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
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
Thanks for writing your blog, my apologies for the late reply.
ReplyDeleteYour blog is actually a blog (instead of a school assignment) well done! The introduction, consisting of a summary of the Nokia Documentary, is a good addition.
Also very nice you have used your own experiences of growing up in China, that makes it even more interesting to read.
You have a very strong way of argumenting and your English language proficiency is clearly at a high level, which convinces a reader to agree with you.
The only thing I missed was the part where you describe a new coördinating mechanism. I think you try to do that in the last two paragraphs, but could elaborate a bit more on that, mainly about the practical implication of such a system.
One point of critique is the length of the article. Even though it was very interesting to read all of it, you could try to be a little shorter in your argumentation.
Thanks again, it was a pleasure to read!