Game of Harvest

From the rounds of games we played, I learnt that: 1. Groups need to be clear that the goal is to survive for as long as possible to achieve maximum amount of fish but not to outcompete each other. 2. Trust between groups must be built, preferably with some supervision system. 3. Competition among groups should be carried out in a harmless yet fun way. 

People have to come to the consensus that if they don’t play by the rules, the ocean will be depleted for sure and then all will be lost and there will be no winners. A punishment system can also be installed. If the system collapsed, the results will be shown and the team that broke the rule will receive some effective punishment. That way, hopefully all groups will be coerced to abide by some collective rules. 

A supervision system should be established as well. One person from each group will represent the group for communication and they will also form a supervision group that goes around groups at each round to make sure each group is playing by the rule. All 6 people should go around together to also supervise each other. 

An ocean survey method could also be installed since in reality, there are many marine scientists who survey the fish population regularly. Teams can rotate to have the ability to survey the ocean and let others know the condition of the ocean as another way to monitor the system and make sure no team is cheating. The survey doesn't have to be accurate as it is never too accurate in reality. The game moderator can have the power to choose to give the estimation of the fish population info to the investigators in an accurate or inaccurate fashion within a reasonable error range. Such unpredictability should also make the game mimic reality better and more unpredictable. 

We were all able to do the calculation that 25 max fish can be taken each round to keep the fishing sustainable, which means 5 teams only get 4 fish and 1 team can get 5 each time. Of course there is the competition factor involved and all teams want to be the team that has 5 fish in each round. Now it’s time to work on a mechanism that keep the competition fair and fun so people won’t break the rule. 

The competition could go on in another form, as a different game in the game. The representatives of the group could compete on math, trivia, simply rock-paper-scissors or roll the dice to decide which team gets 5 fish in each round. That way, there is still competition, but instead of being based on greed, it will be based on a different skill or luck. Hopefully all teams will participate in the new system and keep the fishing sustainable and fun. 

Eco-industrial park of Rantasalmi

Introduction 

Eco-industrial parks usually evolve on their own, without any conscious or intentional vision. However, Rantasalmi project is said to be the first attempt to plan and organize an eco-industrial park in Finland. The Engineering office Rejlers Oy won a competitive bidding and was chosen to lead the project. The park is located around the Rantasalimi station area with a concentration on wood processing industry. The nearest cities are 45km and 75km away. 

It consists of seven companies: a real estate agency, a wood processing company, a wood product company, a log house manufacturer, a carpentry factory, a family owned transportation and forklift truck service company, a blade maintenance company and a restaurant. There are also many co-operations outside the area whose activities could be relevant to Rantasalmi companies, for example, a fine carpenter company, a regional energy company, a pre-cut house manufacture and marketing company and wood suppliers. Also a consultancy company is involved to bring representatives from the industries together to find ways to increase energy and material efficiency. The management of the team working is done by the committee of the eco-industrial park, under the real estate company(49% government owned). The cooperation among the companies to increase transportation and cost-efficiency is shown in the figure below. 

Saikku, Laura. (2006).

Structure of the regional network

The engineering office Rejlers Oy plays the role of coordination and connecting all actors in the park. It has a central role in the knowledge networks but not in the material&energy exchange network as it is not a material based company.  

The real estate company, Real Estate Rantasalmen Silva Oy manages and maintain the land, also, it acts as a development company to attract more business to the area. It is half owned by the municipality and half owned by Rantasalmi Oy, a log house manufacturer. As shown in the illustration, Rantasalmi Oy has a central role in the resource network because its material connection to most of the other actors. 

Linkage with non-local actors

Non local actors are: Parlatuote Oy, a fine carpenter company; Suur-Savon Sähkö Oy, regional energy company; Ascus Tech Oy, manufactures and markets pre-cut houses. As we can see from the illustration, these companies also play important roles in the material and energy exchange. Parlatuote provides log panels and floor boards to the log house manufacturer, which later sends its wood parts for precut houses to Ascus and the energy company takes all the wood processing waste and turns them into energy used by the park. 

