Portfolio Assignment on class exercises

Assignment for this weeks SSPM class: This course features class exercises to each meeting to let students experience the theoretical material from lectures and literature. Develop one class exercise to replace one that you felt was not entirely suitable.

Proposed class exercise: Analysis of a social network (possibly one’s own), using the Facebook reporter tool by Wolfram Alpha.

Goal of the exercise: Improve the students’  understanding of the structure of (social) networks by having them analyze their own social networks, making the concepts somewhat more relatable.

Description: One lecture in the SSPM series dealt with the concept of networks. During this lecture, centrality and power of specific players in networks was explained. Some examples were mentioned of social networks of the people in class, which gave a nice understanding of these concepts (for example, someone that is part of two social subgroups has more power than someone that is part of only one.)

Image 1: Friends’ genders

Image 2: Friends relationship status

A nice way to work this out a litter further might be to ask students to look at their own social network and do some analysis on it. A way to get a good overview of your own social network is to use the facebook analysis tool, available via Wolphram Alpha (see the link below).

This analysis tells you all there is to know from your facebook profile about your social network. It does not only inform you the amount, age and other statistics of friends (or for example gender- and relationship statistics, as in image 1 and 2), it even comes with a complete chart of all the inter-linkages of all your Facebook-connections, thereby dividing them into different groups that can be analysed on power and centrality of the different players, and lists for you the top-insiders, top-connectors and top-outsiders of your personal network.

The assignment attached could be to analyse the social network of one of the students, or even the teacher, or to try to apply the lecture material on it, maybe in a blog assignment afterwards. Another possible exercise is to use the Facebook report tool to make a network-map of the class and to try to identify the top social insiders and social connectors.

As an example, I included a network map of my own Facebook friends. The reporting tool would also show the names of the people in the network and list them for social insiders, social outsiders, social connectors, and social gateways, but for privacy reasons I chose to leave this out.

Image 3: My own social network.

When viewing image 3, one can draw several conclusions regarding my personal social network. For example, the different colors represent different clusters of friends: where the blue area in the middle represents friends from class (light blue) and other friends from Leiden/Delft (darker blue). The relative distances between the dots indicate the relatedness of the people represented by them, based on numbers of mutual friends, number of likes/comments, etc. This allows for identification of the social insiders and social connectors. For example: apparently there are some friends that know people in both my job-network (darker green) and my Leiden-network (blue), which means these people probably have more power than others in this specific network.

When done right, this exercise could contribute a lot to the understanding of the networking concept and at the same time be a nice input for a blog assignment.

Resources:

– http://www.wolframalpha.com/facebook/

Changes made after feedback: no feedback received.

The car game

This week’s assigment for the SSPM class:  In SSPM class the exercise was to create/come up with a game that could be played in a classroom setting and could help explain an aspect of evolution in a social setting.

Assignment: The assignment for this blogpost is to choose one of the games created in the SSPM class and improve it to possibly be played next week. The game I chose to improve is the game by group two, as described below:

The Car Game by group two:

Learning aim: Experience how selection determines development of symbiosis.

Rules:
– Total group divides into 5 categories: manufacturers, transporters, material mining co, retailers, etc.
– Individually people choose interests (energy eff, material eff, cheap production, etc.)
– Have interactions to establish same interests.
– Aim is to create coalition of five categories.
– Each round maximum two interactions.
– Intervention, individuals may choose different interests.
– Throw dice to have natural disaster or other external event.

My version of the game: 

Learning aim: Experience how selection affects development of symbiosis.

Rules:
The group is divided into different types of actors, all  these actors have their own specific interests and their own specific possibilities. In a classroom setting with five groups, the following actors would be present:

– Power plants: A powerplant delivers 1 unit of power, but needs 1 unit of materials, transport and waste/water treatment.
– Water and waste treatment facilities: A treatment facility treats 1 unit of waste, but needs 1 unit of power and transport.
– Manufacturers: A manufacturer creates 1 unit of the final product, needed to score points in the game, but is therefore dependent on all other actors (1 unit of each).
– Material supplier: A supplier supplies (one unit) to the Powerplant and the manufacturer, but needs one unit of transport.
– Transport company: A transport company transports pruducts and waste, but needs one unit of power per transportation.

