Open Science Repository Business Administration

doi: 10.7392/Research.70081929

Corporate Social Responsibility in the Maquiladora Industry in Mexico

Laura Cristina Piñón Howlet, Alma Lilia Sapién Aguilar, María del Carmen Gutiérrez Diez, Martha Patricia Espinoza

Faculty of Accounting and Administration of the Universidad Autónoma de Chihuahua, Mexico

Abstract

There is an increasing trend among private firms globally to adopt an approach of corporate social responsibility, which is manifested through activities and business decisions to improve the quality of life of employees, local communities and society in general. The objective of this study was to evaluate the policies of corporate social responsibility in the maquiladora industry in the city of Chihuahua, Mexico. The sample was 10 maquiladora firms in the automotive sector in order to quantify the quality of life in these companies. Data was collected through a questionnaire that was adapted on the basis of 25 indicators from the Mexican Center for Philanthropy. The results highlight that the evaluated companies comply with the policies of corporate social responsibility. It is recommended that companies increase their efforts and continue with a voluntary commitment to be socially responsible in all areas.

Keywords: social responsibility, policies, quality of life.

Introduction

Corporate social responsibility (CSR) has acquired primary importance in society and is already a highly developed theme among diverse organizations and firms. Modern businesses cannot be neutral or indifferent to the daily life of their societies; in fact, they are important promoters of economic well-being, social cohesion and technological advances, and represent, without doubt, an important link with other regions of the world. Behr (1987) pointed out that in the particular case of the USA, critics demanded corporate social responsibility after events like Watergate and the war in Vietnam.

It is clear that the role of the enterprise has evolved, given that it has ceased to be simply a producer of goods and services. It has transformed into what is today referred to as a corporate citizen (States News Service, 2010), that is, it is considered a subject of action, with rights and obligations beyond simple economic ones (Perdiguero and García, 2005). While businesses are economic entities, the pursuit of profits cannot be based on the absence of responsibility for one’s actions, the society cannot permit nor forgive this, much less defend it. Carneiro (2004) pointed out that both absolute responsibility and absolute equality are impossible given that social and organizational hierarchy cannot be eliminated at their roots, nor can absolute or relative inequality be eliminated, but it is feasible to control or mitigate their effects. 

It is also clear that CSR cannot be seem as a simple exercise in charity that is expressed through the traditional form of donations or sponsorships (Dougherty, 2009). Enterprises need to formulate values and share them with all involved, including the will to seek the common good and identify lines of coherent action around these values (Hernández, 2005). In this sense, a virtual circle should be developed among government, businesses and communities with the purpose of permeating socially responsible practices that raises productive competitiveness without falling into paternalism, but nevertheless achieving positive effects for the whole society (Osuna, 2004). Consequently, with the beginning of a new millennium, it is an obligation or duty of private companies to incorporate CSR policies that ensure a better quality of life for their employees (Tywoniak, 2005). Certo (2001) pointed out that a socially responsible organization is more effective and efficient for having met its social responsibilities while at the same time not wasting the resources of the organization in this process. It should be noted that employees should be considered by the firm as its most important asset for achieving organizational objectives. As well, it is clear that the workers at all levels are the most affected by the good or bad decisions of the firm.

Mexican legislation considers diverse matters to protect the interests of workers and in pursuit of a better quality of life. Nevertheless, there are still several aspects that the legislation does not cover, such as preparing workers for retiring. Considering the above, the objective of this study was to evaluate CSR policies in among maquiladora plants in the automobile industry in the city of Chihuahua, Chihuahua, Mexico. This information will be of importance for firms that potentially can implement CSR as a management tool that allows firms to achieve numerous benefits, among which are the loyalty and commitment of employees, with the consequent increase in productivity and efficiency. As a consequence, they can acquire a competitive advantage that allows them to acquire clients and client loyalty, improve relations with key actors like unions and public authorities and facilitate adaptation to future regulations. As well, the firm will have the recognition and acceptance of the community in which it operates, with a better reputation and image.

Materials and methods

The study was carried out in the city of Chihuahua, in the Chihuahua State, Mexico, from July to September 2011. In the first stage, the Mexican Association of Maquiladoras and Exporters (AMEAC) helped finding out the full range of maquiladoras in the automobile industry in the city of Chihuahua, México. Based on the provided information, 11 maquiladora plants in the automobile industry were identified. It was decided to survey all of the plants in this sector with the aim of making the research more reliable. 