Functions of the network

Eco-industrial park of Rantasalmi provides the benefits of material& energy exchange, collaborating and sharing of networked knowledge and creating values. Its very aim is to increase the competitiveness, attractiveness and environmental image of the firms in the region as well as to reduce the environmental effects  of  the  activities. 

With the supervision of the municipality and help from the engineering office, local companies was able to collaborate, resulting in efficient material flow and energy exchange. The smaller companies produces windows and panels for the production of log house manufacturing through the service of the transportation company. The blade service is also very useful for the park since most businesses involve wood processing. The waste produced in the region, waste wood and saw dust were sent to the nearby power plant to produce electricity and heating for both the park and adjacent residential areas. 

As material and energy efficiency increased, and the amount of waste to landfills, and environmental emissions decreased. This network provided the companies with good corporate image which gave them legitimacy.

Possible constraints 

As discussed above, the network provided connection through the actors in the eco-industrial park and enabled them to share information and resources. However, there are still possible threats. One of the biggest one resulting from social factor, the trust level between the actors. “Relational capacity: capacity for collective action based on the quality of the relationships of actors, such as the number and range of actors involved in the community as well as the level of trust between them” (Spekkink, 2014). In this case, as the project is lead by the municipality and the most powerful local business with the consultancy of an engineering office, it is reasonable to expect the trust factor between companies and the knowledge capacity are high. However, the resource dependency is relatively high, as there is only one transportation company, one blank production and one blade service. If one of them decides to quit, the park might face complications if replacement was not found quickly. 

Saikku, Laura. (2006). Eco-industrial parks: A background report for the eco-industrial park project at Rantasalmi. Publications of Regional Council of Etelä-Savo 71:2006

Spekkink, W. (2014). Building capacity for sustainable regional industrial systems: an event sequence analysis of developments in the Sloe Area and Canal Zone, Journal of Cleaner Production, in press.

Saikku, Laura. (2006).

The Pursuit of Legitimacy

In the documentary, “A Decent Factory”, Nokia, considering itself as the leader of its field, took the initiative to visit one of its suppliers in China and examined the ethics in its operation. It’s not hard to imagine their shock when then went from a developed country with the best welfare in the world to the Chinese factory and saw the working and living conditions of the local workers. The local management were not pleased by Nokia’s intrusion and opinions on how they should operate and take care of their employees while the team from Nokia were first shocked then frustrated by what they were dealing with. 

Growing up in China, I was quite discomforted by the attitude of Louise, the consultant working with Nokia. She seems to be standing at a moral high ground and appeared very condescending when judging the operation of the Chinese factory. Not that I disagree with her opinion that the workers need minimum wage and better working and living conditions, what bothered me is her contempt attitude during the visit. She didn’t show any understanding of the local culture and economic conditions, but just forcing her first world standards in a rigid and judgmental way. 

I frankly am not familiar with that type of factories from my experiences living in China, but I have a sense of how things work in China. It is a developing country with a large population, limited resources and systems far from perfection. Cheap labor is what China’s economy depends on at the moment. In the strive for maximum profit, exploiting the labor is the easiest way to go for the factories (domestic and international) because there are more people willing to work at a “inhumanely” low paid jobs than such jobs available. It is not just China, or this particular factory owner that is exploiting Chinese labor, Nokia, anyone who buys cheap “made in China” products and possibly Louise herself are not free of guilt in this exploitation. It is a sad but realistic phase in the development of a country. What is needed is time, money, better policies and more money but not nonconstructive criticism and mockeries from hypocrites who are incapable of actually helping. 

Now back to Nokia, what's its motives for striving for legitimacy?  Studies indicate that high task visibility is an important factor that pushes a company towards legitimacy(Jiang and Bansal, 2003). Task visibility is how noticeable a company or operation is to the public eye. The production of Nokia production is not very accessible to the public as it doesn’t happen in the open woods. However, Nokia did have a high profile as one of the leading brand in the field, which could be the motivation for its strive for legitimacy, to establish a decent company image and convince its consumers of its morals. As Jiang and Bansal mentioned, “market pressure was the most influential factor impacting environmental management decisions....”(Jiang and Bansal, 2003). Nokia's strive for legitimacy is probably afterall customer driven. 

