Archive for the ‘Responsible business’ Category

Union officials Joe and Jane congratulate managers Zanko and Anthony on the arrival of the new, safer stock picker, driven by Dave.

Union member Dave showcases the newly-arrived, safer stock picker. Union officials Joe and Jane and managers Zanko and Anthony all worked to this moment.

Here are two of my colleagues at a furniture distribution centre in Western Sydney. The photo is for an article in the next edition of the union journal about an innovative safety improvement that resulted from constructive collaboration between the union and site management.

The picker in the photo is the first of its kind. It is designed to lift goods up to 8 metres off the ground. The operator walks out of the cage onto the platform where he or she moves goods on and off the shelves. A harness is provided so they can’t fall but that’s only half the problem: if you place too many goods on the platform, the weight can tip the whole picker. Sadly one of these officials has dealt with a situation where exactly that happened, resulting in the death of a worker who fell onto a concrete floor.

The good news is that the hazard was raised with site management who accepted that it was a legitimate concern and set about working with Toyota to devise this first-of-its-kind picker that automatically measures the weight on the platform and sounds an alarm if load limits are approached.

I post this on here because the Murdoch-dominated press coverage of unions in Australia is so overwhelmingly negative that it’s worth remembering what the real work of unions looks like on a day to day basis.

I might also add that fresh data out of the UK shows that, in recent years, rises in union density are associated with rises in productivity.

The happy picker operators at this site are in no doubt why that is so.

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21st Century citadel

Citadel for 21st Century aristocrats?

One thing absent from this blog is a ‘Theory of Everything’, reducing everything back to one fundamental explanation. The closest I’ve come may be a recurring line that humans tend to make decisions in a reactive way, a.k.a. short-termism. Locke and Spender’s book Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance certainly provides a grand unified theory of everything wrong with the world of commerce, including the issues with globalisation that I highlight on this blog and a lot more besides.

The idea can be summed up very briefly: “managerialism” (as distinct from management) is the belief that membership of the management caste and its codified knowledge gives one an entitlement to govern, and not just to govern companies but governments and nonprofit institutions as well. This knowledge is acquired in business school. Yet, the authors argue, business school education is disconnected from real life. It describes the world in quantitative terms that assume perfect, closed systems and ignores tacit knowledge. It mistakes the balance sheet for reality. Despite its hubris, Business education had no role in instigating the biggest revolutions in business in the last 40 years: the quality revolution and the tech start-up phenomenon, both of which happened in spite of rather than because of what people learn in business school.

That wouldn’t be so bad if managerialism was a purely theoretical belief but business schools are not fringe organisations; people instilled with these notions do become real-world managers. The result is managers who, with their excessive emphasis on financialisation, believe their main task is to drive up the stock price, not to make products well. Products are of secondary importance only. The results speak for themselves: tottering companies in the Anglophonic world that lurch from one stock price boosting initiative to the next, undermining their own long-term value before being bought out or collapsing under their own weight (not that the responsible executives care, having long since departed for new pastures). Locke and Spender contrast this with German and Japanese firms where managers do not think of themselves as a caste apart and adopt more collaborative governance styles aimed at the long-term prospering of the enterprise for the benefit of all involved including, not least, customers.

Locke and Spender also comment on the failure of Christian Churches in the English-speaking world to provide a moral counterbalance to the amorality of Business School education (something I too noticed last year in this post). In both the Chinese and Islamic worlds, economics is paired with ethical imperatives. By contrast, ethics as taught in Business school is subservient to economic values and therefore ultimately futile:

self-interest in financial firms cannot be a “good” unless their market trades are involved in wealth creation. Since they are not, and business schools are doing nothing institutionally to promote financial markets as wealth-creating entities, business school talk about ethics is a concoction of fantasy (p. 173).

Ouch.

My only criticism of the book is that it spends lots of time talking about cultural differences which is all very illuminating but I expected more space would have been allocated to business education specifically. I’d suggest William Deresiewicz’s Excellent Sheep might make a better starting point for anyone interested.

