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Journal of Business Ethics DOI 10.

1007/s10551-008-9805-1

Ó Springer 2008

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico

Eileen Daspro

ABSTRACT. The frequency of discriminatory language in job advertisements placed by U.S. multinational corporations operating in Mexico was compared with that of Mexican companies using content analysis. A sample of 300 ads placed by companies from each culture was analyzed and coded by two groups of coders to calculate the frequency of discriminatory language in the job ads with respect to age, gender, physical appearance and marital status. Results of a chi square analysis revealed that U.S. multinationals firms in Mexico utilize discriminatory language in job ads less frequently in the categories of age, gender and marital status. This result suggests that the legal and cultural framework of the country of origin of U.S. enterprises in Mexico may be influencing their actual recruitment practice in Mexico, and in turn, help them in setting a positive example of non-discrimination in recruitment among their Mexican counterparts. KEY WORDS: discrimination, multinational corporations

Problem background This paper examines the recruitment practices of subsidiaries of U.S. multinational corporations (MNCs) operating in Mexico and compares them with those of local Mexican firms. In this paper, a multinational corporation is defined as a company with substantive direct investment in foreign countries and active management of its foreign assets (Bartlett et al., 2003). More specifically, this paper compares the frequency of usage of discriminatory language in job advertisements placed in Mexico by U.S. MNCs and Mexican firms. For the purpose of this study, discriminatory language was defined as
Eileen Daspro holds her Doctorate in Business Administration and is an Assistant Professor of International Business at ITESM in Guadalajara, Mexico where she teaches courses in international trade and global strategy.

the presence of any category of exclusionary language in a job advertisement that was illegal in the U.S., including: two categories identified by Kohl and Stephens (1989): (1) age restrictions and (2) sex preference. To these categories, the author added two additional categories of discriminatory language, (3) physical appearance or attribute of any type that is not deemed a genuine occupational qualification for performing the job and (4) marital status of the job candidate. Socio-economic status had also been considered as a relevant discriminatory variable, but was ultimately left out of the analysis because the sample size obtained was insufficient to produce any statistically significant solutions. The aim of this paper is to examine U.S. MNCs’ commitment to a basic principle of social responsibility: non-discrimination in employment is upheld in a legal and cultural context, which differs significantly from that in the U.S. This was accomplished by analyzing the content of job advertisements placed by U.S. MNCs in Mexico and Mexican domestic companies during a 2-month period. For each advertisement placed, the presence or absence of discriminatory language was noted for the following categories: age, gender, appearance and marital status. The frequencies in each of these categories of discrimination were then compared between the two groups (U.S. multinationals operating in Mexico and Mexican companies) to determine if, in fact, there was a significant difference in the frequency of use of discriminatory language between U.S. MNCs in Mexico and Mexican firms. Importance of study Today, more than 63,000 MNCs operate around the world employing 90 million people and providing more than 25% of the gross world product (Gabel,