As for the supplier factory operating in China, shocked as they might be at the sudden attention on the ethics of their daily operation, they will have to find ways to adapt. As Jiang observed,“firms respond quickly to demands from dominant and definitive stakeholders that provide essential resources for them to gain and exchange legitimacy”(Jiang and Bansal, 2003). Nokia was an important costumer to them, therefore they have to strive for legitimacy by Nokia’s standard, otherwise they could lose the business. It is probably why they appear to be cooperating with the Nokia team for the most part, even though reluctantly. 

Now comes the question of “how”. How exactly can this factory respond to the new standard effectively? And how can Nokia achieve legitimacy? It is not an easy question to answer. Surely they can increase the employees’ wage, improve their living and working conditions, however the ultimate question is: who is paying for the extra cost? If the company pays for this cost themselves, then they could be cutting deep into their own profit, which is small comparing to the profit Nokia was making. If the factory increases the price of its product, Nokia can move on to another supplier who is likely to be equally unethical but cheaper. It will take time for Nokia to examine the new supplier, if the same examination would be happening at all. Nokia took a stab into a completely new concept at the time and discovered huge issue of exploited workers, which is commonly existing in developing countries. It might realize that it requires a much bigger social change to deal with the issue hence just gave up on trying. 

If being more optimistic, maybe it was possible for Nokia to take the leadership role in this transition phase by bringing the issue under the spot light and encouraging other companies to also examine their suppliers’ operation ethics . After all, to solve the problem, companies in developed countries should work  with suppliers in developing countries for a solution instead of just simply demanding. 

Nokia and the will to strive for legitimacy through bringing up the ethical standards of their suppliers should learn a lesson from the establishment of ISO 14000. Private companies, mainly from industrialized countries also tried to push for adapting environmental management standards through this process. However, developing countries who actually urgently need such systems were left at the margin of the arena because their lack of funds to participate in the conferences dominated by rich companies and their lack of technical help on implementation from industrialized countries (Clapp, 1998). Companies from developed countries need to be considerate about the realistic ability and social conditions of factories in developing countries and adjust to their pace and give more technical or economical help. With that in mind, it would be more effective for Nokia to give more consistent support and assistance to its partner in China instead of just demands and judgments. 

If it goes well, there is a chance that the mechanism of isomorphism of organization brings bigger social change on the ethical standards of factory operation. DiMaggio observed that once companies doing the similar business construct a field, powerful forces emerge and lead them to be more similar over time(DiMaggio and Powell, 1983). Nokia as one of the powerful forces could potentially lead other companies to pay the same amount of attention on the ethical standards of their suppliers. 

Isomorphism is a powerful mechanism that could be harnessed for desired social change. Besides the companies tendency to mimic the field leader for legitimacy and the normative force brought by education and professional network, the coercive force of government regulation is also a useful mechanism (DiMaggio, 1983). In this specific case, if the Chinese government became tougher on regulations about minimum wage, all the similar factories will be forced to increase their workers benefits. However, this could potentially spike the cost of many daily products we take for granted. If the cost eventually have to be processed by the consumers, a much more increased concern for production and environmental ethics will be required. 




Clapp, Jennifer (2003). The privatization of global environmental governance: ISO 14000 and the developing world. Global Governance 4 1998. Pg 295-316

DiMaggio, Paul J and Powell, Walter W. (1983). The iron cage revisited: insitutional isomorphism and collective rationality in organizational fields. American Sociological Review, Volume 48, Issue 2.Apr. 1983.

Jiang, Ruihua J and Bansal, Pratima (2003). Seeing the need for ISO 14001. Journal of management studies 40. June 2003

Obama EPA issues rules to cut carbon emissions by 30%- -analysis of the decision making

Earlier this year, the EPA under the Obama government released proposal to reduce carbon dioxide emissions by 30% from 2005 level. To achieve this goal, coal fired power plants will have to be toughly regulated since they are one of the biggest contributor to carbon dioxide emissions. At the mean time, there is expected to be huge expansion of natural gas as they emit half the carbon of coal. More solar panels and wind turbines are also expected to be installed. 

