Assignment 6

A solution to the trust between fishers

The situation: the sea contains 50 fish and we have six boats with each fishermen on it. Every year we go fishing with the goal of maximizing our profits and thus catching as many fish as possible. At the same time, we also try to be as sustainable as possible and avoid emptying the sea from the fish. Every year the fish can multiply themselves with one fish. The ideal situation would be if every boat catches four fish every year. As we have 50 fish, we want to leave 25 in the sea in order to get the total of 50 again. The 25 then has to be divided by the six boats, leaving a total of four fish for each boat. The fish can thus multiply themselves and the fishermen have the biggest catch possible while being sustainable. However, as every boat also wants to maximize their profits, the chances are quite big that they decide to catch more than four fish risking the chance that the sea becomes empty, no fish will be left meaning that all the fishers have to return home empty handed. In order to reach this ideal situation of fishing and being in business for as long as possible, regulations have to be made.

Since the six boats can communicate with each other, it is logical that the agreement is made that each boat will catch four fish. It is possible that one boat catches five fish instead of four in a year; this will not harm the sustainability of the fish. Of course, it is the most fair to all boats if this cycles every year so that each boat will have the chance to get this one extra fish. A committee can be assembled consisting of one member from each boat. They will monitor that each boat catches only four fish, and they will do this by collecting all boats before they go to sea. When one boat fishes more than four fish, this will be communicated to all boats and this boat will not be taken to sea. This committee should work as every boat wants to be sustainable and have the opportunity to catch as many fish for the longest period possible. When there is transparency, boats can check each other and the committee will make this easier. 

Feedback week 4

Blog 1: 

I think you gave really nice suggestions in the end that could be easily implemented by Nokia to improve the working conditions. However, I could not find that first bullet point of the assignment, (analyze how the two key organizations in this case (Nokia and the supplier) are striving for legitimacy). Perhaps you could use the article of DiMaggio and Powell to analyze this.

Blog 2:

I really like your point about the two suppliers who come from different organizational environments and the way you elaborate on this in the following parts. However, to me, it seems like you are convinced that it is impossible to have some western standards implemented in China. Although I strongly agree with the fact that the two organizations have very different cultures and environment, I think that some norms of Nokia could actually be implemented and I believe that the supplier was trying to work on it (for example trying to get contracts for the employees). I’m not sure whether this actually happened or not, but I wouldn’t say it is impossible. 

Assignment 5

The regional network of production I choose is the one of Looije Tomaten, a family company that grows tomatoes. It started in 1946 and is located in Naaldwijk. The network consists of seventeen actors, including Looije Tomaten itself. The other actors are:

-          ABN Amro: business segment.

-          ACS: allround computer services. Provides Looije Tomaten with various system management services.

-          Agro guide: helps Looije Tomaten grow a natural, vital crop.

-          Albert Heijn: supermarket in the Netherlands.

-          Bama: supermarket in Norway.

-          EY: company that wants to build a better world.

-          Gautier semences: supplier of tomato seeds.

-          Havecon: designs, produces and builds greenhouses.

-          Hoogendonk Maasdijk: transport company.

-          Kas energie: energy from greenhouses.

-          Priva: controls conditions in greenhouses.

-          Rewe: supermarket in Germany

-          Spar: supermarket in Russia.

-          VEK adviesgroep: international horticulture advisors.

-          Verkabel-Bomkas: greenhouse technology.

-          Waitrose: supermarket in the United Kingdom.

Figure 1: network of Looije Tomaten

All the actors on the left are suppliers to Looije Tomaten, the actors above provide advice and information, the actors on the right are the transporter and supermarkets where the tomatoes are being sold.