The methodological instrument used was a questionnaire in two sections. The first section had three questions to obtain general information about the firm, while the second section consisted of 25 open-ended and closed-ended questions that were related to the quality of life in the firm. The questions offered the following five response options of a Likert scale type: always; almost always; sometimes; almost never; never. The questionnaire was applied with the head of the human resources department of the following maquiladoras; Alambrados y Circuitos Eléctricos Planta I, Auma, Buehler Motor, Bourns de México, BWI Group, DELPHI Automotive System, Ford Motor Company, Lear Electrical Systems, TRW Occupant Restraints de Chihuahua and Veyance Technologies.  

Before applying the questionnaire, each maquiladora was visited with the aim of requesting an interview with the head of the human resources department. The only firm that refused to receive the questionnaire was Buenaventura Autopartes S. A. de C.V, because it contravenes its policies to respond to surveys. Consequently, the total number of firms considered was ten. Once permission was obtained from the firm, the questionnaire was applied, in some cases in person and others via email. The results were graphed and interpreted according to the guidelines of Mexican Federal Labor Law and the principles established by the CEMEFI, which is the body charged with assessing CSR in Mexico.

Results and discussion

It was determined that all the evaluated firms always incorporate aspects of CSR in their mission, vision, values and/or strategic planning. For social responsibility to be present in organizations, it is necessary that it be considered as a fundamental part of the strategic planning of the organization. In this sense, when the mission, vision and values of the organization are articulated, social responsibility will be implicit and will be carried out in a planned manner, as another activity of the organization that is given attention and care to be carried out successfully. We determined that executives from the firms participate most actively in programs and activities related to social responsibility, while investors occupy the second place. What was consistent in all the evaluated firms is that all groups involved in the firms participate to a greater or lesser degree. These results concur with Hernández (2005), who stated that firms should formulate values shared with all of those involved, which include seeking the common good and the identification of lines of action consistent with these values.

The results showed that the type of contract that predominates in five of the firms is indefinite, while the other five firms use both indefinite and fixed-term contracts. It is clear that in recent years maquiladora firms have been making more use of outsourcing and fee-for-service contracts. The firms commonly use outsourcing for staff recruitment and selection at different levels, which often results in a lack of commitment on both parts. The worker does not feel him/herself committed to the firm when it does not feel obliged to give the worker anything more than what is strictly established by the law. 

In all the evaluated firms, employees work full-time, which according to Mexican law is eight hours per day. Nevertheless, this type of firm has a different schedule for a working day. Generally, these firms extend the working day, with the aim of offering a complete break in the weekend. Also, on some occasions the firms have reduced the workweek with prior agreement of the workers in the case the firm requires this to preserve jobs or in some other special circumstances.

The results showed that all of the firms employ single mothers and, to a lesser degree, persons with different capacities. Since maquiladora plants were established in Chihuahua State, they have been characterized by offering employment opportunities to women without distinguishing whether they are single mothers. The firms have negotiated agreements to open daycare facilities close to the workplaces without any additional cost, aiming that working mothers are tranquil knowing that their children are being well taken care of. One of the important points of the CSR, which refers to the quality of life within the firm, is non-discrimination toward vulnerable groups; that is, it considers that all persons have the right to work that allows them to obtain remuneration and live with dignity.  

Opportunities of hiring, remuneration and promotion are provided with equality, independence of gender, social condition and ethnic origin. The surveyed firms give due importance to the three aforementioned aspects, as well as following different procedures and policies established for this purpose. It is important to ensure equality of opportunities and of treatment, for all forms of discrimination, such as for race, color, sex, religion, political opinion and social origin, to be eliminated and to ensure that there is no favoritism in carrying out these activities; above all in giving promotions. It is clear that performance evaluation of employees that is applied ethically and responsibly can be a tool that to help avoiding conflicts and creating a favorable working climate within firms.

In evaluating if there are just and favorable conditions for all workers, with respect to salaries and layoffs, we found that all the firms follow the legal guidelines in this respect, as well as provisions established in Federal Labor Law for settlements upon dismissal or layoff before the Conciliation and Arbitration Board, to ensure that these processes are conducted in good faith and that the amounts in settlements and layoffs are correct.  In this manner, subsequent conflicts with the workers are also avoided.

In relation to salaries, the firms provide employees with incentives like bonuses food hampers, among others, in increase motivation and commitment toward the work and at the same time improve the life level of their employees. Dismissal of staff is considered as the last option in the case of budget cutbacks. Nevertheless, the results show that there is a marked difference of criteria in terms of considering layoffs as a last option and it can be noted that six of the firms put the permanence of employees within the firm as a second option.