The rounds:
– For five groups, four rounds are played in total, every round is the same and exists of two phases:

Phase one: formation of new groups.

– New groups are formed in this round, but the number of groups remains the same.

– The groups are allowed to recombine and exchange actors, in this way, the different groups diversify more and more.

Phase two: Every group gets a budget of one thousand euros, the goal of the round is to produce as much units of the end product as possible.

– Key is the fact that there are five markets (power, waste, transport, resource material and end product).

-The different actors (per market) have to come up with a collective table with the price for every different group for a unit of their specific product, through negotiation.

– These negotiations are held between the different actors per market, this simulates market functioning. The group that has the most actors for a specific market, has the most votes in the negotiations and therefore the biggest power in the specific market.

– At the end of the round the prices per unit of product are clear for every group. The different groups calculate the amount of end-product they can produce, considering their budget and the group-specific prices for the products.

– The units of end product created by every group are added up and the group with the lowest production is eliminated.

End of the game: 

– After four rounds, the most efficient group remains and wins the game.

Changes after feedback: Made the explanation of the rounds more step-wise.

‘Harvest’ game with improved rules.

Assignment: In the classroom, we played the game of harvest without allowing teams to communicate. The end result was that the resource system collapsed.
We now allow for communication among teams [this is the ONLY change in the set up!]. Think up a set of additional rules for the game that effectively ensures that teams collectively do not exceed the sustainable yield. Within the context of the game, teams may create new entities (a policing force, a common meeting, etc.); you CANNOT assume something like a government already exist; if you need it, the teams will have to create it by themselves

Rules of the original ‘harvest’ game:

– This game is based on ‘tragedy of the commons’, there are at least three teams of fishers and the aim is to have the largest profit at the end of the game by catching as many fish as possible.
– Each fish is one point, six to eight rounds are played, where each round represents one year.
– Every year, each team decides how many fish they want to catch. They write down this number and put it in their boat.
– The facilitator takes the boats and gives fish randomly to teams until they are all gone. the rest of teams then receive nothing.
– At the end of each round, you get back your boat and harvest. Write down your profit of each round.
– The sea starts with the maximum number of fish: 50. Each year, every remaining fish is able to produce one new fish, with a maximum of 50.

Rules of ‘harvest 2: The self-sustaining system’ expansion pack.

– Goal of the game: The goal of the game in ‘harvest 2: the self-sustaining system’ is not to catch as many fish as possible, but to play at least 10 rounds with the biggest yield possible. After 10 rounds, the individual harvests of the different teams are compared and the team with the biggest profit wins.

– The tragedy of the commons: If a tragedy occurs (this means no more fish are in the sea any more at the end of a round) the game ends, if less than 10 rounds have been played at this moment, none of the teams wins the game.

– The Fishery union sustainability committee: At the start of each round, starting at round two, a committee is chosen based upon the results of the round before ( this is to simulate self-organization) the committee consists of the team with the highest score in the previous round. The committee has the task to make sure no overfishing occurs and is therefore allowed to sanction any team fishing at least 20% more than the other teams with the penalty of losing all the profit gained that round, the committee is then to decide whether they keep the fish or return it into the sea.

– After counting the yields of the year, the committee resigns and a new committee is chosen, the fish reproduce (every fish produces a new fish, with a maximum of 50), and the next round begins.

Changes after feedback: Explained why the comittee changes per round (to simulate self organization) and made some improvements in clarity.

Analysis of a Regional network of production: The Kalundborg Eco industrial park.

Image 1: The Kalundborg eco-industrial park.

Image 2: connections in the Kalundborg EIP, the numbers correspond with image 1.

Industrial ecology is the study of sustainability, with some of the most important aspects being the closing of loops and the coordination and cooperation needed to do this. From this perspective, the Kalundborg eco-industrial park is one of the flagship examples of what an industrial ecologist dreams about: a complex production network with an ever growing number of closed loops inside (see image 1 and 2). You might say that when you name it, they reuse it.

The network:
There are four types of networks described by Burt:

1. The tightly coupled network, in which many/all actors are interlinked.
2. Cliques: Small, dense and non-hierarchical networks, but separate and without interlinkage.
3. Centrality: A hierarchical network with one central, powerful player and multiple less central, less powerful players.
4. Network that bridges a structural hole: Could be regarded a network of cliques, but then with some links between them.

