INTRODUCTION

Before discussing the development of codes of conduct, a brief survey of those in the
international community is helpful in understanding the issue. As the globalization of the
economy progressed, MNCs were economically motivated to transfer their production
bases to developing countries, such as Latin American countries and South East Asian
countries, for low wage labor and less employee protection. Simultaneously, the
international community increased criticism of MNC behavior in host countries while
various governmental and non-governmental organizations drafted guidelines to control
the MNCs’ business conduct. Generally, codes of conduct in the international community
have been developed by two parties: international organizations such as the United
Nations or the Organization for Economic Cooperation and Development (OECD), and
private parties such as MNCs or non-governmental organizations

INTERNATIONAL CODES REVIEW

Following are the different codes of conduct proposed by the international organizations
during the globalization era:

UN Code

Among the many efforts by international organizations to create norms that regulate
MNC business conduct, the United Nations’ 1974 Code of Conduct for Multination
Corporations
(“UN Code”) was the first. The UN Code had been under development since 1974, when
the Economic and Social Council established a commission on MNC’s. The commission
was directed to study the role of MNC’s in the international economy and to draft a code
of conduct for them, which later became the UN Code. The UN Code consists of seventy-
one articles. The wording is somewhat generic and no concrete burden is imposed on
MNC’s. For example, Article 14 regarding human rights simply states that Multinational
corporations shall respect human rights and fundamental freedoms in the countries in
which they operate.” Despite its weakness, the UN Code met strong opposition from
industrialized countries, especially from the United States, and was not officially adopted.

While talking about Suzuki and Peugeot one must have to know a brief description of
these companies i.e. what these companies are about. So below mentioned is the brief
description of Suzuki and Peugeot respectively. The companies follows these basic six
principles of business.

principles are:

1. Antidiscrimination
2. Fair Employment
3. Equal wages
4. Job training
5. Promotion of non-white management
6. Improvement of the quality of life outside the workplace.

SUZUKI (INTERNATIONAL)

Suzuki was fonded in 1909 and is a japan based company, primarily dealing with the
manufacturing of automobiles. Its headquarter is based in japan and is the main head for
every concern. As the era of globalization arrives Suzuki became to expand cross
nationally which leads to adopt the international managment style as for the sustainability
of the company, thus they adopted those atyles which are necessary and being very
successfully ruling in the economical world. The management style adopted by Suzuki
will be mentioned later in the report.
PEUGEOT

Peugeot has been manufacturing cars since 1889. The Peugeot Frères company was
officially founded in 1810 when the Peugeot family bought a cereal mill at Sous
Cratet and set about capitalizing on the Industrial Revolution by converting it into a
steel factory.
This factory began producing sheet steel and various tools but it was handsaws
which inspired the famous emblem of the company. From the 1850s the lion emblem
was stamped onto Peugeot made products to symbolize the strength and flexibility of
the steel.

Peugeot is a company founded in Paris area of France. It basically focuses the elite desire
of the elite class consumer. it is a privately held company and a subsidiary of PSA
Peugeot Citroen. It also operates across the nation but is limited to only the European
nations, it a French company. The management style adopted by Peugeot will be
discussed in the later part of the report.
MANAGEMENT STYLE OF JAPANESE CORPORATION (SUZUKI)

As mentioned earlier that Suzuki is a Japanese corporation and it has its own
management practices that it follows across the nation. These practices are recognized by
the US code which are the universally accepted laws that every mnc have to adopt while
becoming globalized, but in the case of Japanese corporation a set of management style
have been devised by JAMA (Japanese automobile association) and that they follow
across the nation boundries in accordance with the US code.

As far as my study is concern I pointed out that it is the world largest industry due to its
gdp output of $4.883 Trillion, and is the world’s largest automobile manufacturer and
exporter.

Home of six out of top 10 largest vehicle manufacturers in the world

Toyota
Mitsubishi
Honda
Nissan
Suzuki
Mazda

They are mainly Known for their:

Quality
Durability
Fuel efficiency
Competing prices compared to their competitors

The characteristics of the Japanese management style

A group consensus in decision making
A Career job security
A pay and promotion system heavily dependent upon seniority
In-house unions enlisting all company employees

The Western admiration for the Japanese management style

Resulting from the higher labour productivity growth rate of Japan
9.3% from 1960 to 1980
The perceived devotion of Japanese employees to their companies and work
The competitiveness of the Japanese corporate system : a managerial autonomy
The relationship with the shareholders

The Japanese Management Style

Leadership and decision-making
The Japanese suzuki corporations are rigidly organized and extremely hierarchical,
their organizational structure are extremely hierarchical.
There is an independent power centre in each department of the organization, every
employee in the department has the right to put forward his or her point of view
In Decision making there is a real group process, every group in the organization give
there view about the task then all the views are mutually analyzed and the decision is
progressed.
Careful attention being given to the preliminary stages of management by group
consensus

The Japanese Management Style

The advantages to the Japanese form of decision-making
It has some elements of democracy, giving equal rites to every person
A greater participation of decision-making in the company
The inclusion of many individuals in the decision-making process
An easier and more efficient implementation
The perceived loyalty of Japanese employees to their companies and work
The competitiveness of the Japanese corporate system : a managerial autonomy
The relationship with the shareholders