Using the year of 2005 as baseline made sure that states that have been cutting down carbon emissions are awarded since the US’s carbon emission has dropped by 15% since 2005. States will have until June 30, 2016 to come up with a plan of their own for the goal or accept the plan forced by EPA. 

Cost of enforcing the plan will be high: “The U.S. Chamber of Commerce figures the plan could scotch $50 billion a year in GDP and prevent the creation of more than 220,000 jobs per year. The hit to household disposable income would be more than $550 billion a year.”

However, it is still well worth doing. The EPA estimates that investments needed to meet the emission limits will cost about $8 billion a year, but would save 6,600 lives and more than $50 billion a year in health care costs tied to air pollution.” Moreover, the Natural Resources Defense Council figures that installing new energy source will create more than 250,000 jobs and will lead to lower energy bills over time. 

Rational actor model 

If this decision is the result of rational actor model, it would mean that the action is optimal, based on beliefs supported by evidences, which are achieved from optimal investment in information gathering. It is based on quite an ideal assumption. 

Supposing we can trust EPA’s ability to gather information on climate change and to predict Global Warming's impact, it is not hard to convince one that something needs to be done to cut carbon dioxide emissions. Coal fired power plants are responsible for about 25% of all greenhouse gas emissions in the US, at about 1 metric ton per megawatt-hour. Therefore, it seems reasonable enough to do something about coal burning. 

Rational decision making means to pursue one’s interest in the most cost-effective way. In this case, switching from coal to gas will be the most effective way to achieve EPA’s objectives. As Hugh Wynne, analyst at Bernstein Research, noted that: ‘The nation’s natural gas power plants are currently operating at an average of  just 45% of capacity. Ramping this up to 90%, while reducing coal-fired  generation by the same amount would have the effect of reducing carbon emissions by 550 million metric tons per year. That’s equal to about 25% of power generation emissions, or about 8% of total U.S. greenhouse gas  emissions.” Therefore, Obama’s EPA’s objective of cutting carbon emissions greatly by switching from coal to gas is not only beneficial but also necessary if we assume all information has been gathered and considered.  

Bounded rationality model

However, we may not want to be too quick to trust that EPA is omniscient. Environmental issues are extremely complex, it is very difficult to predict the impact of climate change. Also, it is never guaranteed that announced rules will be follow through by all states.

As Simon said, “rationality is bounded when it falls short of omniscience”. EPA doesn’t necessarily know that cutting the carbon emission by 30% is achievable or the most cost-efficient solution. Better or more reasonable alternatives might be out there, but EPA doesn’t have the ability to know them all and to calculate the consequences caused by each of them. Putting an emission cutting goal out there is the result of EPA’s limited information and resources. 

Also, EPA is bounded by organizational routines and memory when trying to reach a decision. As Jones summarized in the theory of bounded rationality, “The organizational routines, rules, as rational decisions can for example limit the optimal rational decisions...organizations encode experiences into rules and standard operating procedures that specify actions to be taken in response to categories of stimuli” (Jones, 2003). EPA, as a governmental organization has to follow rules, previous experience and bureaucracy which can limit its ability to reach optimal decision. For example, is cutting carbon emission by 30% really sufficient? Or is this number a result of political agreement to balance different parties' interest (coal companies, environmental agencies and etc)? Why can't this number be higher than 30%? Is it really unattainable or is the decision making process hindered by coal corporates?

On the other hand, is 30% even realistic? It is very difficult for America to cut carbon emissions because they rely too much on coal. The nation gets nine times of energy from coal as from solar and wind. Rushing to replacing coal will possibly lead to blackouts during peak times. EPA might have chosen to trust the mechanism of competitive markets and innovators to come up with better solutions to fulfill the energy demand while cutting carbon emission. The uncertainty is huge. There is no way that EPA would know that it will work out, but at least there is hope so the decision is satisfying enough. 


Jones, Bryan D (2003). Bounded rationality and political science: lessons from public administration. Journal of public administration research and theory. Oct 2003, page 395. 