Looking at the Kalundborg network’s properties (many interlinkages, no actors that are significantly more central than others) we may conclude that we are dealing with a tightly coupled network here. When we also take the ‘non-local’ actors into account, which in this case are the buyers/consumers of the product, the suppliers and the municipality of Kalundbourg (of which the houses are heated with rest heat from the factories). We may consider the network to even be two cliques (the park with suppliers and buyers and the municipality) with the structural hole being bridged by the management of waste and the delivery of heat.

According to their website, the Kalundborg EIP consists of a network of both private and public actors, where the government is present to formulate rules if needed, but many of the arrangements and monitoring is done by the park itself, therefore we may regard this park as private interest governed. 

Resource dependency:
Resource dependency is a major issue in any EIP, including Kalundorg.  Because so many companies are interlinked and dependent on each other for providing each others resources and treating each others waste, when one or two of the companies start to cause trouble, there is a problem for all of them. This dependency is often asymmetric and prevented by a management system: There is a set of rules and a governing/regulating body in the Kalundborg park to prevent problems and make the resource dependency less of an issue. The most important non-local actor, the municipality of Kalundborg, is also dependent on the park for heating the houses, this asymmetric dependency. This dependency is reduced with a backup system, in case of failure the houses can also be warmed using regular power plants or natural gas.

Resource networks:
Almost any of the types of resource networks occur in the Kalundbourg EIP, randing from  material/energy exchange (including steam, electricity, sugars, etc.), knowledge production/sharing (including the risk for spillovers and the networkedness of the knowledge) and rule construction (needed for proper cooperation and trus) to value creation (with legitimacy as a critical resource).

Regional networks:
Three types of regional network structures can be distinguished (Gordon and McCann):

– The agglomeration, with firms colocating because of the positive externalities of clustering.
– The industrial complex, in which one cental firm decides and stimulates suppliers and customers to colocate.
– The social network: Managers develop social capital through increased interaction with proximate firms.

In the Kalundborg EIP we can find each of them, because the positive externalities of colocation (supporting service, infrastructure, etc.) are important to any company, but in this specific case the companies are also each others suppliers and customers, which forces them to stay close together to minimize transport cost. Also, the social network is important in Kalundborg, there is a myth about it that says the whole Kalundborg EIP started one day in a bar, with some participants that decided to start cooperating. Also, social capital is important in a situation where this much trust is required, therefore a social network is required to make an EIP like this work.

Enablings and constraints to working toward the closing of loops:
This network clearly enables actors to work toward the closing of loops, for all actors in the network have the goal to recycle and reuse as much as possible. This EIP network enables actors to find each other and research possible exchange of producs, energy and knowledge.

Sources:

– Burt, R. 2000. The network structure of social capital, Research in Organizational
Behaviour 22: 345-423.

– Gordon, I. and McCann, P. 2000. Industrial Clusters: Complexes, Agglomeration
and/or Social Networks, Urban Studies 37(3): 513–532.

– Boons, F.A. 2008. Self-Organization and Sustainability: The Emergence of a
Regional Industrial Ecology, Emergence: Complexity and Organization 10(2).

Changes after feedback: no feedback received.

A decent factory

Corporate social responsiblity, although not always profitable, is an important theme in the management of almost any type of business. One of the reasons for this is the fact that, although efford in CRS does not always pay off in the form of profit, it usually does in the form of legitimacy. In other words, in our modern western society we have begun to value CSR so much that a company, in order to accepted and valued by society, has not much of a choice but to invest in CSR.

Nokia, a company some of us may remember as the company that turned out not to be quite as unbreakable as the phones it made, was one of the first companies to acknowledge the value of corporate social responsibility and implicate it in its policies and procedures. Environmental impact of the production process of the phones and the working circumstances of its employees, for example, are two topics in which a lot of efford, time and money was invested by the company.

In a documentary called ‘A decent factory’ a Nokia employee is followed when inspecting a Chinese manufacturing plant of charger cables on working circumstances. The findings done are shocking, for example, employees work for very long shifts (up to 12 hours), are underpayed, insufficiently protected in hazardous working circumstances and treated very badly by supervisors. The response on this by Nokia is clear: in order to keep the cooperation between the supplier and the company healthy, changes must be made and and working circumstances must me improved.