Postscript

Right on the second page, there is an acknowledgment of former Christian Brother Godfrey Regio’s film Koyaanisqatsi as the source of the book’s subtitle “How the Business Elite and Their Schools Threw Our Life Out of Balance”. In a pleasing circularity, the end credits of Koyaanisqatsi acknowledge the work of former Jesuit Ivan Illich for ‘inspiration and ideas’ and Illich, fittingly, is best known for a book titled Deschooling Society.

I wrote about Illich’s ideas in this post.

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The past few days saw the coincidence of two events relating to Bangladesh factory safety, the latest developments since the April 2013 Rana Plaza disaster that resulted in the death of over 1,000 workers who were making clothes destined for the shelves of American and European retailers.

The first is the 2000-person World Congress of UNI Global Union, one of the global union federations (GUFs) behind the Bangladesh Accord, which is still underway in Cape Town. The second was the 3700-person Dhaka Apparel Summit and associated International Trade Expo for Building and Fire Safety, held in Dhaka. The latter were held with the involvement of the Bangladesh Alliance, the rival, employer-led response to Bangladesh factory safety.

The two events illustrate the difference in the two approaches, which could be characterised as bottom-up versus top-down. The GUF-backed Accord regards independent trade unions as the optimum solution. However there is a catch: unionisation in Bangladesh’s garment sector is almost negligible and neither the government nor employers encourage their formation. The Accord’s backers are of the view that the workers of Bangladesh may be waiting around forever if fully-fledged unions were seen as the ‘only’ solution and have accepted the proximate goal of establishing work health and safety councils in the various factories who sign up to it. Such councils are not the same as independent unions but at least, it is hoped, they don’t displace unions.

Other than completing many safety inspections it is difficult to measure what the Accord has accomplished. At least there has not been another Rana Plaza so that is something.

What bothers me about it is that there is a garment workers’ union in Bangladesh, the National Garment Workers Federation (NGWF). This is them:

Hameem 3

Hameem PM pic 3

Curious what the guy with the microphone is saying? Yeah, me too. Something tells me he isn’t talking about how great the factory conditions are but rather voicing grievances about wages that are too low to live on, wage theft and recalcitrant employers. Unfortunately we aren’t hearing his voice, we are hearing from the Global North staff doing the much narrower work of the Accord, telling us how much progress has been made.

The problem is, the NGWF has only a very small number of members in an industry with 4 million workers. Yes it’s legitimate and democratic but it does not have the reach to make a significant impact. What does one do, stand by and wait for it to scale up, which may never happen? Essentially the GUFs are doing nothing different to what many NGOs and UN bodies do: intervening to prevent disaster rather than waiting for local organisations to develop the capacity to do it themselves. That’s fine as long as there is a real plan to hand over but I’ve not heard that there is one, only a hope that it will be possible at some point in the future.

In fact there is no guarantee that unions in the developing world will ever “grow up” into mass-membership organisations that practice a congenial form of tripartism (co-operation between workers, employers and the state), as the affiliates of the GUFs do. I am not convinced that the twenty-first century economy will be structured in a way that will allow that to happen. Rather than looking at developing world labour movements through the lens of the twentieth century we should accept that the developing world of today is not going through the comparatively gently staged process of modernisation that happened in Europe and the United States. People are moving directly from their parents’ farms to a first job in workplaces with inscrutably complex ownership structures (see related post). Perhaps those of us in the Global North should spend more time learning how people are grappling with this reality on the ground and ask how we might assist them to win power in their workplaces before rushing at short-term but possibly unsustainable fixes.

Still … it’s better to get most of what you want than hardly any of what you want

The limitations of the Accord’s approach should be kept in context. Total inaction was a real possibility, which would have resulted in no improvement at all. However we also have an example of how not to do it; the Bangladesh Alliance who are behind the Dhaka Apparel Summit who obligingly drew attention to the difference this past weekend.

The industry groups backing the Alliance make themselves the subject rather than the object of the process. They proactively ‘sell’ safety and training products to businesses operating in Bangladesh. One has to wonder just how beneficial this really is to Bangladeshi workers. A bunch of white expat workers fly in and sell products to other white expat workers. The money probably doesn’t even change hands in Bangladesh. I smell opportunism. Meanwhile the Bangladesh government, rather than actively directing what is going on, stands back and watches.

