This blog post is based on the documentary "A decent business", shown in the SSPM course lecture on thursday 9th of october, 2014. The documentary is available online as well. To be able to understand the this blog post, I advice you to watch the documentary.
I was quite amazed by the English speaking fellow who guided the ethical assessors of Nokia through the factory and was so open and even laid-back about the situation the factory was in. People being payed under minimum, fining them for being too late and not even having set up contracts with every single employee. He was telling all this, looking as if he doesn't care at all. This observation gave me the idea that this guy would get fired immediately after this documentary aired.
So why would the bloke be so indifferent about the situation? The first thing that comes to my mind, is the helpless situation the factory manager is in. He knows that whatever he says, true or false, it is somewhere on paper and can be checked. So better be honest, at least the guy knew what he was doing, as his body language suggests when exposing the factory's (illegal) activities. He does not take on the role of the victim, I give him that.
Then why is the situation so helpless? Well, NOKIA, probably your biggest client, is on your doormat with a camera crew and they insist that you open up your doors to an ethical assessment. Appearantly NOKIA strives for legitimacy. The documentary aids NOKIA in this in three different ways from my point of view:
1. Obviously NOKIA aims to spread the message "we care" to the rest of the world.
2. Appearently, they are not too scared on showing their inside practices. They even show their naked managers in the very first seconds. Literally a companies being transparent, living up to a word that in my opinion is used a lot but the definition takes many forms.
3. They even criticise themselves. In order for NOKIA to be "fair", start with yourself. This is quite the statement, practically saying nobody's perfect, but we are working on it.
The factory management also strives to be perceived as legitimate. Even the simple things as the big boss saying "all these workers are my friends" with a big smile. A few moments later the guy picks out some workers from the floor for an interview, not even bothering in asking their names. Their numbers suffice. Another way of striving for legitimacy is trying to keep the factories operations within the legal boundaries. "We can't offer our workers legal working conditions? Then we make sure that technically speaking, they all don't work here" (by not giving them contracts ofcourse).
Seems like some harcore marketing by NOKIA, right? Nokia becomes the advocate of sustainability criteria within supply chains (for mobile phones). On the other hand, why did NOKIA choose this factory in the first place? Is it not a bit shady that this ethical check is being done now? Why didn't they check the factory before they started doing business with them? Or why didn't they aid in developing the factory in such a way that all of these circumstances would have been different? This does not become clear from the documentary, so I cannot judge. However, I think the sustainability criteria are "end of the line" criteria. I think there should be clear criteria on what line you set in motion. What factory are you going to do business with and why. These are the sustainability criteria that I would like to see.
Nevertheless, Nokia strives for legitimacy and does this by applying coercive pressure on their supplier by knocking on the door with an assessor. It seems from the documentary that Nokia is the factories only buyer, since they seem to have a lot of power when walking around the factory (demanding information, interviews and meetings).
Other ways of reaching legitimacy for Nokia's supplier are mimicry and normative pressure (DiMaggio & Powell). Mimicry is a way of characteristics transmission among suppliers when a growing number of suppliers in China adopt the operations criteria that comply with Nokia (and probably more companies), resulting in other suppliers to follow this trend, mostly fueled by growing uncertanty. Normative pressure can cause characteristics between organizations or organizational fields to change from within the organisation or field. Education of more sustainable ways of operating production facilities brought along by new employees can start changes for example. A possibility would be that Nokia becomes active in the hiring process of managers of the suppliers factory in order to stimulate normative pressure by hiring persons that bring along the desired norms.
I was quite amazed by the English speaking fellow who guided the ethical assessors of Nokia through the factory and was so open and even laid-back about the situation the factory was in. People being payed under minimum, fining them for being too late and not even having set up contracts with every single employee. He was telling all this, looking as if he doesn't care at all. This observation gave me the idea that this guy would get fired immediately after this documentary aired.
So why would the bloke be so indifferent about the situation? The first thing that comes to my mind, is the helpless situation the factory manager is in. He knows that whatever he says, true or false, it is somewhere on paper and can be checked. So better be honest, at least the guy knew what he was doing, as his body language suggests when exposing the factory's (illegal) activities. He does not take on the role of the victim, I give him that.