Eileen Daspro 2003). Given their large number and power, these corporate entities have a pervasive impact on political, social and economic processes around the world. In recent years, considerable attention has been given to whether the positive impacts of MNCs do in fact outweigh their negative impacts. Among the positive impacts outlined by Gabel (2003) are the corporations’ payment of tax revenue to governments, provision of employment opportunities, harnessing of local innovation and increasing the real income and economic well-being of the host country. Conversely, MNCs have been harshly criticized for creating exploitative workplace conditions, failing to provide adequate consumer and environmental protections, interfering in local political affairs and contributing to worsening income disparities in developing countries (Gabel, 2003). As engagement in negative practices may tarnish their corporate image and brand value, it is crucial that multinational corporations continuously reexamine their practices and evaluate their overall impact on countries where they operate. Some of the specific accusations leveled against multinationals are discussed below. MNCs have been accused of a variety of exploitative practices. With regards to the environment, MNCs have been accused of polluting the environment and destroying natural habitats though the improper disposal of waste and the release of an unchecked amount of toxic emissions (Gabel, 2003). Indeed, the low quality of air and water on the U.S.– Mexican border, where many multinational maquiladoras have set up their assembly operations, would appear to be an example of this (Graham, 2002, p. 136). The term maquiladoras refers to a foreign-owned factory in Mexico at which imported parts are assembled by lower-paid workers into products for export (Merriam-Webster Online Dictionary, 2008). Critics have argued that the lax environmental regulations and enforcements mechanisms overseas attract MNCs who are in effect ‘‘free’’ to pollute outside their home borders (Gabel, 2003). In addition, MNCs have been harshly criticized for their adoption of lax labor standards overseas. For example, MNCs have been portrayed by critics as globetrotting sweatshop operators, which relocate to countries where wages are low and weak local labor legislation effectively allows them to promulgate harsh, exploitative working conditions (Stopford, 1999). Donaldson (2001) outlined a few of the most commonly cited concerns, including: working conditions and safety, the use of child labor and differential pay scales for local and expatriate staff. In fact, when operating overseas in a context where the cultural context plays an important role in influencing labor law and practice, multinational corporations may have no other option than to adopt the employment practices of local firms. For example, in patriarchal host countries such as Japan and Saudi Arabia, the adoption of U.S.-style equal opportunity programs aimed at female employees might be completely unworkable for cultural and religious reasons (Mayer, 1993). In other instances, MNCS may willingly choose to adopt more lax labor standards simply because it is possible to do so overseas, regardless of whether such practices represent a significant violation of the ethical principals underlying the cultural and legal principles of the multinational’s home country. For example, much of the fault of the tragic Union Carbide explosion in Bhopal, India, in 1984 can be attributed to the plant operating at safety standards, which were considerably lower than those in its home country, i.e. the U.S. (Donaldson, 2001). This very scenario provides the context for this paper. Given the proximity of Mexico to the United States and the advent of the North American Free Trade Agreement (NAFTA), a large number of U.S. multinationals are operating in Mexico and are considerably responsible for the explosive growth in foreign direct investment (FDI) in the country. For example, in 1993, the total stock of FDI in Mexico amounted to over 40.6 million, while in 2005, it was estimated to total more than 209.6 million (UNCTAD, 2006). Moreover, the U.S. Department of State (2007) has estimated that more than 2600 U.S. companies operate in Mexico and together they accounted for more than 66% of total FDI in the country in 2005. Clearly, FDI from the U.S. plays an important role in the Mexican economy and will likely continue to do so in the future. Discrimination in employment is only one facet of the much broader problem of global inequality that currently plagues the developing world. The United Nations (2005) has asserted that the world today is far from equal; gaps exist not only in income and assets, but also in quality and accessibility of

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico education, health care and employment. Moreover, of all the dimensions of inequality, inability to secure employment is thought to have the gravest of implications, since it exacerbates poverty and social tensions, and may increase the incidence of both societal and domestic violence (United Nations, 2005). Latin America in particular has a long, historical tradition of inequality. According to the Economic Commission of Latin America and the Caribbean (ECLAC), between 1950 and 1970 countries in the region had Gini coefficients of 0.45–0.55, among the worst indicators of inequality in the world (United Nations, 2005). A combination of external shocks in the late 1970s, including a drop in the price of agricultural commodity exports, a rise in the price of oil and a significant increase in interest rates on foreign debt resulted in a lingering debt crisis throughout the 1980s worsening an already grave economic and social situation. In the late 1990s, the ECLAC reported that the wealthiest 10% of the region received 30% of total income, while the poorest 40% received between 9 and 15% of the regional income (United Nations, 2005). Two issues are painfully clear. First, inequality persists in the region and remains an important social and economic obstacle for combating poverty and greater social well-being. Second, securing gainful employment for all members of the Latin American society represents an important challenge for the region in meeting the goal of economic growth with equality. This paper, with its focus on the use of discriminatory recruitment practices by U.S. multinationals, will examine whether foreign firms are playing a positive role in diminishing this problem, or in contrast, whether they are playing a negative role in exacerbating it. from the perspective of workforce diversity (Egan and Bendick, 2003; Kostova, 1999), where the theoretical underpinnings suggest that while attitudes towards equality in employment may differ around the world, strong ethical and financial motives exist for engaging in global diversity. Finally, the issue is highly relevant to the expansive literature on crosscultural management (Ngo et al., 1998; Rosenzweig and Nohria, 1994), where theoretical advances in the long standing dilemma of global standardization versus localization provide helpful insights on whether multinational firms choose to implement recruitment practices that are standard in their home country or whether they adopt those of the local host country environment. Milton Friedman (2004) vehemently rejected the concept of corporate social responsibility, arguing that in a free, capitalist society, corporate executives have a single purpose: ‘‘to make as much money as possible (for the shareholders) while conforming to the basic rules of society’’ (p. 33). More recently, the literature on business ethics has come to view corporations not only from a legal perspective, but also as social institutions that have a responsibility to a broad array of stakeholders including suppliers, customers, employees, the community and of course stockholders (Freeman, 2004). According to this latter view, all relevant stakeholders have the right to make claims on corporate managers, just as stockholders have traditionally done. Freeman’s (2004) theory of stakeholder management becomes considerably more complex in the international business environment. The sheer size and scope of multinational business operations as well as the diversity of their operating environments results in no single, enforceable system to guide business practices along ethical, social or environmental dimensions (UNCTAD, 1999). Despite a lack of definition of social responsibility on the global level, corporate social responsibility has been asserted as a necessary, strategic element of overall global firm strategy that should not be overlooked (Davis et al., 2004; Galbreath, 2006; UNCTAD, 1999). This principle is reflected by a host of international legal agreements that deal directly or indirectly with the issue of equality in employment practices: the Universal Declaration of Human Rights (1948), the OECD Guidelines of Multinational Enterprises (2000 Revised) and the International Labor