Legitimacy, sustainability and coercive isomorphism.

The strategy Nokia applies here is called ‘coercive isomorphism’, which means it tries to reach a specific reformation in its field by pressurising suppliers upstream, forcing them to value the same things Nokia values (in this case proper working circumstances) and thereby, as a company, becoming more benefiting from these changes as well. Legitimacy is key here, because for a western company like Nokia, this is an incredibly important resource for its business case to keep existing.

The question that arises is, how does Nokia strive for legitimacy in this specific case of coercive isomorphism?

The answer to this question is not simple, but something that can be said is that freedom and equality are two topics valued strongly in western society. This may be the reason that a company cannot afford to sell products that are produced in a way that it harms the freedom and equality of employees without severely threatening its legitimacy and thereby its business case, for if information like this becomes known by a broader audience, it may have severe consequences for the profit made by the company. In other words: because in our society we value freedom and equality a lot, companies that take this into account in their business models are rewarded with a gread deal of legitimacy and therefore profit. From this point of view the behaviour of Nokia can be well understood, for low payment, very long shifts and bad employee treatment can be regarded as forms of inequality and lack of freedom and thereby lead to a loss of legitimacy for Nokia.

A second question is that, if legitimacy is so important for a company, why doesn’t the supplier seem to care about it?

A possible answer to this question may lay in the fact that values in the west, where Nokia needs its legitimacy, are are very different to values in China, where legitimacy is needed for the supplier company. In an interview with one of the board members of the supplier company, he argued that working circumstances in that particular factory were way better than in any factory nearby, and that, although women are not treated well there, they are treated better then they would have been without the existence of the plant. In one specific case he even mentioned that the fact that women are not allowed to become pregnant more than once in the time they are employed, was a form of birh control that benefited the society and was therefore gaining the factory some form of legitimacy. From this perspective we could argue that also the supplier company was striving for legitimacy, but in a completely different way because the values and beliefs in the society where the supplier is located differ strongly from the values and beliefs in the society where Nokia is located.

Effectivity of this coercive isomorphism in diffusing sustainability.

An important question to be adressed is whether this coercive isomorphism is an effective tool in diffusing values of sustainability futher into the world.

On the one hand, we could argue that it is, for apparently a company like Nokia has the power to force a supplier to behave sustainably and thereby it has bettered the lives of many thousands of employees in that specific factory alone. On the other hand we may argue it is not, for the only reason the supplier is taking values of sustainability into account is because they are forced to do so by Nokia. (In other words: if we were to regard the factory as an ecosystem, it would be better to have employees self organize into becoming more sustainable than to govern it into sustainability from above, but I will get back to this in the last paragraph.)

Furthermore we could argue that the reason these circumstances are so poor, is that the supplier is forced to produce its products as cheap as possible, which is a requirement made by Nokia in the first place. Therefore, a better approach could be to pay the supplier a higher price and thereby enable it to improve labour circumstances, instead of forcing cheap production on the one hand, but forcing (more expensive) employee-friendly production in the other, thereby forcing the supplier to save money on other aspects, such as, for example, pollution prevention.

How could another coordination mechanism improve on this?

Having said all the above one last question emerges, which is what can be done to improve with the knowledge we have now. I think several improvements can be made.

First of all, as mentioned above, I think it is not possible to force suppliers to produce sustainable, while stille forcing them to produce very cheaply. For the only way to produce as cheap as is done now, is to externalise as much of the cost as possible, for example by underpaying employees and using production methods that are cheap but also polluting. I think a company like Nokia should be very well aware of this, because when the price is kept down and one  way of externalisation of cost is eliminated (such as underpayment), other externalisations (for example environmental) have the risk to increase.

Secondly I think it is important to research the values and beliefs of a specific society thoroughly before introducing measurements, for a risk of introducting measurements upstream that are valued a lot in one society, is that values and beliefs in another society are very different, which may affect the result of the measures as well. In this way a situation is imaginable where the society of the producing company does not benefit at all from the changes implemented and the only benefit gained is a gain of legitimacy for the company downstream (in this case Nokia), which could even be regarded a way of exploitation itself.

What other coordination mechanism could improve on this and how?