Helman, Christopher (2014). Obama EPA issues coal-killing rules to cut carbon emissions 30 percent. Forbes. Retrieved from http://www.forbes.com/sites/christopherhelman/2014/06/02/obama-epa-issues-coal-killing-rules-to-cut-carbon-emissions-30-percent/ 

Compiled Comments

1. 
For Rens van de Peppel

Dutch people in my opinion has pretty good environmental awareness comparing to people in other countries. Not perfect, of course. And it is truly a puzzle that people living in a modern society with such amazing access to information are still so poorly informed about our environmental crises. I see that you combined the two topics of first week and I think you can make it a bit more structured so the readers can see clearly which topic you are addressing. Also, for the business is only for profit part, i like you argument but i am not so clear in terms of what your position is. You seems to agree with Friedman but at same time hoping that it is not true?

For Jorinde Vernooij 

I like that you added Simon’s rationality theories in your blog about business. It adds a very interesting perspective. 

As a supporter of Friedman, I have to defend him. I think you might have taken his position a bit further than he intended. For example, i did see him making the point that “companies engaging in socials activities are in opposition to the democracy”. I interpreted him as that business executives are responsible for the company and employees and should not bother with “social good” if it hurts their profit. Social good is responsibility assigned to the state. 

Also i would argue for Friedman that the big companies spending a fraction of their profit on social projects might be doing it to improve the corporation’s image in order to make their product more appealing to the public, which in the end is still for its own profit even though it does good along the way. 

2.

For Franco

I have to admit that I had to look up some of the terms you used ;)

Just one confusion: “utilizing over and over the same company’s systems and habits to achieve this maximum profit”--sorry i didn’t really get what this part means. What system and habit can bring maximum profit?

I think there could be more content on the analysis part. Maybe you can move the relevant facts from the introduction part to the decision making model analysis part to make your point stronger?

3.
For Paulina Gual
Hi, I liked that you used specific examples of your home country water supply companies to explain your point but I would also be very interested to know more details about the operations and how exactly does   “improve wastewater treatment technology and processing”  benefit them.
And on the similar note, I think it would also be helpful to the readers if you can explain a bit more about Ostrom's 10 subsystem variables, assuming your readership is the general public. 
Hope it makes sense. 

4.
For Wybren
I agree with your points that Nokia’s effort of auditing the supplier on site was notable, local circumstances needed to be taken into account when trying to legitimize and that a lot is still needed to be done. 
I think it might be helpful for the readers if you can specify here: “They do this by requesting the supplier to improve on certain points”. Maybe you could give a brief review of these points?
Also, I didn’t really understand what you were trying to say here:  “Furthermore they also try to legitimize the working conditions by saying it is only a temporary job for workers in which they try to save up some money for study.” It will be great if you can provide a bit explanation. 
Hope it makes sense. 


For Alice 
I agree with you that “strive” might be a bit of an overstatement for the companies’ effort for  legitimacy, based on what we saw in the documentary. But I do wonder if you think Nokia is successful in diffusing the sustainable criteria on the “people” aspect, in other words, do you think they have successfully pressured their supplier to treat their employees better? You said they did ok, for a start, but were they effective on that point?

I do like your suggestion in the end of using media to exert pressure on relevant parties. And your blog overall is very clearly organized and easy to comprehend. I should try to do the same with mine. 

5.

For Jochem

I liked your rather straightforward analysis of this classic case as you mentioned the roles of the individual companies and government and concluded with the three regional networks in the end. If I have to propose improvements, I would say to find an academic journal about this industrial complex and dig deeper into the collaboration between the companies and the imperfection and challenges of the complex. 

And a few small things:

First paragraph: “...needed water for their their refinery...” just a typo.

Either make the illustration bigger or describe it in more details would be easier for the readers.

A word to explain the difference between greenfield/brownfield industrial complex would be helpful since your readers might not be clear about it.

“catalyst” might be a better word instead of “catalyser”. 


For Florentine
Obviously your essay is very clear and well-structured. I was very impressed at your thoroughness and attention to details. Clearly you have done a lot of background research and analysis to write such an article. I also really like that you bolded key concepts, make it easy for me to refer back to the lectures. 
One point I find contrary to what I thought is when you discussed the “asymmetric dependency” between companies and the government. Previously I thought “dependency” is a term mainly used to explore the relationship between the companies. I agreed with the point you made there that the companies largely depend on the funding from the government, just not sure if “dependency” is a suitable concept to be used here. Of course I could just be narrow minded. 