Literature review A review of the literature on this topic revealed varied opinions. The issue of whether U.S. multinationals employ discriminatory recruitment practices overseas can be examined from three perspectives. First, the issue is discussed in the business ethics literature, where theoretical approaches are examined from a social responsibility perspective (Freeman, 2004; Friedman, 2004). Second, the issue can be examined

Eileen Daspro Organization’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Responsibility. However, the actual practice of social responsibility on a global scale appears to lag behind the principles. For example, Kaptein and Wemp (2002) found that only 52.5% of the world’s largest multinationals did in fact have a business code, of which, 45% mentioned fairness and 31% diversity as important stakeholder principles. Wentling and Palma-Rivas (2000) and Egan and Bendick (2003) suggested that the implementation of global diversity practices has not progressed significantly, despite a rise in the awareness of its strategic importance. A perusal of the literature on workforce diversity (DeGeorge, 1993; Donaldson, 1996; Egan and Bendick, 2003) also suggests that a strong case be made for non-discrimination in employment practices on the international level. In reality, labor practices differ a great deal across the globe. For example, in the U.S., an average annual salary based on the federal annual minimum wage for the year 2005 was $10,712 dollars per year (U.S. Department of Labor, 2007) in comparison with the equivalent of $1,200 dollars in Mexico City (Rios, 2006) and the equivalent of $996 in Shenzhen, the special economic zone in China (China Daily, 2005). In reality, multinationals operating in a global business environment are often confronted with the quandary of how to act with respect to differing overseas labor practices. According to Donaldson (1996), one possibility is that MNCs act as the locals do, as if no culture’s ethics are any better or worse than another’s. This has been termed cultural or ethical relativism (Donaldson, 1996). Alternately, MNCs may practice ethical imperialism by imposing their home country’s labor principles on the host country business environment (Donaldson, 1996). According to Donaldson (1996), the former is morally blind and the latter too ethnocentric. Instead, it has been argued that all MNCs adopt a moral minimum overseas, which includes ethical principles such as fairness, honesty, respect for human rights and the provision of equal opportunity (DeGeorge, 1993; Donaldson, 1996). In fact, the focus of this research is to examine precisely this: whether or not MNCs uphold the principle of provision of equal opportunity across differing global business environments. The literature on workforce diversity also reveals that multinationals may possess a strong financial motive for engaging in global workforce diversity practices. Brewster (2002) found that the strategic management of international human resources may improve a company’s bottom line. Moreover, Kostova (1999) has argued that the ability of MNCs to transfer organizational practices to subsidiaries, such as workforce diversity, represents a key source of competitive advantage. Findings by Egan and Bendick (2003) maintained that diversity management is ‘‘here to stay’’ and that it should be viewed from a best organizational practice perspective since it promotes attainment of the following desirable business objectives: Attracting and retaining talent, understanding customers’ diverse needs, improving the company’s image and being an employer of choice in the eyes of employees. Undeniably, one of the most important and certainly related debates in the cross-cultural management area is whether multinationals operating overseas should enact standard, global policies or whether they should be adapted to the unique cultural, legal and social environments in which they operate. The findings in the relevant literature (Rosenzweig and Nohria, 1994; Taylor et al., 1996) seem to suggest two kinds of factors that may guide multinationals’ decisions on whether to go global or go local. These are national level factors and policy level factors. National level factors include the country of origin of the multinational and the legal and cultural environment in which it operates. In contrast, policy level factors deal with, as the name suggests, the nature of the actual human resource policy and the degree to which it impacts local employees and is regulated by local laws. Both have been shown to be influential in the implementation of equal opportunity practices by multinationals (Rosenzweig and Nohria, 1994; Taylor et al., 1996). One important national level factor has been the country of origin of the multinational. For example, a statistically significant relation has been found between country of origin and the chosen human resource management strategies in studies undertaken by Ngo et al. (1998) in Hong Kong and Yuen and Kee (1993) in Singapore. Moreover, Taylor et al. (1996) have asserted that the legal environment of the local site of operations also plays a key role in the multinational corporation’s decision to either implement a globally standardized practice or not.

