NOKIA video

This week's blog is about the documentary on Nokia and its supplying factory in China. The main setting in the movie is two of Nokia's representatives checking the conditions workers have to live and work in.

Legitimacy is defined as the activities of a firm striving to be considered as ‘desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’ (Suchman 1995).

Nokia is being legitimate by sending investigators to check the conditions the workers have to live and work in and by allowing the film crew to record the interviews, arousing the impression to be a transparent company.
Actively striving to be concerned about the wellbeing of workers and transparency are very important norms and values within the western society, improving the brand's image to a proper, desirable kind.

The supplying factory is striving for legitimacy, recognised by Nokia's representatives, by answering their questions as extensive as possible, showing them around and comparing themselfs to competing factories. This way the factory is giving the impression of being appropriate,  using important values and norms for Nokia and its customers.
 

The statement that Nokia is diffusing the sustainability criteria in an effective way, is giving me mixed feelings. In one way, watching the documentary gives me a very unsustainable idea about how Nokia products are produced. The way women are treated during pregnancies for example, or the rooms where the workers have to sleep in, need a lot of improvement to measure up to my idea an sustainable working environment. In that case, if Nokia is really willing to produce in a sustainable way, the main idea a viewer would have after watching the documentary would be very different because Nokia would not have chosen this supplier.

In the other way, the supplier is not meeting my ideas of sustainability and therefore so isn’t Nokia. But the fact that Nokia is hiring people to actually check what is going on in the factories of suppliers, trying to comply to international standards on working environments. Because consumers demand for the cheapest products, it can be a dilemma for a company to be competitive on one hand and have a sustainable organization and management on the other.

                A coordination mechanism better than the current controls would be, according to me, a system where the supplying factory would be rewarded for certain sustainable policy on the workers or the production. In this way, the supplying factory would not try to decrease its costs at the expense of the workers but maybe even increase its costs a little, when improving the worker’s facilities, to gain a certain bonus from Nokia.

                Of course, this system is not in favor of Nokia, that would only consider to implement this if it could somehow increase their profits. One way possible is creating goodwill from customers that will prefer higher prices from a sustainable company like Nokia, compared to lower prices from less sustainable competitors. 

Week 3 - Q2

The second subject for this week is about whether or not the proposition of Friedman ("the business of business is to increase its profits") might be put to constructive use in the sustainable management of the coral in Nha Trang, Vietnam.

    For solving the case of the tragedy of the commons, the proposition of Friedman, the business of business is to increase its profits, is not supportive I believe. Because when businesses exploiting resources without clearly defined property rights, and businesses trying to achieve profit maximization resulting from the increase of production and capacity combined with spread out fixed costs, the possibility for overexploitation increases.

    In the case of Nha Trang Beach, if too many tourists visit the area of the coral, it may result in the earlier mentioned deterioration of the reef. Resulting in a situation that is not Social Responsible because the profit gained is not sustainable business.

Week 3 - Q1

The subject for this week was to chose a Socio-Ecological System (SES) where in I have (had) an active part. The goal is to analyse this SES according to the framework that Elinor Ostrom has constructed in her paper 'A general framework for analyzing sustainability of Socio-Ecological Systems' (2009). The framework is presented in the figure below.

The Socio-Ecological System that I have chosen are coral coasts near the city of Nha Trang, Vietnam, that I have visited during a snorkeling trip last summer.  

The resource units in this example are the corals growing in this area. 

The resource system contains the warm salt water pools and rocks on which the corals are growing.

The users are the fish that live and eat in the corals, as well as tourists like me that make snorkeling trips around the area. Private organizations that take tourists on their boats to the area and supply them with snorkels are users as well. The small travel agencies in the city center that make bookings on the boats for tourists. The norm that visiting a coral is ‘cool’ can also be seen as a user.

The governance system contains rules that tourists are not allowed to touch the corals but a strong sanctioning system is lacking. No property rights have been established, as far as I know. The taxation system is part of the governance system too. The Lonely Planet can be considered to be an actor too, because the coral is promoted in the book, expanding the network of visitors to the area.

All those subsystems and variables/actors in this system interact with one another. Resulting in high numbers of visits to the coral every day, partly due to the sharing of information between travelers in Vietnam recommending each other to visit the coral. But also an increasing number of corporations that invest in boats to host tourists because of the relatively large profits that can be made.

Lobbying activities take place too, because all the locals try to create an enjoying experience for visitors, trying to obtain more awareness for the area, attracting more visitors.

A conflict occurs when tourists that cannot communicate in a language the guides speak (English, Frensh, Vietnamese) do not understand the explanation of the rules for visiting by the guides.

The outcomes of those interactions is mainly a conflict between the resource unit coral and the users, tourists, in a way that more and more visitors snorkel in the area and not all respect those rules once in the water. This results in deterioration of the reef.  
The ecological unsustainable situation may result in a decrease of private companies in the area transporting tourists, because after some time not much will be there to see for tourists. This will have a negative effect on the social performance measures.

Externalities to other SESs can be that captains or crew on the boats become unemployed if this complete system is not changing. Unemployment may increase the safety of the country by rising criminal rates, therefore reducing the attractiveness of the country, resulting in even less visitors to other beautiful nature parks.

The detoriation of the coral decreases the biodiversity of the ecosystem, possibly influencing climate change or the threshold of the area to maintain under those conditions. 

References

Ostrom, E., 2009. A General Framework for Analysing Sustainability of Socio-Ecological Systems. Science, Issue 325, pp. 419-422.

Friedman-proposition

     I concluded my blog about the Friedman proposition by agreeing with the statement “the business of business is to increase its profits”. But amusingly, I did not agree when I started writing my own thoughts about it.

     I began with arguing that businesses have the freedom to produce whatever they want and how they want. But during my own reasoning, I realised that if a sustainable business is not able to sell its products or services, it will not be able to maintain. So therefore I changed the point that I planned on to make when I was writing my thoughts about the business of business, from not agreeing to agreeing on it.

     But I do not agree on the way he builds his arguments for the statement. I have built my own argument on the believe that consumers can change the supply, which is something that I learned in my bachelors Earth Science and Economics. So I am not sure what literature helped me to develop that opinion in what way.

     The actual reasoning I made was not collected from any material, I tried to build up an argument on why I did not agree, but in the end only our reasonings were very different but I agreed on the Friedman proposition.

Rational decisionmaking

The news item I have chosen to discuss is the decision of the president of the US to bomb Islamic State (IS). The main actor representing the US is Barack Obama, the president.

The first step in the Rational Actor Model (RAM) is that the actor has an optimal believe about the world. In the beginning, Obama had a believe that IS had to be eradicated because the organization is dangerous for, especially American, citizens.

                The second step in the RAM is that the actor’s belief is supported by evidence. In the case of Barack Obama, the evidence supporting his belief are the video’s posted by IS where American hostages have been decapitated and threats have been addressed to the whole nation and its citizens.

The third and last step in the RAM model is that the evidence must result from optimal investment in information gathering. National and foreign informative agencies have checked the video’s and its content, containing the threats to the US, for authenticity. When those agencies concluded the videos were real and the threats for terroristic attacks in the nation were real, Obama decided his army should start the bombing of IS.