As I learned earlier in the year,

What would have been really good for Bangladesh as a country would be to establish an internal market for higher-end manufacturing of this sort, creating higher-paying employment for Bangladeshis. Alas it appears the opportunity has been missed and the Alliance’s net contribution to the situation is to make people in the Global North even richer. Meanwhile, street demonstrations over wages will continue in the streets of Dhaka.

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the back office

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CompendiumOfSocialDoctrineThe last week saw a watershed moment for Catholicism in the Anglosphere: the Catholic Bishops Conference for the U.S. state of Maryland endorsed the political objective of raising the minimum wage.

Why is this a big deal? For decades the Church’s hierarchy in the USA have been more inclined to speak out on personal morality issues. Pundits might attribute the shift to the Pope Francis effect but really it’s a moment that had to come sooner or later as the American Dream is manifestly not working out and the majority of the country is seeing their living standards go backwards.

What it draws attention to is just how anemic English-speaking Catholicism is on economic matters. Other than the Maryland bishops, who is seeking to apply the clear words of the Gospels or of papal and conciliar documents into specific, present-day proposals?

I was pleased to learn that a French author Antoine R. Cuny, a layman, has written a book called Finance Catholique; a wholesale critique of the existing system of global finance in the light of Christian values (alas it has not as yet been translated into English). He sets out in pretty direct language what financial practices are and aren’t acceptable to Christian morality. What a refreshing change from the timid, oblique suggestions English speakers have become accustomed to. This is his list of eleven ‘financial sins’:

  1. Price volatility due to speculation
  2. Wage inequality
  3. Excessive use of leverage
  4. Commodification of workers
  5. Short-termism
  6. Losing sight of non-economic values such as scarcity & productivity
  7. Failure to share the profits from an enterprise
  8. Anonymity and disempowerment of investors
  9. Tax havens and tax avoidance generally
  10. Adverse effects on the environment
  11. Lack of transparency

In the employment relations field, there used to be an entire confederation of trade unions active in Latin America and Continental Europe which promoted Christian social doctrine in economic matters, the World Confederation of Labour. It merged with the International Confederation of Free Trade Unions (now ITUC) in 2006 and its voice disappeared into the secular arguments used by the larger organisation. Nothing against secular arguments, but there is definitely a loss of synergy with the pulpit, the result being that churchgoers waste time fretting about cultural trends that they can’t influence while not looking too closely in the mirror when they go to work.

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The Las Vegas Strip World of Coca-Cola museum ...

The Las Vegas Strip World of Coca-Cola museum in 2003 (Photo credit: Wikipedia)

On the penultimate page of his book Story Wars, Jonah Sachs warns against a culture in which “consumption remains our highest value”. If we don’t change our values, he says, we will end up looking like the Negev, a desolate region of Israel containing the scattered ruins of several pre-Christian civilisations. This also is the implied conclusion of my favourite film, Baraka, which ends with scenes of several benighted human empires.

The line stuck with me. I think it represents a widespread view, that people being unreasonably materialistic are the problem and that, of course, “I’m” not one of them. The suspects are the SUV-driving, supersize-drinking, Walmart shoppers of the world.

That view is a distortion of reality.

We are all consumers: yes, even those of us who believe we are having a minimal impact.

Take a closer look at cars for example. For many years the eco-car of choice has been the Prius. While yes, it is more efficient than many other vehicles, it still relies on fossil fuels – plus it consumes more rare earth metals in its manufacture because it contains two engines: one gasoline-powered and one electric. Public transport is a little better but still not great, as it is ultimately powered (in my city) by coal-burning power stations. The emissions are merely hidden from sight.

Then let’s look at large retailers compared to, say, farmer’s markets. Believe it or not, because of their efficient distribution and need for fewer visits, supermarkets and their shoppers leave a smaller per-person carbon footprint than do farmer’s markets.

(I’m not going to defend bottled soda though – sorry Coca-Cola!)

My point is that this moralism isn’t helping; a person’s outlook does relatively little to alter impact on the planet and fellow human beings. Unless you are prepared to go the whole hog and travel everywhere on foot or by bicycle, make and then wash your clothes by hand, and go without a mobile phone or computer (really?) then ‘you’ and ‘they’ are in this together.