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico On the policy level, human resource policies in general have been shown to reflect local adaptation more than global standardization, given the strong influence of local regulation and norms in functional areas (Rosenzweig and Nohria, 1994). For example, Rosenzweig and Nohria (1994) found that human resource practices, which were clearly regulated by local legal norms, were precisely those that were most likely to be adapted in the local environment. Furthermore, in the absence of a strict regulatory environment governing non-discrimination in employment practices, findings by Lawler (1996) and Leong et al. (2004) revealed that multinational corporations did in fact engage in discriminatory recruitment practices in their respective studies in Thailand and Singapore. Within the realm of human resource management, certain practices have been shown to be particularly prone to local adaptation: those that involve local employees to a large degree or those where the local institutional environment traditionally has determined the nature of the practices in the human resource area (Rosenzweig and Nohria, 1994). Some of the practices that fall into the institutional category include: benefits, time off, compensation and gender compensation of the workforce (Myloni et al. 2004; Rosenzweig and Nohria, 1994). to their standard back in the U.S. or if they adapt their policies to reflect the local Mexican legal and cultural environment. The study will use a content analysis approach of actual job advertisements for different positions placed by the same 20 U.S. multinational firms in classified advertisements in both the U.S. and Mexico to reveal the multinationals’ actual recruitment practices overseas. Assumably, public scrutiny may be less of a force for U.S. MNCs overseas than in their country of origin. Specifically, this study aims to shed light on the contentious issue of whether U.S. multinational behaviour is more positive or negative as relates to discrimination, through close examination of human resource advertisements. Research questions
H0:

U.S. multinational operating in the U.S. will have a lower frequency of discriminatory language in the categories of age, gender, appearance and marital status as Mexican companies.

Purpose of the study In light of some of these observations, one has to wonder just how much discrimination may occur in multinational environments in different parts of the world. To date, no research has been conducted to examine the phenomenon of the use of discriminatory language in job ads placed by multinationals outside of Asia. In addition, no study has been found to have examined this phenomenon in a legal environment, which at least on paper, appears to prohibit discrimination outright in practice. Thus, this study will examine the actual recruitment practices of U.S. MNCs in Mexico, where the legal statutes regarding discrimination are clear but rarely enforced, and where the local culture tends to support the perpetuation of discriminatory recruitment practices. The primary aim of this research is to determine whether the U.S. MNCs operating in Mexico employ recruitment practices more similar

Given the influence of the U.S. multinationals’ own legal and cultural framework in their country of origin, U.S. multinationals will be less likely to discriminate in job ads than their Mexican counterparts. For example, the legal environment of a company’s country of origin has been demonstrated empirically to have an impact on whether a multinational company chooses to use discriminatory language in job advertisements or not. For example, Lawler (1996) studied the use of discriminatory job advertisements along gender lines in Thailand. He found that U.S. multinationals operating in Thailand were less likely to use discriminatory job advertisements than Japanese multinationals and local Thai firms. At the time of the study, no laws existed in Thailand mandating equal opportunity in employment based on gender (Lawler, 1996, p. 157). A similar legal environment as that in Thailand existed in Japan at the time of study. While some anti-discriminatory legislation existed, it was deemed to have been weak and generally not enforced (Cook, 1987). In contrast, in the U.S., anti-discrimination legislation in employment has been regulated for more than four decades and is vigorously enforced (Lawler, 1996). Thus, it appears that the legal