In relation to the quality of working life, employment instability is a major preoccupation for workers, and the feeling that at any moment they could be laid-off is a cause of anxiety and stress. It is known that currently the maquiladoras in the automobile industry are experiencing economic problems that have led to massive layoffs of staff. Nevertheless, it is important that firms explore all the viable alternatives before affecting their workers with this type of decision.

In relation to having a safe working to avoid workplace illnesses, all the firms take measures to have a safe workplace. In this context, it was determined that all employees use the required safety equipment in accordance with their jobs, such as protective glasses, boots and gloves, among other equipment  It is worth noting that the firm have mixed safety and hygiene committees, which are in charge of ensuring that the it complies with legal requirements in relation to safety and hygiene. Also, diverse campaigns are implemented annually for the induction of new employees to stress the importance of safety and hygiene, as well as campaigns for the prevention of accidents and illnesses, vaccination campaigns and informative talks for the staff.  

In relation to preventing accidents, personnel are prepared through personal safety courses and training on dangerous activities, use of equipment, forklifts and the handling of dangerous substances. Equally, education, advice and information are provided about dangerous diseases. These programs are supported by campaigns coordinated by the Mexican Social Security Institute, while the responsibility for implementing these programs lies with the medical department of each firm. These programs are regularly carried out through informative talks on preventive health. For example, they offer talks on diseases such as diabetes, hypertension and obesity, among others, as well as vaccination campaigns to avoid contagious diseases. There is an evident concern of the firms about the health of their employees, which results in clear benefits such as decreased absenteeism and higher productivity and efficiency.

In relation to activities such as social, cultural and sports events in which workers and their families participate, the results showed that seven of the firms hold social and cultural activities in which employees and their families participate, while three of them sometimes do so. Examples of these activities are sports competitions of different types, such as soccer  basketball and volleyball,  among others. Other programmed activities are awarding scholarships to the children of employees, raffling gifts, Christmas and 10th of May celebrations and outings in the countryside with the aim of promoting good relations among employees, their families and everyone working with the firm, as well as familiarizing everyone involved with the firm. Some of the firms have special spaces for children’s parties or agreements with other firms that they allow employees access free of charge.

All the interviewed firms reject the use of physical and mental punishment and coercion and verbal abuse given that their principals, philosophies, values and ethical codes do not permit them. Carneiro (2004) defined responsibility as the obligation to justify one’s own actions with respect to criteria and rules, as well the concrete enforcement of the same and, in the case of negative judgments, the obligation to support the corresponding sanction. In applying sanctions to correct negative conduct by the worker, special care should be taken not to hurt the self-esteem and pride of the worker, which can permanently affect her/his performance in the firm.

It is important that personnel are recognized for generating ideas and decisions that favor the interests of the firm. According to our results, only four of the firms recognize personnel for generating ideas and decisions that favor the firm, while two sometimes do so and two almost always do so. Employee recognition is a useful tool to reinforce positive behaviors as well as increasing the commitment of employees to the firm. There are different ways to carry out this purposes, such as economic incentives like prizes and bonuses, as well as non-monetary incentives like thank-you cards, emails, physical manifestations like pats on the back and public recognition of outstanding achievements.

In relation to freedom of expression to expound opinions about work policies and programs, six of the firms always permit freedom of expression so that employees can expound their views, two firms sometimes do so and two never do so. It is clear that permitting employees to have freedom of expression results in improvements for the firm, given that employees can generate innovative ideas that subsequently result in growth and development of the firm. Some of the tools for hearing from staff and providing feedback are employee satisfaction surveys, suggestion boxes and anonymous complaint boxes. It is important to note that some firms provide economic rewards to employees who generate innovative ideas that are implemented for the good of the organization. 

With respect to freedom with responsibility, so that employees take decisions in relation to their work, the results showed that four of the firms that participated in the study sometimes provide freedom to their employees, while three do so always and three almost always. It is important that the firm is confident that the employee knows his/her job and, in a responsible manner, makes rationale decisions to resolve problems with respect to the work. The degree of risk should also be assessed and also the level of training that the employee has received, placing the integrity of the individual above the economic interests of the firm.

Regarding the inclusion of social responsibility in induction and training programs, the results showed that all the firms included social responsibility in induction and training programs. This is carried out through diverse actions and courses that are provided to all employees to raise awareness of taking care of the environment, promoting the values of the organization, as well as promoting ethical behavior in all activities of the firm. These actions show that, little by little, the organizations are taking the philosophy of CSR more seriously and that they are trying to implement it with new employees that are integrating into the organization and with those already working in the firm.