According to Boons (2008) There are four different coordination mechanisms, which are:

– Self organisation (organization without any external interference).
– Self governance (self organisation, but with own sanctions and monitoring).
– Private interest government (self organisation under governmental pressure).
– Government (organisation is controlled by an external actor).

Taking the problems mentioned above into account, I think self governance (which is self organisation, possibly with boundary conditions from a government and with own sanctioning and monitoring, but also with the possibility for the governing body to set rules) is the best coordination mechanism to improve on this, because:

– This is a good way to deal with cultural differences, for the company will self-organize in a way that fits into the culture in which it is located, thereby gaining in legetimacy, but Nokia still has the advantage of being able to set boundary conditions and rules, thereby keeping the power to enforce sustainability.

– If we were to regard this factory as an ecosystem, Andersson & Ostrom (2008) would tell us that self-organization has the benefits of local knowledge, lower costs of monitoring and rapid feedback from the system itself.

– In this way, the organisation will happen in a way that it does not only benefit the bigger companies that buy the products (window dressing), but that it is also in the interest of the local community.

A conclusion 

In conclusion we might say that the technique used by Nokia to diffuse sustainability, although effective, should be used carefully. The reason for this is the fact that possibly the most important reason for Nokia to use this technique is to gain legitimacy, which is an advantage for Nokia, but not for sustainability diffusion, and that therefore there is a risk that a situation may evolve in which sustainability is only done for legitimacy gain (window dressing), and that the actual problem (for example bad labour circumstances or pollution) is not solved efficiently.

Sources:

Boons, F., 2008. Self-organization and sustainability: The Emergence of a Regional Industrial Ecology. E:CO, 10(2), pp. 41-48

Andersson, K. and Ostrom, E. (2008). Analyzing decentralized resource regimes
from a polycentric perspective, Policy Sciences 41: 71-93.

Documentary: ‘A decent Factory’. (http://www.gemistvoornmt.nl/a.aspx/2730772/0) (15/10/2014)

Changes made after feedback: Explained my choice for a specific coordination mechanism more thoroughly.

Comments on the blogs of co-students

Blog post: http://iektkj.wordpress.com/2014/09/17/an-industrial-ecology-inspired-puzzle/
Comment date: 1 oct. 2014

Dear Kimberley,

I really enjoyed reading your blog and I have some small recommendations, which I will list you via this reaction.

On the IE-puzzle:

– In my opinion examples are awesome, more is is almost always better.
– A quote from Fightclub (an movie with Brad Pitt): Explaining something to people is best done in three steps: Tell them what you are going to tell them, then tell them, then tell them what you just told them.
– I like your introduction, since it makes clear what the problem is about really well, a small comment is that the introduction is just as long as the rest of the post at the moment, so maybe it is an idea to explain your arguments with a little more words, with more examples, for example:)
– On your first argument: What I understood you mean is that a reason for the rebound effect is materialism, but I am not sure if I am really convinced of that, for if our materialistic way of life is a reason for the rebound effect to occur, does this mean it will not occur in some of the less wealthy parts of the world? I think an improvement in fuel efficiency of a car will lead to more car use there just as well, because driving is then cheaper and therefore more accessible.
– On your second argument: I think this is a great explanation of what you wrote the rebound effect itself is about in the introduction, rather than a reason for it to occur. (http://nl.wikipedia.org/wiki/Rebound-effect_(economie)), but maybe I am missing your point here, in which case I advise a more extensive explanation.
– On your third argument: I really like this argument, I think I would like it even more when supported by a small example. For example, people should not only drive a prius, but should also be encouraged/rewarded to use the bike on short distances, thereby preventing more car use than before.

On the Friedmann proposition:

I think this is a great explanation of your ex ante position on the Friedmann proposition, I agree with the line of argumentation that Friedmann was right, but the only way to be successful on the long term is to look at all stakeholders, instead of focussing on just the shareholders.

I think you would do good bringing a little more structure to the text, for example by dividing the core part in two alineas (so the complete text will exist of three parts, which creates a nice balance) and concluding with a one sentence summary of what you wrote (”tell them what you told them.” ) I really like the way you end the text with the adapted quote!

I really hope my comments will be of use to you, please keep in mind that this is just my humble opinion:)

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Blog commented: https://sspmblog.wordpress.com/
Comment date: 8/10/2014

Hi!