Eileen Daspro environment of a company’s country of origin does influence a company’s propensity to discriminate or not in job advertisements. In addition, empirical evidence suggests that the legal environment in which a company operates may also influence a company’s propensity to discriminate or not in job advertisements. Leong et al. (2004) found that in the lax regulatory environment of Singapore, where no law governing equal employment opportunity exists, MNCs from the U.S., U.K. and Japan did place discriminatory job advertisements. However, the extent to which they did so was a function of the home country’s legal environment with regards to employment discrimination legislation and enforcement. In the case under study, Mexico possesses a regulatory framework that clearly prohibits discrimination in job recruitment, suggesting that the influence of the country of origin’s legal framework may prove to be influential in their recruitment decisions. Indeed, the legal environments of the U.S. and Mexico are dramatically different in practice. This may explain why blatant discrimination is less evident in the U.S. than in Mexico. The U.S. has four major federal laws that regulate equal opportunity in employment: Title VII of the Civil Rights act of 1964, the Equal Pay Act of 1963, the age Discrimination Act of 1967 and the Rehabilitation act of 1973 (Leong et al., 2004). In addition, compliance with the Equal Employment Opportunity Act of 1972 is accomplished through a special commission, which investigates claims and litigates against alleged cases of discrimination on the basis of race, color, religion, sex or national origin in employment. In the U.S, the labor laws are extensive and vigorously enforced. For example, legislation embodied in Title VII of the Civil Rights Act of 1964 guarantees the rights of employees to be free from discrimination on the basis of race, color, religion, sex, national origin, age or disability. In practice, these laws are generally viewed to be vigorously enforced. Victims of employment discrimination in the United States can file charges with the U.S. Equal Opportunity Employment Opportunity Commission (EEOC), and if the charge is found to be true, a monetary settlement may be determined in favor of the plaintiff. In fiscal 2005 alone, the EEOC received the following number of charges: 16,585 (age), 14,893 (disability), 4,449 (pregnancy), 26,740 (race), 2,340 (religious) and 23,094 (sex). While these figures do not provide evidence in any way of the elimination of the problem of workplace discrimination, they do testify to the existence of a legal and cultural framework in the U.S. that discourages discrimination in practice. Mexican law also has a legislative history of prohibiting discriminatory employment practices, although evidence suggests that it has not been vigorously enforced in reality. For example, both Article 4 of the Mexican Constitution of 1917 and Article 3 and Article 164 of the Mexican Federal Labor of 1931 code prohibit discrimination in employment. For example, Article 4 of the Constitution reads ‘‘No person can be prevented from engaging in the profession, industrial or commercial pursuit, or occupation of his choice, provided it is lawful.’’ In addition, Mexican Labor Law clearly states in Article 3 ‘‘Work is a right and a social obligation.’’ ‘‘Distinctions shall not be made between workers based on race, sex, age, religious belief, political doctrine or social condition’’. Moreover, Article 164 of the Federal Labor Law reads ‘‘Women shall enjoy the same rights and obligations as men.’’ In fact, in 2003, these very principles of equality in employment, which had been codified in Mexican law almost a century ago, were made more explicit when the Mexican Congress passed ‘‘The Federal Law to Prevent and Eliminate Discrimination’’. According to Article 1, the law’s sole purpose is to ‘‘prevent and eliminate all forms of discrimination’’, which in Article 4 of the same law are broadly defined to include ‘‘distinction, exclusion or restriction based on ethic origin, sex, age, disability, social condition, health condition, pregnancy, language, religion, opinion, sexual preference, marital status or any other.’’ Nevertheless, recent findings from a wellrespected public opinion pollster Consulta Mitofsky in Mexico found that 91.2% of Mexican citizens polled in the survey believe discrimination still exists on a broad range of variables including: ethnicity, sex, and socio-economic class in all aspects of economic life (2004). Thus, an apparent gap exists between inclusive labor laws on the one hand and exclusionary practices on the other. In addition, the existing literature suggests that the culture of the company’s country of origin many also play a role in influencing its decision whether or not to discriminate in the recruitment