Some minor issues with spacing and formatting of the paragraphs. I remember it is a rule that a single sentence cannot be a paragraph. But overall it’s really great work!

6.
For Spyros

I agree with your analysis on the conflict of goals of the game. You also suggested to redefine the game, which is cool, but I didn’t find where your redefinition is. Maybe I just missed it but it might be good if you can state it somewhere clearly? 

I liked that you suggested pantomime and a gambling stage for the gaming side of the game. That sounds fun and exciting, while transforming the competition from scheming to get more fish to have a more fun and open competition. Only possible problem I can imagine is that the “mime committee” have the possibility to cheat since the members in each group can discuss the concepts they will try to persuade the mime committee to do. If all members do that, it might be hard for the committee to decide on one concept to mime. An outsider moderator might be needed for this. Hope that makes sense. 

For William

I like your thoughts on term “profit”, that it is the goal of the game but can be pursued differently, which causes problem to sustain the game. Also relating the game to reality, explaining why setting up a committee can be difficult. 

I see that your approach is to focus on “transparency” but also leaves space for the “game” factor which is interesting. As you discussed, ‘guilt’ is probably not enough all by itself to make the game sustainable. When it goes in conflict with the competition between the teams, I think the will to win will overtake. Possible scenario is that many teams go for the maximum and once the other teams get feedback, they may do the same thing to catch up, and the teams that first went for the maximum may just keep doing the same thing to be in the lead. The system may collapse very fast. Perhaps I am just pessimistic but I do think the conflict between competition and sustainability should be addressed. I did enjoy your argument very much, it is very clear and from quite a different perspective from mine. And I am actually curious to see what will actually happen if we play the game with your rule. 

Evolution of business

"Not business as usual" is a heart warming documentary showing how the entrepreneurs nowadays are creating new business models that can contribute to fixing some current social problems. Unlike the "usual" business, aka the old fashioned capitalists, selling stuff at great quantity and cheap price; the new business models appear to be not just about money but to be environmentally conscious, caring for its community and making social changes. Some may say that Friedman is wrong, business's business is not just making a profit anymore but to drive social changes.

I think it is worth debating if the new business model is driving social changes or if the societal changes are driving the generation of new business models. I, personally, am for the latter. Business is a media that only exist to link the social environment and technology advancement to people, aka consumers. Sustainable businesses that are conscious about the production and life cycle of their materials can only survive when consumers agree with and are willing to support their values. If people are unable to pay the higher price for the ethical products, the new business model simply can’t survive.

There is another reason for the emergence of the new business model. Big corporations, the old fashioned capitalism, has taken control over the traditional business. So entrepreneurs now are left to innovate to have their own business models. New as they may be, the fundamentals of the business are still for profit. The difference is that they are selling a new value or concept but not simply stuff. These kind of business can survive because of the current social conditions that cares for social good. It is great that business are starting to merge into social needs, but that is only the result of increased national wealth, aka, profit from previous capitalism activities in that country. Consumers in developed countries, where these entrepreneurs are, are generally not so concerned with the quantity of the stuff they are buying anymore but quality. Education and wealth have given them the chance to pursue something more, like wellness for themselves and the environment. It is this pursuit that give the new business models a chance to rise. To do good, complying with their target consumers' values to compete with the old businesses. 

In Friedman’s time, he probably just didn't see the possibility of having such a win-win situation. It is understandable because consumers' attention then was mostly still on stuff, how to get more for cheaper. A business like "Eco apparel" whose mission is to sell clothes made with low environmental impact but higher price might not have survived competing with Walmart's cheap but unethical clothes.


Friedman's statement, "Only people have responsibilities...there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits” is still valid. Social goals are good for sure but it can not the main concern for a “business”. Instead, it is the goal of an entrepreneur, and his/her business is the means to do it. A business can go beyond profit certainly but cannot do without it. It is a wonderful thing that the entrepreneurs now want to tackle some social issues and make the world a better place through their business. Their profit making and social good doing now may be more  interdependent than the past. Such may be the advancement of the society.