Discussion

All interviewees are aware of the code’s existence, which reveals that the COC is embedded in the company. Other measures are the acceptance of the code and the integration of the code within the company’s system and processes. According to the interview data, the code is widely accepted. Certainly, some people are against it.

Nevertheless, everyone has to deal with the consequences for non-compliance, which is the dismissal of an internal person or the termination of the collaboration of external partners. Although no separate COC audit exists, the content is included in other audits of the company. A challenge is to check whether sub-suppliers comply with the code, since the suppliers are responsible for the code’s communication to their partners.

However, in case of a violation, PALFINGER ends the business relationship with that supplier. After the audit, all suppliers get ranked based on the percentage points they had earned in the audit. The supplier with the highest percentage receives the first call. The purchasing and sales department are mostly confronted with potential code violations, since they are mainly in contact with external companies and partners.

All interviewees had been overall satisfied with the current COC and in favor of the video.

More trainings are required, and it is suggested to integrate the COC firmly by e. g. using e-learning. Similar to US standards, all employees should watch the video and do a test afterwards. The importance is to continuously display the code to increase the level of awareness.

The first sub-research question was defined as follows:

What does the (initial) COC implementation process, i. e. transferring a COC from headquarters to subsidiaries abroad, look like?

The COC was developed at headquarters, and the project team consisted of various departments. This is in line with a recent study by Coughlan (2005), who indicates that COCs are typically established across various departments.

The content of the code varies according to the language, since it uses positive and negative formulations as well as direct and mitigating expressions. This is in line with results obtained by Nijhof et al. (2003). In contrast to what their study suggests, PALFINGER’s motivation for the code’s implementation was not to improve CSR.

Certainly, the main idea had come from the sustainability department, but motivation drivers had been additional questions during the audit and media scandals of well-known companies. A comparison of the four categories of the UNGC with PALFINGER’s COC reveals similar categories. PALFINGER uses human rights, environmental standards, business ethics, and information/communication whereas the UNGC lists human rights, labor, environment, and anti-corruption. PALFINGER had not used any international convention as the basis of their COC. The company had based the COC on the four fields managed by the sustainability department.

As outlined in Chapter 3.2., this thesis deals with the implementation process outlined as follows:

▪ Commitment of top management: formulating a shared vision for employees and stakeholders

This point is partly in line with the implementation process of PALFINGER. The main idea had come from the sustainability department and the code was developed within the project team. However, top management had taken an active part in communicating the COC. At the beginning of the video, the former CEO addresses all employees and stakeholders to comply with the code.

▪ Training for employees to ensure knowledge of responsibilities

Training is provided by the company and is held for suppliers and purchasers. It had not been identified if everyone received special training on the COC.

▪ Analysis of a company’s structure: assign department(s) to take accountability over the COC or create a new one

This had firstly been done by the sustainability department which leads and coordinates the whole process. Secondly, all local managers are responsible to implement the code abroad.

▪ Integration of COC into evaluation system (job description, annual ratios, purchase procedures, legal framework, user manuals etc.)

The COC is already part of the onboarding process in some countries such as the USA. The onboarding process is not standardized and thus, differs country-wise.

Furthermore, the COC is integrated in almost all supplier contracts. No other evaluation systems had been mentioned.

▪ Development of monitoring and auditing processes (internal and external audits) Some parts of the COC are integrated into internal as well as external audit processes. Nevertheless, an individual audit only about COC topics does not exist yet. However, this might be developed and introduced in the future.

▪ Introduction of open communication channels to receive feedback of stakeholders The integrity line had been published simultaneously with the COC. It can be accessed via the website and is open to all stakeholders. Everyone can send an anonymous email in case unethical behavior occurs.

▪ Integration of COC management within the whole corporation

The COC is managed centrally from headquarters. The company’s vision and mission had not been further discussed.

▪ Optional: Integration of COC management on behalf of suppliers

This optional point in literature is mandatory at PALFINGER. Every supplier has to commit to the COC, otherwise it cannot be a supplier of the company. Companies that are able to integrate the COC into their supplier system, are leading in that task, as discussed in Chapter 3.2.

Cultural differences had been acknowledged by the project team and turned out to be a challenge. Expatriates and local managers had implemented the COC abroad and had approved the cultural difference as a challenge in daily business behavior. Especially in China, common business practices were considered corrupt based on the COC.

Therefore, the expatriate held monthly discussions to implement the code and to ensure that the stakeholders understand the code.

The results show that the implementation in the US and Canada had been smoothly done partly because of the few differences in culture. It had been found that US-Americans favor rules and strict guidelines, which is alignment with the arguments presented in Chapter 4.1. Furthermore, many large US companies already have a COC, which facilitates the code-implementation in that country.

The implementation in Brazil had revealed challenges because of the higher level of corruption as well as the lower educational level compared to Austria. The political situation and the general degree of development of a country challenge the implementation of ethical standards. This had also be shown during the code introduction in Russia. Compared to Canada, it had been more challenging to adapt local standards to the code’s standards. Canada had already fulfilled most of the points or revealed higher standards whereas in Russia more steps had to be taken to address issues of corruption and environmental topics.