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico process. For example, if an MNC’s country of origin is characterized by stronger enforcement of nondiscrimination in employment practices and the presence of a cultural context that supports the principles of equality of opportunity in employment in the U.S. (Leong et al., 2004; Segrest et al., 2003; Zimmerman, 1992) it may be less likely to occur and is less likely to be tolerated by the general population. In contrast with the U.S., the cultural environment of Mexico is generally characterized by values that might promulgate discriminatory employment practices rather than diminishing them. Hofstede’s (1980) work on cultural values produced data from over forty countries and 116,000 employees at IBM from 1967 to 1971. Initially, he proposed four main cultural dimensions masculinity/femininity, power distance, uncertainty avoidance and individualism/ collectivism. These four cultural variables distinguish cultures from one another, and in the instance of the U.S. and Mexico, reveal important differences that might shed light upon the two cultures’ propensity to discriminate. For example, cultures that are high in masculinity place a lot of importance on material gain, assertiveness and clearly distinguished sex roles. In this regard, both the U.S. and Mexico have masculine cultures, although Mexico ranked higher on this dimension (Segrest et al., 2003). The authors have noted that Mexico’s higher masculinity score (69 for Mexico versus 62 for U.S.) may explain the incidence of exaggerated machismo, defined as ‘‘an attitude of male dominance and superiority’’ (Segrest et al., 2003). These machista attitudes are reflected in Mexican women working in mostly ‘‘feminine’’ jobs, such as education, cleaning, nursing and administrative supportive, which are lower paying and less prestigious than those positions traditionally dominated by males (Muller and Rowell, 1997). In sum, higher scores on Hofstede’s masculinity score may reflect a tendency to discriminate on the basis of gender. Hofstede’s (1980) second cultural variable, power distance, deals with how cultures manage inequalities among people. High power distance cultures accept large inequalities in power and wealth as a normal state of affairs, while lower power distance cultures attempt to minimize social inequities. Segrest et al. (2003) have also asserted that high power distance may interact with high masculinity to exacerbate attitudes of masculinity, thereby making discriminatory practices worse. On the power distance index, Mexico received a high score of 81, and the United States a relatively low score of 40. These scores suggest that Mexicans may be more tolerant of social inequalities than Americans, an attitude that again may lead to the use of discriminatory employment recruitment practices. Hofstede’s (1980) third major cultural variable was uncertainty avoidance. Uncertainty avoidance describes the extent to which certain cultures avoid ambiguous situations. Segrest et al. (2003) have suggested that this variable may perpetuate discriminatory attitudes since risk-averse countries could be slower to implement changes aimed at reducing or implementing discrimination, since they imply change and dealing with uncertainty. In this regard, the U.S. is considered a low uncertainty avoidance culture and Mexico, a country characterized by high uncertainty avoidance (Segrest et al., 2003). These scores may suggest that in risk-averse countries such as Mexico, employers may feel resistance for adopting new policies or programs that in some way represent a change from long-held practices of discrimination. Hofstede’s (1980) fourth cultural variable is individualism-collectivism. Hofstede asserted that collectivist societies, such as Mexico, were characterized more by family support, group harmony and protection of members’ prevalent values. In contrast, individualistic societies, such as the U.S., were more concerned with individual freedoms and their individual needs. Segrest et al. (2003) have pointed out that collectivist Mexicans may hold on more strongly to historically discriminatory attitudes since fitting into, learning and maintaining historically appropriate gender roles is emphasized as part of maintaining group conformity. Thus, while Mexican employers may continue to discriminate to avoid non-group conformity when hiring fellow Mexicans in their country; U.S. employers might not hold the same fear, either in the U.S. or in Mexico. In sum, the legal and cultural environment of U.S. MNCs would appear to discourage the use of discriminatory practices by firms, while those of the Mexican firms might appear to tolerate it more. Thus, this research aims to show whether U.S. MNCs uphold their home country standard of nondiscrimination in employment in an overseas labor

Eileen Daspro environment where the legal and cultural framework does not yet support them. A chi square test will be conducted to test for a statistically significant difference in frequencies for four categories of discrimination analyzed in the ads: age, gender, physical appearance and marital status. Sample selection For the proposed research, the sample was derived from job advertisements placed on the largest online job advertisement websites in Mexico: www.occ. com.mx. Thus, the unit of analysis for this study is the job advertisement. The proposed sample is to be derived from 15 U.S. companies and 15 Mexican ones, which use these sites for recruitment purposes in Mexico. Companies selected for the sample must have met the following criteria: they must have used one of the above websites for recruitment in the last month a minimum of 20 times and their country of origin, company name and industry type must be readily identifiable from the ad.