First of all, I like your stile of writing, it is clear and easy to read.

On your introduction:

– Although I think you have a good correlation for this blog (energy use over time not  decreasing), I think it is a good idea to state it a little more explicit, maybe even with a graph.

– I do not completely agree with your statement that we are running out of gas and oil and that finding new sources is not an option. Usually companies that extract resources stop looking for new sources as long as they have enough resources for the next few years and start searching again when they are in need of sources. Therefore I think new sources will be found as soon as we need them and we will not run out of oil an gas for a long time, but of course this discussion is very complicated.

– I would challenge your statement that the cost of renewable energy will outweigh the benefit and make energy only more expensive.

On your argumentation:

Argument 1:

– I agree with this argument, indeed I think there is a lot of inefficiency in houses. On the other hand I think your explanation of this argument is a little brief.

Argument 2:

– Again, I agree with what you write here, but I think you could go a little further, for if there is so much to gain here, why has it not been done yet?

Argument 3:

– It may be true that company buildings are inefficient, but why are they? According to Friedman I would say that efficient lighting and heating in a building would result in less expenses and greater profit and therefore companies are likely to invest in it.

Overall I agree with your argumentation and l like your style of writing a lot, but maybe you could elaborate your argumentation a little.

I hope my comments will be of use to you!

Speaking of Friedman: I could not find your blogpost on the ex ante position on Friedman, I’m sorry, maybe it is not accessible yet?

kind regards,

Hans Peter

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Blog commented: http://michaeloconnorindustrialecology.blogspot.nl/2014/09/blog-post.html?showComment=1412783891110#c6083221042365831514

Date of comment: 08/10/2014

Dear Michael,

Although I agree with what you have written so far, I assume this is only your introduction and you will introduce your newsitem later. Therefore I cannot comment much right now (08/10/2014).

kind regards,

Hans Peter

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Blog commented: http://iezejun.wordpress.com/2014/10/01/week-2-a-decision-making-analysis-over-a-news-piece/comment-page-1/#comment-3

Comment date: 8/10/2014

Dear Zejun,

I enjoyed reading your blog, and although I agree on your global argumentation, I have some small remarks.

– The text is not so easy to read, it might be a good idea to add some more structure, use shorter sentences and summarize briefly at the end of the blog.
– I think It is very good that you start by explaining the definition of rationality and then apply it to the case, and stick to this structure in the second part.
– I think your definition of rationality should also include the term profit, for a decision that maximizes profit is optimal for a company.
– I think the length of your blog is just right, not too long and not too short.
– I think your definition of Bounded rationality should also include terms like uncertainty, adaptation and trade offs, for you explain these terms in your definition, but mentioning them will make it more clear.

I hope my comments will be helpful to you, please remember that this is just my opinion:)

kind regards,

Hans Peter

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Blog commented: http://iezejun.wordpress.com/2014/10/01/week-2-b-my-position-on-friedman-proposition-now-a-reconsideration/comment-page-1/#comment-4

Date of comment: 08/10/2014

Dear Zejun,

I liked your blog and I have some comments as well,

– I like how you mention the three angles in the last part, but I think it would be good to put them into three different paragraphs and work them out a little more, maybe with examples, for this would improve the structure of the text as a whole.

– I think that, at the end of the blog, you should include a small summary that states your current position concerning the Friedman article very briefly, this will make the blog easier to read and understand.

I hope my comments can be of help,

Kind regards,

Hans Peter

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Blog commented: http://sairamiroslava.wordpress.com/2014/10/11/mangroves-a-way-of-life/comment-page-1/#comment-4

Comment date: 15/10/2014

Dear Sayra,

This week it is my turn to comment on your blog, and first of all I want to say that I think your style of writing is very clear and easy to read, also the length of your blog, in my opinion, is quite optimal.

Also, here are some small remarks with wich I hope to be of help to you in improving your blog.

On the Mangrove part:
I like the fact that you explain the Ostrom model extensively before applying it to the case, and that you explain the shrimping and the mangrove system as an introduction. On the other hand I think the actual analysis (the image you provided) is a little brief when compared to the introduction. Also I had some trouble understanding how you come to the conclusions summarised in this immage, and when combining these two remarks I come to the conclusion that I think you would do good explaining this image a little more.