The flaws of the Japanese process

• Too many people and sections get involved

• Too many meetings are held
• The meetings are very long
• The delay of business decision-making
• The influence of the relationships between the participants in the final decision

The Lifetime Employment : ‘shushinkoyo’

• Employees are recruited directly from school rather than from an open job
market
• Employees are expected to stay with the company all their working life
• They can expect lifelong job security
• The importance of the recruitment
• A real family-type social organization
• A major motivation for employees to stay long in one company
• A system under pression

SUZUKI (PAKISTAN)

Pak Suzuki Motor Company Limited is a subsidiary of Suzuki Motor Corporation (SMC)
Japan. Suzuki is the 12th largest automobile manufacturer in the world, employs over
45,000 people in 23 countries

Pak Suzuki Motor Company Limited is the largest automotive company in Pakistan
employing over 1,500 direct/indirect staff across Pakistan. Our most valued asset is our
employees; we provide a challenging and conducive environment with a chance of
tremendous growth opportunities, as we believe in continuous learning and development
of our employees & their continuous effort and hard working made us market leader, we
are committed to continue the same.

Statement of Ethics and Business Practices

Here are the code of ethics and Business Practice of Pak Suzuki Motors Company,
1. Pak Suzuki insists on integrity and honesty of its employees in doing business.
Any unfair or corrupt practices to solicit business is fundamentally inconsistent with
business codes of company
2. Pak Suzuki believes in compliance to regulatory obligation
3. Pak Suzuki believes in free and fair business practices and open competitive
markets. Developing any association with competitors to distort the pricing and supply of
products is contradictory to company’s business code of conduct.
4. Pak Suzuki believes in transparency in business transaction and they are to bere
corded accurately and fairly in books of accounts in accordance with standard procedure.
5. Pak Suzuki expects its employees to act in company’s best interest while holding
confidential information. Company expects its employees neither to solicit internal
information from other nor to disclose company’s data or any other materialinformation
to any un- authorized person/body.
6. Pak Suzuki believes in individual’s respects and growth. Its employment policies
do
not discriminate on basis of race, religion, gender or any other factor.
.Pak Suzuki does not believe in political affiliation

Corporate Strategy

Pak Suzuki is built on the idea of a responsible corporate citizenship thereby managing
environmental, safety & occupational health matters as an integral part of our business. In
fulfilling this responsibility Pak Suzuki adheres to the following principles:
1. We are committed to provide top quality products to the satisfaction and requirement
of our customers.
2. We conduct our operations in compliance with applicable environmental,
occupational health & safety laws and regulations.
3. We recognize the interrelationship between energy and the environment, and we
promote the efficient use of energy throughout our system

4. We ensure safe disposal of waste generated from our facility

5. We minimize the discharge of waste materials into the environment by utilizing
responsible pollution control practices.
6. We will continuously seek opportunities to improve our adherence to these principles

COMPARISON BETWEEN HOME AND HOST:

While in the comparison of home and host, I come to point out some of the
difference between the management as well as business practices. Well in the home
country Suzuki corporation has given equal rights to their employees while making
decision, group of each department put their views then all the views are interpret and
then a decision is make while in Pakistan no such rights are issued to their employees,
only the top management are responsible for decision making. There is a lifetime
employment opportunity in the home country and the employees are directly recruited
from the school life and these type of employees are fully committed well in host country
there is no lifetime employment and they hire the employees on the contract bases. In
both the nations the pay and promotion system heavily dependent upon seniority.

PEUGEOT

1.1 Supervisory board membership,

role and responsibilities

The Peugeot S.A. Supervisory Board has twelve members and

three non-voting advisors. No member of the Board is a salaried
employee of a Group company.

The Supervisory Board appoints members of the Managing

Board and can remove them from office. According to the law, it
is responsible for overseeing the Managing Board’s management
of the business. The Company’s bylaws also attribute to the
Supervisory Board sole authority to approve corporate actions,
bond issues, the signature or termination of agreements with
other companies operating in the same industry that will have
a decisive impact on the Group’s future development, and any
major transaction that substantially alters the business or financial
structure of the Company or the Group. In addition, the Supervisory
Board ensures that the strategy implemented by the Managing
Board is consistent with the Group’s long-term vision, as defined
by the Supervisory Board.

responsibilities of the Supervisory Board

supervising, monitoring, and advising the Managing Board on: (i) the
Company's performance, (ii) the Company's strategy and risks inherent to its
business activities, (iii) the structure and management of the internal risk
management and control systems, and (iv) compliance with legislation and
regulations;

EMPLOYMENT SOCIAL RESPOSIBILITY

resources policies seek to align business performance and

personal growth by fostering a sense of community built on
the strong shared values of open dialogue, solidarity and
respect for people in all their diversity.

The Group is committed to growth founded on socially-

responsible principles and practices, consistently applied in
every host country and business around the world.
In recent years, this commitment has been the source of
innovative employee relations practices in all of the host
countries. 2005 was especially rich in this regard, notably
in the area of corporate social responsibility. The year’s

achievements reflected the sustained implementation of

policies shaped by four major principles:

- ongoing, revitalized social dialogue in every country, involving

employees and employee representatives in their company’s

progress,

- active hiring policies to attract the finest talent and skills,

- a total compensation policy linked to corporate earnings,

- flexible organizations adapted to the company’s challenges

and a commitment to continuously improving working

conditions.