Methods Content analysis, a qualitative research method, was used to analyze the content and more specifically the language employed in job advertisements found on a Mexican job website www.occ.com.mx. Holsti (1969) defined content analysis as ‘‘any technique for making inferences by objectively and systematically identifying specific characteristics of messages’’ (p. 14). In this proposed study, content analysis will be used to code, quantify and make inferences about the inclusion of potentially discriminatory language used in advertisements by U.S. MNCs in Mexico, as well as by Mexican companies in Mexico. Authors such as Leong (2004) have noted that content analysis of job advertisements is a particularly useful method for assessing discrimination because it measures the actual practices of firms when recruiting new employees and not just what they may state to be true. The principle aim of this research design is to assess independence between a single, independent categorical variable, country of origin of the firm, and a dependent categorical variable, the number of instances in which a company uses discriminatory language in a job advertisement. For the purpose of this study, discriminatory language was defined as the presence of any categories of exclusionary language in the advertisement, which are illegal in the U.S., including two categories identified by Kohl and Stephens (1989): (1) age restrictions and (2) gender preference (male/female). To these categories, the author will add two additional categories of discriminatory language, (3) physical appearance or attribute of any type, which is not deemed a genuine occupational qualification for performing the job and (4) marital status of the job candidate. As mentioned previously, the discriminatory variable of socio-economic status was not included in the analysis because of insufficient sample size.

Instrumentation For the first sample, job advertisements were collected for the samples under study during a 2-month period from January to February 2007. In total, 700 ads were collected from the 15 U.S. companies operating in Mexico and 956 ads from Mexican firms. A random sample of ads was chosen using a random table of numbers to select a total of 20 ads per company for analysis, for a total sample of 300 ads for U.S. companies in Mexico and 300 ads for Mexicans companies in Mexico. Tallies were calculated for the incidence of discriminatory language in the four categories mentioned previously: age, gender, appearance and marital status. For example, General Motors published the ad below for an Administrative Manager on Jan. 18th, 2008 in www.occ.com.mx. Administrative Manager: General Motors Mexico City Responsible for the area of accounting, credit, human resources, financial statements and internal and external audits. Sex: Male Age: 35–50 Educational Background: Accounting Marital Status: Indistinct According to the established criteria, this ad would have been assigned a score of ‘‘2’’ by the raters. One point would be given for the appearance of an age preference in the ad (35–50 years) and a

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico gender preference (male). No point would be awarded for appearance since no mention of a required physical attribute unrelated to the performance of the job was included in the ad. Similarly, no point would be given for marital status since the ad mentions that there is no preference in this category. To reduce the potential for rater bias, scoring was performed by two groups of bilingual (Spanish– English) raters, each with three members. One group was of Mexican national origin, while the other was from the United States. In both instances, raters received 2 h of training about coding the ads, prior to the actual coding sessions. A random sample of 20% of the ads in the actual sample was used to calculate Cohen’s Kappa, a widely used measure of inter-rate reliability. Inter-rater reliability refers to the extent to which two or more coders analyze the same content and reach the same conclusion. In this study, no significant difference was found between the two groups of raters results. in Mexican ads. Moreover, only 1% of the U.S. companies discriminated based on marital status in comparison to 8.3% of the Mexican ads. Four different chi square analyses yielded the following results: the use of discriminatory language by companies from the United States and Mexico was different for three categories of discrimination age (x2 = 14.07, p = 0.698); gender (x2 = 0.426, p = 0.514), marital status (x2 = 0.275, p = 0.600). In these three instances, there was no evidence to reject the null hypothesis. Thus, there appears to be a statistically significant difference in frequency of use of discriminatory by U.S. and Mexican firms in Mexico. In the case of physical appearance (x2 = 0.275, p = 0.05) the significance value was the same as the p value of 0.05; thus, there is at least some evidence to suggest that we may reject the null hypothesis, albeit mildly, in this category of discrimination.

