opportunity just ‘leaves the window open’ (e.g. for exercising individual rights), risking falling into not exceptional situations of ‘selective incivility’ or ‘covert discrimination’ (cf. Cortina 2008). Conversely, fair equality of opportunity usually embraces active steps towards increasing opportunities for traditionally disadvantaged groups (e.g. positive discrimination policies).

Our view of universalism does not equate to uniformism. We focus on values that are often defended as universal (e.g. freedom of conscience and religion in the broader social domain, or freedom to choose one’s own career path in the occupational arena; values recognized by several United Nations’ and other agreements, and by the constitutions of virtually all democratic regimes), the application of which leads indeed to more diversity. Such diversity and hence higher freedom would—paradoxically but logically—naturally result from observing some conditions for (or limits to) free choice: (i) the different outcomes are the result of free, informed and un-coerced choice by the individual, (ii) they do not preclude the free choice of other people based on the same rights and (iii) they do not jeopardize the use of other universal rights by the same individual (e.g. the freedom to pursue the career of your choice does not allow you to get yourself into a ‘career in slavery’). These universal conditions are influenced by relevant streams of (Western) liberal philosophy and ethics, but also by notable non-Western philosophical and ethical traditions that are also consistent with our view (see, e.g. Nussbaum 2000; Sen 2009, for insightful accounts of this issue). Crucially, they also neatly fit the UDHR (United Nations 1948) and other international agreements aimed at promoting global ethical standards.