The next sub-question reads as follows:

What are the reasons for local adaptations to a COC and which areas are mainly concerned?

This research question contrasts the most with existing literature. Several authors argue that COCs have to be adapted to the subsidiary’s culture (Chapter 4). The findings of the empirical research reveal different results. PALFINGER’s COC is seen and treated as a global document. Therefore, local adaptations that would violate the content are not tolerated. All subsidiaries have to adapt to the values established at headquarters.

Nevertheless, feedback of local managers had been discussed during the code development. However, adaptations in terms of the content are impossible.

Slight adaptations had been made in terms of the language and legislation of a country.

Starting with language, it is important that all employees and partners can read and understand the content. The COC is translated into more than ten languages. The majority of interviewed local managers speak the local language. However, language is considered a challenge. The company works with interpreters in countries where the manager does not speak the local language. This is the case in China, for instance. The main challenge is to ensure that the locals understand the content. Especially Chinese is an indirect language while the expatriates’ native language is German. Those two languages differ in a cultural and language-historical setting. In German, the message is essential whereas in Chinese the environment of a message is the key. This clearly presents an issue and challenges daily business. Although the use of interpreters is overall positive, it needs trust, technical and cultural know-how of the interpreter to fulfill a satisfying job.

Apart from adaptations of language, the legal environment has to be considered.

Certainly, the company does not have a choice, since local legal regulations are based on local law; thus, the company has to comply with it. Overall, the COC provides stricter guidelines than many local regulations. In case the national law contradicts with the COC, the latter becomes invalid, which is in line with the discussion in Chapter 4.2.3. This is the case e. g. in Russia, where every document has to be translated into Russian and aligned to Russian law in case of contradictions. Notably, code contradictions to national law are rare for two reasons: Firstly, the code is partly written in general terms to cover many scenarios, e. g. the topic environmental standards, but it is also narrowed down to specific topics, which is the case with human rights. With regard to environmental standards, it has been stated that these have to be fulfilled depending on the respective market segment. Obviously, those standards differ country-wise, as the waste management in Canada is way stricter than e. g. in Austria, and in Russia the standards are lower than in Austria. Therefore, the aim is to fulfill country standards and work on initiatives to increase environmental protection above national standards. This is checked during audits, and short as well as long term goals are formulated. It has to be considered that developing countries prioritize the topics human rights and corruption. The company does not tolerate any violence of these topics. Environmental standards are important as well, but in this area the company provides both assistance and time for the subsidiary to work on a more sustainable production. Secondly, laws are changing, which is the case in Brazil and

China. Both countries have lately introduced laws to address corruption. These changes are in favor of PALFINGER’s COC.

The third sub-research question reads as follows:

What is (and could be) done to ensure COC embeddedness across the organization?

This question is linked to the implementation process as discussed in Chapter 3.2. The COC is integrated in the entire organization including external partners such as suppliers.

Expatriates and local managers have the responsibility to communicate the code abroad and partly take the role as trainer. A few years after the initial implementation, a COC video had been introduced. This had increased the level of awareness across the organization. Furthermore, social media channels such as the corporate blog had been used to communicate the code and spread its presence.

The company has taken several steps to embed the COC, but the study reveals that the implementation of the COC is an ongoing-process. The challenge is to continuously present the code and to ensure that understanding is achieved. This means that stakeholders should be confronted with the COC from time to time. The company wants to introduce a COC audit as well as an e-learning platform. Additionally, the COC should be included internationally in the onboarding process, and continuous discussions as well as trainings should be regularly on the agenda. The integrity line, placed centrally on the website next to the career icon, is a useful tool to anonymously report any doubts of fraud and unethical behavior.

The main research question is answered by the three sub-research questions outlined above, which further explain potential challenges during the transfer of the code. Apart from these challenges it had been further discussed that acceptance of the code can differ country-wise (Chapter 6.1.). Furthermore, besides the main research question, the following findings will be discussed:

Based on Hofstede’s and Brinkmann and Ims’ suggestion (Chapter 6.1.) Russia seems to be the country most open to implementing and accepting a COC, followed by Brazil, whereas Canada and the US seem to typically refuse a COC. Interestingly, the results of this thesis present the opposite: Expatriates that worked in the US and Canada did not

have major problems when implementing the code. The interviewees explained that the culture and standards of Austria and the other two countries are quite similar. Canada provides even higher standards in terms of environmental topics than Austria. Therefore, the introduction of a COC was not an issue, since most of the topics had been fulfilled anyway. It was more challenging to introduce the code in Brazil, China and Russia, partly because corruption is an urgent topic in those countries. In Russia, for example, people are used to have a strong supervisor who leads top-down, which was found in this thesis and is in line with the argument in Chapter 6.1. Therefore, the supervisor can implement the COC, and the employees will most likely accept it. However, the issue is that Russians mainly focus on their work and do not question the tasks given or the actions of others.

This means that they most likely would not report any fraud or unethical behavior. This was found out during the interviews. To summarize, the study may provide a basis for a general analysis of countries. The acceptance of a standardized document may depend on more factors such as the company, its structure, culture, etc. and cannot be generalized for all countries.