Then why is the situation so helpless? Well, NOKIA, probably your biggest client, is on your doormat with a camera crew and they insist that you open up your doors to an ethical assessment. Appearantly NOKIA strives for legitimacy. The documentary aids NOKIA in this in three different ways from my point of view:
1. Obviously NOKIA aims to spread the message "we care" to the rest of the world.
2. Appearently, they are not too scared on showing their inside practices. They even show their naked managers in the very first seconds. Literally a companies being transparent, living up to a word that in my opinion is used a lot but the definition takes many forms.
3. They even criticise themselves. In order for NOKIA to be "fair", start with yourself. This is quite the statement, practically saying nobody's perfect, but we are working on it.
The factory management also strives to be perceived as legitimate. Even the simple things as the big boss saying "all these workers are my friends" with a big smile. A few moments later the guy picks out some workers from the floor for an interview, not even bothering in asking their names. Their numbers suffice. Another way of striving for legitimacy is trying to keep the factories operations within the legal boundaries. "We can't offer our workers legal working conditions? Then we make sure that technically speaking, they all don't work here" (by not giving them contracts ofcourse).
Seems like some harcore marketing by NOKIA, right? Nokia becomes the advocate of sustainability criteria within supply chains (for mobile phones). On the other hand, why did NOKIA choose this factory in the first place? Is it not a bit shady that this ethical check is being done now? Why didn't they check the factory before they started doing business with them? Or why didn't they aid in developing the factory in such a way that all of these circumstances would have been different? This does not become clear from the documentary, so I cannot judge. However, I think the sustainability criteria are "end of the line" criteria. I think there should be clear criteria on what line you set in motion. What factory are you going to do business with and why. These are the sustainability criteria that I would like to see.
Nevertheless, Nokia strives for legitimacy and does this by applying coercive pressure on their supplier by knocking on the door with an assessor. It seems from the documentary that Nokia is the factories only buyer, since they seem to have a lot of power when walking around the factory (demanding information, interviews and meetings).
Other ways of reaching legitimacy for Nokia's supplier are mimicry and normative pressure (DiMaggio & Powell). Mimicry is a way of characteristics transmission among suppliers when a growing number of suppliers in China adopt the operations criteria that comply with Nokia (and probably more companies), resulting in other suppliers to follow this trend, mostly fueled by growing uncertanty. Normative pressure can cause characteristics between organizations or organizational fields to change from within the organisation or field. Education of more sustainable ways of operating production facilities brought along by new employees can start changes for example. A possibility would be that Nokia becomes active in the hiring process of managers of the suppliers factory in order to stimulate normative pressure by hiring persons that bring along the desired norms.
I like the way you introduce the situation, it seems like you are talking to me through your blog. It sets a good atmosphere and also reflects what you think of the situation. I agree with your points of Nokia and how they are striving for legitimacy. I think the example that you give of how the management tries to strive for legitimacy, is part of a bigger problem and wanting to show the auditors that the workers are in good hands. The ‘no contract giving’ problem is a weird situation. By not giving the contracts the workers are working illegally and nothing is documented. On the other hand, if there is a contract then they would break almost every rule which is in that contract. So the knife cuts two ways and both ways is wrong.
BeantwoordenVerwijderenI think that Nokia realized that it has to start showing the consumers that they are doing business responsibly. Consumers are becoming more aware, which is why Nokia started to do audits. Before, the principle of Friedman was leading and it was all about profits. I think this was the main reason why the audits were done after doing business, instead of before. I fully agree with you that this chain of events is not how it is supposed to be and that factories should be checked before they become suppliers. However, I do think that they would take their experiences into consideration when looking for a new supplier.
I am missing the recommendations for other coordination mechanisms. I am quite curious to which coordination mechanisms you would propose.
First, I think it is good that you are being critical and address the criteria that should be taken into account by a company, such as Nokia. However, I would rephrase the first paragraph. The language you are using is quite explicit and you could be a bit more nuanced in your opinion and consider cultural differences.
BeantwoordenVerwijderenFurthermore, try to make a distinction between the factory and Nokia, this makes it easier to analyse the two organizations in their pursuit for legitimacy.
Moreover, although you briefly touch upon it, you do not really answer if the approach taken by Nokia is an effective way of diffusing sustainability criteria.
Additional, you mention criteria that should be taken into account by Nokia, but you do not really explain which coordination mechanisms could improve diffusing sustainability criteria.
Final, when adjusting the above mentioned points, you will have a critical evaluation of Nokia and the factory.