This network will be analyzed using two concepts: centrality and the types of regional networks explained by Gordon & McCann (2000). Organizations are dependent on other organizations when they need resources from each other in order to achieve goals. This can lead to dependencies and power structure. In this case, the most centralized actor is Looije Tomaten. When they stop producing, especially the supermarkets will have a big loss as they are not able to sell tomatoes to their customers and have to find another tomato producer. Also Hoogendonk Maasdijk, the transport company, will not have any or less work. The companies that are on the left of Looije Tomaten in the diagram will probably also have negative consequences, but the impact will not be that big as they are delivering a product to Looije Tomaten and also have other customers. If you look at it in another way and one of the companies that are on the right of Looije Tomaten in the diagram will stop delivering their product, it can have big consequences for the Looije Tomaten. For example, if ABN Amro decides to stop providing a loan, Looije Tomaten can go bankrupt as they will not have the finances to continue. The companies that are above Looije Tomaten in the diagram have the least dependencies and impact. They are not essential in the network, but their function is to improve things or to give advice. To reduce dependency, Looije Tomaten can look to alternatives and in this case, they could for example look for another supplier for tomato seeds or greenhouses. The non-local actors in this case are the supermarkets in foreign countries like Waitrose in the United Kingdom, Spar in Russia and Rewe in Germany. Although not immediately evident, they also have a big power over Looije Tomaten. If politics get involved, a country can decide to prohibit import from other countries. This happened in August when Russia decided to prohibit the import of fruits and vegetables from countries that are part of the EU (Volkskrant, 2014). The fruit and vegetable companies in the Netherlands were concerned that the price of their products would decrease and that they would have a big surplus of their products. Thus, even though actors can be non-local, the dependencies between them can be very high.

Gordon & McCann (2000) distinguish three different types of networks: agglomeration, industrial complex and social networks. In this case, the industrial complex type is the most applicable one. Gordon & McCann describe this type of network as one that is characterized by sets of identifiable and stable relations among firms which are in part manifested in their spatial behaviour (Gordon & McCann, 2000: 518). The focus lies on the relationship between the production, cost of transport and the price of local production factors. In this case, the question is why Looije Tomaten decided to locate in the Netherlands, but choose to also ship to countries in and outside of the EU. They could also choose to locate in, for example, Russia where more people live than the Netherlands and the demand for tomatoes is perhaps higher. Looije Tomaten however, is a family company and started in the Netherlands. Furthermore, the Netherlands is one of the biggest producers of tomatoes (z24, 2014) and is specialized in producing tomatoes. Also the cost of transporting tomatoes to other countries is lower than moving the whole organization. However, some critics argue that it would be more logical if the tomato production would move to other countries where the costs of labor and soil are lower, this would make the type of network an agglomeration one where firms are located near each other (Gordon & McCann, 2000: 516).

When looking at working towards a closing material loop with the focus on the network, it is not likely that the loop will be closed. As most of the products eventually go to countries outside of the Netherlands, it would be highly unlikely that the waste of the tomatoes there would be transported back to the Netherlands as it would cost money. Furthermore, the waste of tomatoes is relatively small as this product is usually used for consumption. When looking at the production of the tomatoes however, this can be a closing material loop as the waste like the skin and seeds can be used as a nitrogen source in organic compost (Olamgroup, 2014). However, this would be a choice made by Looije Tomaten itself and it would not be dependent on other actors of the network. The network in this case thus does not really constrain or enable Looije Tomaten to work toward a closing material loop. As Looije Tomaten can be self-organizing when looking only at the tomato production, they can decide that part for themselves. They are however dependent on distributing, selling, and developing the tomatoes.

Bibliography:

Gordon, I. and McCann, P. 2000. Industrial Clusters: Complexes, Agglomeration

and/or Social Networks? Urban Studies 37(3): 513–532.

Olamgroup. Closing the loop on tomato farming with general mills.  [http://olamgroup.com/sustainability/case-studies/creating-compost-crops-general-mills-closing-loop-tomato-farming-general-mills/]. 22 October 2014.

Volkskrant. Russische boycot, prijsdalingen, peerselfies en chaos bij de grens.  [http://www.volkskrant.nl/economie/russische-boycot-prijsdalingen-peerselfies-chaos-bij-de-grens~a3715501/]. 22 October 2014.

Z24. Nederland op Mexico na grootste tomatenproducent.  [http://www.z24.nl/ondernemen/nederland-op-mexico-na-grootste-tomatenproducent]. 22 October 2014.