On the Friedman part:

Again: I really like your style of writing, But maybe explain some of your underlying reasoning as well. For example, if I understood you well, you do the assumption that ‘profit’ and ‘sustainability’ are the same here, because being sustainable will earn profit on the long term. I would challenge this assumption, for short term profit (just produce and sell as much shrimp as possible) is a form of profit as well, and maybe the conseqences of this short term profit generation will not affect the current users directly, meaning that short-term profit is acutally the only profit gained and sustainable management of the region will not result in maximum profit.

I hope my comments are of help to you:)

kind regards,

Hans Peter

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Blog commented: http://socialscienceforindustrialecology.wordpress.com/2014/10/08/water-privatisation-can-we-self-organise-the-valuable-natural-resource-of-water/#respond

comment date: 15/10/2014

Hey Nicole,

My turn to comment on your blog this week!

First of all: I like the fact that you have so much data supporting your statements in the first part, for the second part I think it would be a good thing if you mention or find some more sources to support your story.
Second: Your system boundaries are very clear, which is a good thing. I think stating these in the very first paragraph as well would give the reader an even better insight in what your text is about, making it easier to understand.
Third: You have worked out some of the second-level variables and skipped some others, which I think is not a problem, but maybe it is a good thing to shortly motivate why you chose exactly these as the most important ones.
A last small point: You mention that water is a very mobile resource unit, for me this was sort of a confusing statement, for altough the water itself moves, the larger bodies of water, such as seas, rivers and lakes, usually stay in the same place. In other words, although water is mobile, you do not have to chase it if you want to harvest it, which is different from other mobile resources, such as herds of animals or schools of fish.

Overall I think this blogpost is well-written and I liked to read it, I hope my comments will be of use to you!

kind regards,

Hans Peter

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Blog commented: http://suchasocialsystem.wordpress.com/

Comment date: 19/11/2014

Dear Francesca,

I think you did this blog really well, it shows the research you did and explains the different mechanisms clearly. Concerning the structure of the blog, I would recommend you to state the purpose of this blog or the portfolio question, combined with a brief summary of the video as an introduction. Also it would be good to have a small summarizing statement at the end.

Concerning the blog itself, I think the argument you make is clear, but maybe take some time to elaborate more and explain some more of the assumptions you do, this would make your blog easier to read and understand.

Also: Maybe include whether these mechanisms used by NOKIA are successful or not, and what coordination mechanism could improve on this.

Kind regards,

Hans Peter

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Blog commented: http://dicapojura.blogspot.nl/2014/10/nokia-is-strivingfor-legitimacy-by.html#comment-form

Comment date: 19/11/2014

Dear Diana Carolina,

– I think what you have written now serves as a good outline for a final product. This is because I think you did the argumentation very well, it just needs a little more elaboration.
– I agree with what you wrote, but maybe a hint: Look at Powell and DiMaggio (1983) for some mechanisms, I think this could be a valuable addition to your writings.

Kind regards,

Hans Peter Honkoop

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Blog commented: http://dvssspm.blogspot.nl/2014/11/sodexo-and-tu-delft-in-tight-network.html#comment-form

Comment date: 19/11/2014

Dear Daniel,

Nice blogpost, nice argumentation, nice writing, I liked it!

On the con side: maybe your introduction about your own lunch could contain a little more information about Sodexo itself, for it is hard to understand the company from this blog when you don’t know it. Furthermore, maybe close your post with a little summarizing statement, this would be nice for the harmony within the text.

Overall I think you have explained quite a tough topic very clearly.

Kind regards,

Hans Peter

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Blog commented: http://thesocialsideofie.blogspot.nl/

Comment date: 19/11/2014

– No blog entry done.

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Blog commented: http://michelangelonina.wordpress.com/

Comment date: 19/11/2014

– No blog entry done.

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Blog commented: http://josefinerook.blogspot.nl/

Comment date: 19/11/2014

Dear Josefine,

I think your writingstyle is very clear and this post has a good structure. You use clear referencing and you explain your statements well, but I think one major element is missing from this blog: a clear explanation of the new rules proposed. I think you need to add one more paragraph, just bullet-pointing all the rules of the new game and your blogpost will be way more complete.

kind regards,

Hans Peter

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Blog commented: iematters.weblog.leidenuniv.bl

Comment date: 19/11/2014

– Could not open blog.