With respect to the installations and/or special equipment for persons with different capacities, five firms have special installations and/or equipment for persons with different capacities, two sometimes have them, two almost never, and one never. Organizations in general have been pressured by society and by legal requirements that have been established requiring special access ramps for persons in wheelchairs, exclusive parking areas, elevators, special bathrooms and other facilities. This infrastructure has the objective of offering the necessary facilities so that persons with distinct disabilities can get around safely and can develop themselves fully. 

With respect to concrete promoting teamwork and a sense of belonging, we found that seven of the interviewed firms promote a harmonious environment and a spirit of fellowship among their staff, two do so sometimes and one almost never. It is evident that it is advantageous for the firm that staff works as a team, given that there is more employee satisfaction for being able to socialize; it promotes tolerance and respect for the ideas of others and facilitates staff helping one another and in meeting the goals established by the firm. Maquiladoras have emphasized teamwork, promoting quality circles, working groups and other techniques used successfully in the USA.

With respect to programs to support a balance between personal life and work, three of the firms always have programs to support a balance between personal and working life, while two do so almost always, two do so sometimes, one almost never and two never. The firms use different strategies to achieve a balance between the personal and working lives of their employees.  An example of this is providing flexibility when employees need to attend to family matters in working hours, but also promoting a cooperative and agreeable environment and a spirit of teamwork and offering benefits that contribute to improving the quality of life. 

In relation to support programs for employees in the process of retiring, seven of the firms do not have this type of support program, while two always have such programs and one sometimes has them.  The firms are in agreement that work is a factor that influences self-esteem, in the level of satisfaction and the perception that a person has of his/her capacity and their desire to realize personal and professional goals.

It is necessary that firms have programs to support employees in the process of retiring. The program should be in place so the next round of employees to retire adjust in a better manner to their separation from work, providing them with training to help plan retirement and the way to use the savings accumulated over their working life. They should be invited to participate in associations or clubs that offer activities appropriate to their age and that provide them with a better quality of life in their old age.

Conclusions and recommendations

In accordance with the results obtained, it is clear that the firms are making important efforts to implement social responsibility measures. Nevertheless, much remains to be done. It is recommended that managers commit themselves to make CSR more established in all areas. They need to be conscious that the investment they make in this area is recovered with innumerable benefits for the organization and community in which they operate. It is expected that this research work will contribute to the awareness of the importance of implementing corporate responsibility measures to improve the quality of life of employees and advance this awareness to become part of organizational cultures. Today CSR represents an added value and a competitive advantage for firms, bringing conscious and committed action for ongoing improvement. Those firms that have not yet incorporated or strengthen their social responsibility actions will in the future face the demands of their society.

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Cite this paper

APA

Piñón-Howlet, L. C., Sapién-Aguilar, A. L., Gutiérrez-Diez, M. del C., & Espinoza, M. P. (2013). Corporate social responsibility in the maquiladora industry in Mexico. Open Science Repository Business Administration, Online(open-access), e70081929. doi:10.7392/Research.70081929

MLA

Piñón-Howlet, Laura Cristina et al. “Corporate Social Responsibility in the Maquiladora Industry in Mexico.” Open Science Repository Business Administration Online.open-access (2013): e70081929. Web. 18 Feb. 2013.

Chicago

Piñón-Howlet, Laura Cristina, Alma Lilia Sapién-Aguilar, María del Carmen Gutiérrez-Diez, and Martha Patricia Espinoza. “Corporate Social Responsibility in the Maquiladora Industry in Mexico.” Open Science Repository Business Administration Online, no. open-access (February 18, 2013): e70081929. http://www.open-science-repository.com/corporate-social-responsibility-in-the-maquiladora-industry-in-mexico.html.

Harvard

Piñón-Howlet, L.C. et al., 2013. Corporate social responsibility in the maquiladora industry in Mexico. Open Science Repository Business Administration, Online(open-access), p.e70081929. Available at: http://www.open-science-repository.com/corporate-social-responsibility-in-the-maquiladora-industry-in-mexico.html.

Science

1. L. C. Piñón-Howlet, A. L. Sapién-Aguilar, M. del C. Gutiérrez-Diez, M. P. Espinoza, Corporate social responsibility in the maquiladora industry in Mexico, Open Science Repository Business Administration Online, e70081929 (2013).

Nature

1. Piñón-Howlet, L. C., Sapién-Aguilar, A. L., Gutiérrez-Diez, M. del C. & Espinoza, M. P. Corporate social responsibility in the maquiladora industry in Mexico. Open Science Repository Business Administration Online, e70081929 (2013).

doi

Research registered in the DOI resolution system as: 10.7392/Research.70081929.

This work is licensed under a Creative Commons Attribution 3.0 Unported License.

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