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The aim of this essay is to focus on whether legal and ethical compliance is necessary for competitive advantage.

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Major Assignment By Ognjen Zec Executive Summary The aim of this essay is to focus on whether legal and ethical compliance is necessary for competitive advantage. It will also discuss the factors affecting the HR functions of Selection and recruitment and how they interrelate with legal and ethical compliance and competitive advantage. Patrick Stevedores will be used as the main example, however other examples have been used where necessary. The research has been based on both written and oral sources found readily available in the public. The report found that Legal and ethical compliance is necessary for competitive advantage. Furthermore it found that Patrick Stevedores did not increase its competitive advantage due to its poor implementation of change in its HR factions. " Legal and Ethical compliance in managing HR functions is necessary for competitive advantage." The most sustainable competitive advantage between companies today is the quality of its people. Most organizations are in search of the able people to work for them and it is often a never-ending search. Human Resource Management today focuses on the enhancing better performance in the work force and sustaining peak performance. It is the quality of its people that is the competitive advantage of an organization (McBride et al. 2002, 290 - 304). However, as clear and easy as this sounds, it is the way in which firms handle their legal and ethical compliance in managing HR functions that determines their level of competitive advantage. ...read more.


The purpose of this restructuring of the workforce was the craving for greater efficiency, higher stock turnover and lower labour costs. Basically Patrick Stevedores tried to improve its competitive advantage over its competitors and maximise its profits. There are other political issues involved in this case but they are beyond the scope of this essay. Additional readings will be listed in the bibliography section. The two HR functions discussed in this essay are recruitment and selection. They are basically the main HR issues in the IR dispute at Patrick Stevedores. As mentioned earlier the basic problem arose when Patrick sacked its unionistic workforce in order to replace them with non-unionised labour. As we know, an organization's recruitment policy provides the framework for recruiting action and reflects the organization's recruitment objectives. It details the overriding principles to be followed by management in general and by the HR manager in particular (Stone, 2002). Patrick decided with government backing to change its recruitment objectives in order to make its workforce more flexible. Patrick mainly wanted individual bargaining agreements with its workers rather than the one for all unionistic approach that was in place at the time. Patrick however was not the first stevedore company to implement such an approach of trying to destabilize union labour. Other organizations have tried the same approach only to realise than in order to achieve competitive advantage; a more ethical approach was needed. For example, in the early 1990s, a shipyard at Hebburn, on the Tyne, was taken over by Shields Ship repairers. ...read more.


However since employees belonging to a union are not discriminated against, this approach would be both legally and ethically compliant. This approach would also have limited industrial action as opposed to the drastic step of dismissing all of Patrick's employees. This in turn would have lead to no industrial action and overall improvement in efficiency since that was the goal of the new recruitment and selection procedures. The competitive advantage of Patrick's would have been drastically increased and no negative publicity created. Basically it is safe to say that Patrick's new polices of recruitment and selection were seriously flawed and that the new method of managing these HR functions did not contribute to competitive advantage. In conclusion a much more subtle approach to changing the HR functions of selection and recruitment could have been used. It is important to remember that ethical compliance is not the same as legal compliance. Legal compliance is the law and it must be abided by. Ethical compliance however is much harder to measure and even harder to control. Even defining what is ethical and what is not can be difficult since people have different opinions of right and wrong. What Patricks did in its selection and recruitment policies is widely considered unethical. It was also found to be illegal ((ACN 003 621 645) & Others [1998] 378 FCA (21st April 1998)) and clearly in breach of the workplace agreement act. Hence the goal of achieving competitive advantage was not achieved by Patricks due to its poor implementation of new strategies. It has been found that both legal and ethical compliance is necessary for competitive advantage. ...read more.

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