Assignment 4

In the documentary ‘A Decent Factory’ the ethical researcher of Nokia is followed to a supplier in China. There she investigates the circumstances of the employees and tries to gain information like the wages and how long the work days are. Nokia seeks to extend its sustainability strategy into its supply chain. Their Chinese suppliers have to fit with criteria established by Nokia.

•         Analyze how the two key organizations in this case (Nokia and the supplier) are striving for legitimacy.

DiMaggio and Powell (1983) define legitimacy as demonstrating that they are trying to improve working conditions (DiMaggio & Powell, 1983: 151). In this case, Nokia does this by visiting the supplier in China and tries to examine what the situation is now and they help the supplier implement regulation that will be beneficial for the employees. With the supplier they discuss points and events happening at the factory they think that are not ethical. By doing this, they want to make a statement to the world and their stakeholders who pushed Nokia into being more ethical. DiMaggio and Powell give three explanations why organizations want to be like other organizations, which is called isomorphism. The first is coercive which stems from political influences, the second is mimicry that results from uncertainty and the last is normative, which is associated with professionalization. Coercive isomorphism is the most applicable, as this type results from formal and informal pressure (DiMaggio & Powell, 1983: 150). In this Nokia case, this formal power is the stakeholders. There will be less or no investments from them if Nokia will not agree with their wish to be more ethical. This pressure goes all the way down to the supplier who in his turn works on legalizing the wages so that they can have contracts for the employees. Currently, that is not possible as they do not meet the conditions. They are thus being held accountable by different actors, Nokia by the stakeholders and the suppliers by Nokia. Jiang and Bansal (2003) give reasons why and how the two key organizations try to strive for legitimacy by being environmentally responsible. One of the arguments that apply to this case is that the organization can remain competitive (Jiang & Bansal, 2003: 1050) and by being an early adopter, they can be more efficient (Jiang & Bansal, 2003: 1065). Nokia could thus be choosing for being more environmentally friendly and ethical as it is a symbolic function, but it could also be part of their strategy to remain sustainable and competitive.

•         Is the approach taken by Nokia an effective way of diffusing sustainability criteria?

The approach of Nokia was to visit the supplier in China along with ethic advisors and look at what the circumstances were and how this could be turned into a more sustainable and ethical environment. Clapp (1998) investigated the ISO 14000 standards which are norms and measures that are taken worldwide in order to improve the environment. One of the problems of the implementation of the ISO 14000 was that the norms were usually set by developed, western countries. Developing countries who (that) were supposed to implement the rules found it difficult and mentioned that it affected them greatly. This is an event that is likely to happen in the Nokia case. The people of Nokia visited the supplier and from their point of view, told the supplier what needed to be changed in order to be sustainable. However, the big issue is that these suppliers try to produce at minimum costs which comes with consequences. These can be the wages that are lower than the minimum wages in China and the not so ethical environment of the supplier. By implementing all the regulations that Nokia has given them, they could perhaps lose a big amount of income or even go bankrupt. There is thus a chance that they will not implement this, causing Nokia to not diffuse their sustainable criteria at all. So in that case, this approach is not effective. According to Clapp however, making measures based on environmental performance and not management is an effective way (Clapp, 1998: 308). For example, Nokia looks at the wage (performance), this can be considered effective.

·         How could another coordination mechanism improve on this?

A way to improve this approach is to make the norms and measures together with the supplier. When they can discuss them, the norms and measures will be formulated from both Nokia’s  and supplier’s perspective. There will then be a bigger chance that the supplier will actually implement the new rules and measures (Clapp, 1998: 306), making the organization more environmentally friendly and ethical. This also means that the suppliers will become a more important actor as this will not only be top-down, but also bottom-up. This does not necessarily have to be a bad thing as the actor at the ‘bottom’ usually also knows best what the circumstances are. Furthermore, Prakash (2001) argues that suppliers can be seen as key stake holders (Prakash, 2001: 292). Their cooperation and opinion are therefore an important matter.

Bibliography:

Clapp, J. 1998. The privatization of global environmental governance: ISO 14000

and the developing world, Global Governance 4(3): 295-316.

