[SSPM] 9/30 Nokia sustainable supply chain government & common tragedy - fish game

NOKIA video Link
This time we look at a documentary about how Nokia company evaluates the working environment in a supply factory in China. The documentary was took in 2006. The director is Thomas Balmès.
The documentary is about the interaction between the auditors from Nokia and the managers from the Chinese factory. Managers in China factories tried to show their effort on how to take care the employees. However, when the auditors asked them why the working environment was so noisy, they started to give excuses. For example, the managers said they already gave the protect equipment for the workers, but the workers took off by themselves. It was not their fault. There were more this kind of response in the video.

Following two question are from the class.
Q1. Is this an effective way of diffusing sustainability criteria?
It is an effective and convenient way for Nokia to diffuse the sustainable idea in China factories because factories want to pass the audition and get the order. Using the term learn from this time, I would define it as a coercive force within the factories, the external pressure, to implement sustainable ideas into the factories. During the examination process, auditors could show their standard of sustainability to the manager, even the could pressure the managers to change the policy right away. In one scene, the auditors asked managers why the toxic compound was put next to drinking water in front of the restroom. The managers gave lots of excuses. They tried to say it would not harm the employee's health because they knew the bottles with the chemicals are dangers. The auditor followed their response and asked them if they could take the risk that workers make a mistake and drink the toxic chemical. Finally, managers could not give any reasons, and decided to put the chemicals to other place right away.

Q2. How would another governance mechanism improve on this?
Here are three different ideas.
1. Nokia could hold the annual sustainable competition in the supply factories. The winner can get the biggest order and the loser might be removed from the supply chain list. Factories have to report their sustainable performance and be proactive in order to get the more order. Due to the competition, factories have to try their best to implement the sustainable practice. (Sanction and set scope)

To get the big order from Nokia is the attractive incentive. In the first competition, factories would develop their own way. In the second competition, they can learn the first year experience from other competitors. (mimicry) If it can run in the cycle, factories can improve not only by the standard from Nokia but also from themselves. Nokia does not pay too much effort to maintain the sustainable management on supplier because of the competition among the companies.

If the supply factories do not take the competition seriously, or Nokia did not show seriously, the positive improvement cycle may be not happened. For example, Nokia only look at the report and not check the real implement in the factories, it would become the competition of writing report, not the real sustainable practice.

2. In order to improve the worker’s welfare, the employees from the supply factories can send their opinions to Nokia. The feedback from the workers would give the factories significant pressure to be proactive to deal with the welfare. In order the get less complain, the factory would try their best to practice to take care the employees.

3. Nokia can send the people from the sustainable department in Nokia to the factories to monitor the sustainable practice and give suggestion to the factories. This would be more direct and expectable than the other two solutions. But Nokia has to send their people around China and put lots of effort on the sustainable development of the supply chain. (monitor, set rules)

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On the same day, we play a sustainable fish game!

Rules:
1. 51 fishes in the sea and they would double each time.
2. Five fishers should figure out some mechanism to use resource sustainably and get the most profit.
Result:
All the fisher took all the fish and the authority took lots of time to make decision but still hard to government all the fisher.

Observation/ conclusion
It is like a small size of the international negotiation because students comes from different countries and have their own goal to win the game. The fighting is always on how many fishes fishers should get each time. It is like what happen in COP15, countries consider their own best benefit and fight for that. In the class fishers try their best to get the most fish for themselves. Because there is one fish left every time, fishers are hard to decide who can get it. We decide to have a authority to decide the fair number of fish each time. However, people do not always follow the decision from the authority. The situation become more complicated because the authority has to think the fair strategy to make this situation more fare and sustainable. Otherwise, if fishers keep taking fish out of the sea without considering the future, it is very easy to run out of them in several rounds.

It takes much time to form the agreement and implement it. Also, the agreement need to adopt new situation soon because the result of each round are not followed the rules. In the final round, we run out of the fishes, although we already have a clear sustainable plan. I assume the reason is we do not have efficient/scared punishment for the bad fisher. Also, if we can alarm the signal of run-out fish earlier and fishers are afraid of breaking the agreement, it still has chance to live longer or even sustainable. I would take this, strict rule and early awareness, in my mind!