Limitations One of the limitations of this study’s methodology is the use of non-probability methods in constructing its samples. In doing so, the findings will not be generalizable to the whole population, whether they be U.S. or Mexican companies. Another limitation relates to the selection of companies to be included in the study. A preliminary overview of these websites suggests that they contain a large number of advertisements from recruiting firms that do not tend to specify the name or industry type of their client. Thus, by necessity, ads of this type must be excluded from the analysis. In addition, not all firms nowadays use the internet to search for qualified job applicants, thus limiting the potential scope of this study’s influence. Similarly, many companies that do recruit virtually do not do so for blue collar or lower-ranking administrative positions, where individual job candidates are less likely to have access to the internet or whereby candidates are less accustomed to using it in their professions.

Results Rater reliability The data were first analyzed to measure inter-rater reliability. The mean reliability scores (Cohen’s Kappa) for the four different categories of discrimination were: 0.874 (age), 0.917 (gender), 0.790 (appearance) and 0.905 (marital status), respectively. All reliability values are deemed acceptable near or above the 80% level established by Kassarjian (1977) and Nunally (1978).

Hypothesis tests Hypothesis 0 stated that U.S. multinationals would use discriminatory language in job advertisements less than Mexican companies. The resulting frequencies support this hypothesis. The results indicate that 18.7% of U.S. ads discriminated based on age in comparison to 70% of Mexican ads. Similarly, U.S. ads discriminated along gender lines in 10.7% of the cases, in comparison to 30% of the Mexican ads. With respect to appearance, U.S. ads discriminated 5.7% of the time in comparison to 17.7% of the time

Discussion and conclusion The purpose of this study was to compare the use of discriminatory language in job advertisements placed by U.S. MNCs and Mexican companies operating in

Eileen Daspro Mexico. The results obtained from the content analysis of the job advertisements suggest that they are statistically significant differences between the incidence of discriminatory language in job ads placed by the countries of differing national origin. As expected, U.S. multinationals were found to employ discriminatory language less than Mexican companies. These results suggest that the influence of the legal and cultural context of the company’s country of origin may be reflected in its choice of whether or not to discriminate when playing an employment ad overseas. This influence may prove greater than the legal and cultural environment in which the MNC operates. Moreover, this finding suggests that the multinational companies included in this study may in fact be playing somewhat of a positive role in the social and economic development of Mexico by practicing non-discriminatory recruitment practices in an environment, where such recruitment practices have yet to become commonplace. The significance of this study is threefold. First, it yields data from actual ethical practices of U.S. multinationals overseas, rather than what U.S. MNCs purport to practice. For example, previous research by Wentling and Palma-Rivas (2000) and Kaptein (2004) examined the existence of ethical codes in multinationals and their stated commitment to a variety of stakeholder issues, including diversity initiatives. Second, the comparative nature of this study may yield important insights into the field of cross cultural management practices. By directly comparing the advertisements of U.S. multinationals in Mexico with Mexican firms, important conclusions can be made about the role of the legal and cultural environment of the home country of origin in influencing recruitment practice. This important focus was suggested by Leong et al. (2004). This perspective could prove to be very illustrative since it may reveal the tendency of U.S. multinationals to either uphold or lessen their ethical standards overseas, where U.S. labor standards do not apply and the public eye is far from view. Third, no research to date has analyzed the actual recruitment practices of U.S. MNCs in a developing country legal environment that clearly prohibits discrimination in employment. Previous studies by Lawler (1996) in Thailand and Leong, Tan and Shen-Yi-Loh in Singapore (2004) took place in countries where no legislation existed that explicitly outlawed discriminatory recruitment practices. Thus, the Mexican case is an interesting one since the occurrence of discriminatory language in job advertisements placed by U.S. MNCs would signify a violation of Mexican labor law. While this does not appear to be the case in the majority of ads, to truly uphold the ethical standard on non-discrimination in employment, discriminatory language should be entirely absent from job advertisements.

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Department of Business and Marketing, ITESM, Campus Guadalajara, Mexico E-mail: edaspro@itesm.mx