DiMaggio, P. and Powell, W. 1983. The Iron Cage Revisited: Institutional

Isomorphism and Collective Rationality in Organizational Fields, American

Sociological Review, 48(2): 147-160.

Jiang, R. & Bansal, P. 2003. Seeing the need for ISO 14000, Journal of

Management Studies June 2003; 40(4):1047-1067.

Prakash, A. 2001. Why do firms adopt beyond-compliance environmental

policies? Business Strategy and the Environment 10(5): 286-299.

Feedback week 3

I think it is nice to start with explaining the concept of a SES as this made it more clear.  I also like your analysis, however you talk about 10 variables Ostrom gives, but I cannot find all 10 of them in the text. Perhaps you could make them more visible by naming and explaining them. Furthermore, I think you have integrated the piece about Friedman very accurately. 

Feedback week 2

Hi Hans Peter,

In one of your paragraphs of your development on the Friedman position you write that he states that ‘a business that has other interests than just generating profit would not be called a business’ and you agree with Friedman. I think you can elaborate more on this and you don’t explain why you agree with him. Secondly, I think you could begin earlier with you statement you actually wanted to make and maybe shorten the text above it as it can be confusing with so many arguments. As for the other assignment, perhaps you could add your view on what bounded rationality as this will help explain your arguments and statements you make. On a last note, I think your blog posts are well written!  

http://hanspeterhonkoop.wordpress.com/

Hi Marie-Louise,

I think you have explained the theory about rational choices and bounded rationality clearly, but perhaps you could elaborate more on explaining the case from the bounded rationality perspective. You gave 6 principles, but I could not find all of them in your explanation. Furthermore, I couldn’t find the second part of the assignment (Write down how materials provided and collected have led you to develop your position on the Friedman-proposition).

https://sspmblog.wordpress.com/

Assignment 3

1.       1. 

In her article Ostrom (2009) gives a general framework that is used to identify ten subsystems that affect the likelihood of self-organization in efforts to achieve a sustainable social ecological system (Ostrom, 2009: 419). The framework consists of four first-level core subsystems: resource systems, resource units, governance system and users. Each of these core subsystems is made up of multiple second-level variables. There are several variables to be found in the article and the choice of variables depends on the particular questions under study, the type of SES, and the spatial and temporal scales of analysis (Ostrom, 2009: 420).

Resource system

The resource system here is the one of honey production in Europe. As honey is produced by bees, the sector (RS1) is beekeeping. However, as bees are also responsible for pollinating 84% of the agriculture in Europe, one could argue that the sector consists of more than just one sector (European Commission, 2014). This brings us to the following variable: size of resource system (RS3). The size of the resource system of honey production alone is not too big. The big players are the beekeepers who take care of the bees and are responsible for the production of the honey. When looking at the land the beekeepers use, it can be concluded again that this is not a lot. For example, in the Netherlands there are 7000 beekeepers (Telegraaf, 2014). Taking all of this into account, it can be concluded that bee keeping is small scaled.

Resource units

The resource units in this case are the bees. When looking at the growth rate or replacement rate (RU3), it can be stated that the growth is decreasing. One cause can be found in the use of pesticides and illnesses. Although there was a growth of 7.1% between 2005-2010 in 22 countries of EU, many countries have seen a decrease of bees (Nieuws, 2014). Another source mentioned a loss of 20% of the population of bees over the last five years (Telegraaf, 2014). This causes big problems as bees are connected to the growing interest and need of biofuels made out of rape, sunflowers and soybeans. These are all plants that need pollination. That is also why the EU came with regulation prohibiting pesticides and tried to increase the population of the bees again (Nieuws, 2014). The economic value (RU4) is therefore big as bees do not only produce honey, but have a large interest in agriculture and biofuels.

Governance systems

As stated earlier one of the government organizations (GS1) is the European Union. They have regulations and measures concerning the protection of Europe’s bees. Furthermore, they also have regulations concerning the labeling of honey. For example, information about the honey, country of origin, weight, product code and shelf life needs to be provided (Imkersleiden, 2014). In this sector, there are also nongovernment organizations (GS2) active. Some are for example the unions for beekeepers. The Dutch bee union for example has the mission to create optimal conditions for beekeepers so that they can keep bees in a professional way (Bijenhouders, 2014). Others are the stores that sell the honey, or organizations that process them or use honey in their products. The monitoring and sanctioning processes (GS8) are the task of the countries that are part of the European Union as they have to implement and monitor the regulations.