Moreover, how many people are really certified mindless consumers? Sure, now and then you might hear someone say “Yay, shopping!” but it’s pretty judgmental to extrapolate that their entire outlook is fixated on shopping. A short conversation would be enough to learn that such a person does indeed have higher priorities such as self-development and the quality of their relationships with family and friends. People don’t buy Coke because they want the chemicals, they buy it because they associate it with having a good time.

In his one throw-away line, Jonah Sachs did not say any of this. Quite the opposite: generally his book is directed at companies, imploring them to appeal to the best in people, so I suspect he would agree that we can’t rely on individual-level change to fix the problems we have created for ourselves. Even those who have seen the light are still contributing to it.

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Law School

Law School (Photo credit: Tulane Public Relations)

A little over a week ago, the Australian Council of Trade Unions released recommendations for unions to improve their internal governance, primarily in the area of finances. The panel was announced at last year’s tri-ennial Congress as a response to allegations of misuse of union funds at one particular union.

It should be noted that the people involved in this incident have since been charged with fraud so there is no deficiency of regulation. The recommendations propose tightening-up of internal procedures so that it is more difficult for this kind of conduct to take place unseen.

This got me thinking again about the difference between regulatory compliance and ethics.

All laws have the effect of categorising human behaviour as acceptable or unacceptable. The problem is, the real world does not lend itself to tidy distinctions, so laws become more complicated as they define exceptions and then define exceptions to exceptions. Moreover, this process doesn’t take place in a vacuum; as soon as you proscribe one form of misconduct, another will spring up in its place. You could call this the ‘Hydra Effect’.

It’s worth asking what effect, if any, does legislative redress have on people’s sense of right and wrong?

I don’t think there is a hard and fast answer to this but can see three interpretations:

  1. It sends the message that society disapproves of the conduct and thus the law has a normative effect. This may be true in some areas -notably criminal law- but it seems a little naive to believe that law and morality could be so closely correlated in an era when the laws of the state run to thousands of pages. I once attended a defensive driving course where there was a free-for-all discussion about what were the correct road rules in certain situations – everyone was just guessing! (We know what drivers really do when faced with such ambiguous situations: they don’t consult the rule book, they simply fall back on politeness and decide who will give way using hand signals)
  2. Legislation could in some situations have the perverse effect of lowering standards. Take financial regulation for example: most people involved with finances are behaving honestly at the outset. Then, in response to the actions of a few individuals, the law steps in to set a certain benchmark. That benchmark will most likely be lower than people’s personal standards, as it sets only a minimum standard of behaviour. The normative effect of the law makes them ask themselves, ‘Why should I bother? Here is a clear signal that I don’t need to take as much care as I have been’. How many times have you heard someone say, defensively “But we were acting within the law”? Mandatory CSR targets fall into this category, e.g. carbon emissions treaties and ‘Fair Trade’ standards (see earlier post).
  3. You could attempt to sidestep this dilemma by taking a position that law-makers oughtn’t be interested at all in whether or not the law has a normative effect on people, they should simply see it in an instrumental fashion designed to bring about a particular result – or, even more cynically, see it as a way of reacting to public opinion. You might call this the ‘checks and balances’ view. Immigration laws are an example. Stock exchange rules are another: their purpose is simply to avoid certain outcomes and the moral status of human actors involved becomes irrelevant. This view has its place (see post) but if you apply it universally, you will end up ascribing unrealistic levels of responsibility to Governments, as if their mere fiat alone is sufficient to determine what people do in the real world. Or, if you admit that they can’t, then you’d have to advocate allowing individuals completely to follow their own moral lights. That is basically an optimist’s vision of the law of the jungle.

This leaves us between a rock and a hard place. Yes, laws do carry a normative effect but you can’t rely on that alone.

There was a book by Jim Collins a few years back that advocated the use of “Stop Doing” lists. The idea is that more work will always find its way to you, creating the need for an ever-lengthening “To Do” list; so, to be able to stay on top of things you need to discipline yourself to make a list of what you need to stop doing to free up the necessary time.

Legislators and pressure groups, take heed: more law isn’t always the solution. It might help, but of itself it won’t be enough to bring about the intended change.

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