Users

The number of users (U1) depends on the amount of people who eat honey and all of the products involving honey. The size of the group is relevant as the bee production could decrease or disappear altogether in the worst case when people stop eating honey and honey products. Knowledge of the resource (U7) can either destroy or improve the sustainability of a resource. In this case, the actors that are involved are aware of the shrinking bee population. The importance of resource to users (U8) can also improve or destroy sustainability. In successful cases of self-organization, users are either dependent on the resource for a substantial portion of their livelihoods or attach high value to the sustainability of the resource. Otherwise, the costs of organizing and maintaining a self-governing system may not be worth the effort (Ostrom, 2009: 421). As eating honey or honey products usually is not a matter of survival, the likelihood of self-governing is not that big.

Conclusion

The resource system seems to be small and also the population of bees is shrinking. When analyzing these two variables, the chances on self-organization seem to be big. However, when looking at the governmental and users variables, it seems small as the users are  not that dependant on honey. So are the chances of self-organization in the bee production big or small? When taken into account the effect that the bees have, not only in producing honey, but also the other agriculture and biofuels systems, it is clear that there is a need of governmental system which is actually also the case. Regulations are needed that improve the amount of bees which have an effect that can be measured on several levels.

Bibliography

·         Bijenhouders. Missie en doel. [http://www.bijenhouders.nl/over-de-nbv/missie-en-doel]. 8 October 2014.

·         European Commission. Beekeeping, honey production and wild bees. [http://ec.europa.eu/food/archive/animal/liveanimals/bees/index_en.htm]. 8 October 2014.

·         Imkersleiden. Regels voor etikettering van honing. [http://www.imkersleiden.nl/index.php/vereniging/24-etikettering]. 8 October 2014.

·         Ostrom, E. (2009). A general framework for analyzing the sustainability of social-ecological systems, Science 325, 419-422.

·         Nieuws. Bijentekort Europa door meer biobrandstof. [http://www.nieuws.nl/algemeen/20140109/Bijentekort-Europa-door-meer-biobrandstof]. 8 October 2014.

·         Telegraaf. Imker vreest doodsteek door strenge EU regels. [http://www.telegraaf.nl/feed/krant/krant_financieel/21766248/__Imker_vreest_doodsteek_door_strenge_EU-regels__.html]. 8 October 2014.

2.       2. 

In the previous post it was concluded that Friedman argues that businesses should focus on business and that social responsibility is a matter of the government. Social responsibility is comparable to sustainable management of social ecology systems. It therefore does not seem logical that the principle of Friedman can be used in a constructive way to manage a SES. However, as the framework of Ostrom (2009) showed, resources are very important in a system. When these resources become scarce, it is very hard or even impossible for a business to make profits. In order to keep making profits, it can be crucial for a business to be sustainable.

Feedback week 1

Hi Anne,

I think you formulated your view on the position clear and the two examples are a positive addition. My only suggestion is that you perhaps could elaborate more on what you called ‘the next step’. Again, I think your three alternatives are clearly explained, but I’m not really convinced of the comparison that is made between a sustainability transition and the labor sector. Perhaps you could give more arguments. Furthermore, I really like your use of pictures. 

Feedback given to socialsystemsinperspective.wordpress.com, the other blog did not had a blog post.

Assignment two

1

On Friday 26 September the Dutch parliament announced that they have chosen three locations where windmills are going to be built on sea. Earlier, the parliament had given nine permits to build wind parks. These will be withdrawn. Minister Kamp of the Ministry of Economical affairs has stated that there will be five big wind parks instead of several smaller ones. This way, the parliament can save 4.2 billion Euros over a period of fifteen years. Furthermore, they can meet the agreements in the ‘Energieakkoord’ (Energy agreement) faster and these five wind parks will have less visual pollution than the several smaller ones. Not everybody is content with this decision, the municipality of Noordwijk thinks the construction is disappointing as the unique view over the sea will be ruined (NOS, 2014).

Elster (2007) states that an action is rational when it meets three optimality requirements: the action must be optimal given the beliefs, these beliefs must be well supported given the evidence and the evidence must be a result from an optimal investment in information gathering (Elster, 2007: 191). This does not mean that the beliefs are true, but the actor is convinced that they are. Furthermore, rational choices are subjective (Elster, 2007: 191). In this case, the actor is the government who sees the building of five big wind parks on three locations as the optimal. They have several benefits as they can save on costs, meet agreements faster and it causes less pollution. These are all advantages on problems that the government has to deal with. For example the economic crisis has led to measures the government needed to take in order to reduce the deficit (Rijksoverheid, 2014).  Even though they are aware of the resistance of the municipality of Noordwijk, they are convinced that this decision is for the best. They have based this decision on research and for example, a delegation of the Houses of Parliament have made a walk over the beach of Noordwijk to Zandvoort to look at the consequences of these wind parks at sea (NOS, 2014). This decision thus meets the three optimality requirements as they are convinced that is optimal when looking at their beliefs, it is supported by the evidence as it causes at least those three benefits and they have researched this.

Simon (1979) describes bounded rationality as when the goals of an organization cannot be connected operationally with actions, the decisions then will be judged against subordinate goals that can be connected. The formulation will depend on knowledge, experiences and organizational environment of the organization (Simon, 1979: 500). In this case, this can be applied in the form that the Dutch government wanted to have more green energy in the country, with the lowest cost and the smallest amount of nuisance. Maybe the other option of several smaller wind parks would keep the municipalities content and would lead to less nuisance, but they choose it anyway as it has benefits as saving on money. It could also be the case that the government did not know of other options and thought that this was satisfactory enough and therefore decided to execute it, even though they knew that this was perhaps not the optimal decision. Lastly, another alternative is that there were a few options in order to generate  more green energy, but that this was an option that did not need more research before it could be executed and of all the options, this was the cheapest. It could be the case that the three locations with five wind parks was not the optimal decision, but the most satisfactory.

·         Elster, J. (2007). Explaining Social Behavior: More Nuts and Bolts for the Social Sciences. Cambridge University Press.

·         NOS. Kabinet: drie locaties wind op zee. [http://nos.nl/artikel/702981-kabinet-drie-locaties-wind-op-zee.html]. 28 September 2014.

·         NOS. ‘Molens verpesten uitzicht over zee’. [http://nos.nl/artikel/703133-molens-verpesten-uitzicht-over-zee.html]. 28 September 2014.

·         NOS. Het wordt zo wel een heel aparte zonsondergang. [http://nos.nl/audio/634559-het-wordt-zo-wel-een-heel-aparte-zonsondergang.html]. 28 September 2014.

·         Rijksoverheid. Schatkist op orde brengen. [http://www.rijksoverheid.nl/onderwerpen/overheidsfinancien/overheidsfinancien-op-orde-brengen]. 28 September 2014.

2

Friedman (1970) states in his article ‘The social responsibility of business is to increase its profits’ that businesses do not have responsibilities, but that people do have them (Friedman, 1970: 173). According to him, businesses should only use their resources and engage in activities designed to increase its profits as long as it is within the rules (Friedman, 1970: 178). In other words, he states that businesses should focus on business and that social responsibility is a matter of the government. When looking at the literature provided about how rational people are, one could argue that people search for an optimum. In this case, people who work at a business organization should therefore indeed only try to increase its profits. The government would want to take its social responsibility, and indeed search for the best way to do it. It should then be a matter of the government and not of the business if everybody would fit the rational decision making model. If we however look at the bounded rational model, there are changes that businesses would not see themselves with the task of only making profits, but the alternative of also fulfilling their social responsibility. As I do not think people would always make rational choices, my position is that the task of businesses is not only to increase its profits. Along with the government, non-organizational organizations and other actors, businesses can take its social responsibilities and not only through people, but as a business itself.

·         Friedman, M. 1970. The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine. September 13, 1970.