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Blog commented: http://ilonkamarselis.blogspot.nl/

Comment date: 19/11/2014

Dear Ilonka,

I think your blog has a good structure and is easy to read, your argumentation and implementation of Sabatier’s framework are clear. Maybe you could improve the structure of the blog a little by introducing headers for the different alineas. Also I think some of the explanations are a little too elaborate, making it harder to understand.

Overall I think this blogpost is very well written.

Kind regards,

Hans Peter

A social ecological system, analysed using ostrom’s framework: Fishery in the North Sea Region.

Fisheries in the North sea

For this blog, the assignment is to choose a social ecological system in which private firms play an important role, but of which I am an active part myself as well, and analyse it with the framework provided by Ostrom. I will choose the social ecological system in which fish stocks in the North Sea Region, governed by the European Union but exploited by private firms, provide fish for consumers in the North Sea region (Norway, Sweden, Denmark, Germany, The Netherlands, The Flemish region of Belgium and the United Kingdom.) and other parts of the world via trade and transport. My own active role in this social ecological system consists of the fact that I consume fish every now and then, examples of private firms in this system are fishing firms, and firms specialised in the trade and transport of fish from the north sea.

Analysis with Ostrom’s framework

The framework made by Elinor Ostrom that will be used to analyse the north sea system can best be described as a two-level outline, applicable to any SES, containing core subsystems on the first level (figure 1) and underlying variables on the second level, that describe important factors in the SES. I will go through the core subsystems one by one, analysing these subsystems by adressing the underlying variables I think are the most important for every specific subsystem.

Social, economic, and political settings 

The North Sea region is an economically stable region with slow growth, many of the countries depend on trade with each other and countries outside of the NSR, the region is politically stable and the North sea fish stock is regulated internationally by the European Union by the North Sea  Commission and international cooperations like the North Sea Region program.

Resource systems

The sector I target in this blog is the one concerning fisheries, North Sea fisheries account for over 5% of international commercial fish caught. Fishery activity especially takes place in the southern part of the coastal waters. Economically important species of fish caught in the North sea are shellfish, herring, cod, and plaice. The boundaries of the system are clearly defined by the North sea region and the North sea itself has a size of about 750.000 square kilometers.

Governance systems 

The North Sea Region is Governed by the European union via the North Sea Commission and programmes lik the north sea region programme, in which many arrangements are made about the fisheries in the North Sea. Countries and Fishery firms are required to inform the governing commissions about the quantities of fish caught and can be sanctioned for overfishing. There are specific instances concerned with monitoring.

Resource units

Economically important species of fish caught in the North sea are shellfish, herring, cod, and plaice. These fish species are mobile, but are restricted to certain habitats, the replacement rate of the different fish species has been researched and the fishing quota are adapted to these replacements rates. The economic value of these fish species is big, economies in the North Sea Region depend on it for a large part, in figure 2 the quantities of fish caught by different counties has been summarised. The fisheries especially take place in the southern coastal region of the North sea.

Fish caught in the North Sea in metric tons
Country	1950	1960	1970	1980	1990	1996	2002
Denmark	96,494	284,527	528,127	1,806,191	1,328,251	1,284,365	1,249,656
Norway	296,337	323,381	480,819	498,777	617,741	618,669	691,062
United Kingdom	308,895	343,002	410,775	389,417	343,205	355,385	295,367
Germany	233,481	305,776	284,685	90,217	108,990	63,647	69,836
Netherlands	64,438	92,119	121,524	213,365	256,597	140,765	146,835
Soviet Union / Russia	89,269	352,857	429,182	7,181	1	0	0
France	79,751	149,769	202,948	100,861	64,860	35,262	55,379
Sweden	43,680	71,899	124,790	86,465	116,695	72,863	131,991
Faroe Islands	38,630	17,111	63,725	71,540	23,292	27,572	0
Iceland	0	50,065	21,111	523	0	8	4,668
Belgium	28,036	30,094	26,547	32,065	26,889	18,880	14,657
Total	1,286,230	2,120,137	2,807,950	3,306,127	2,893,422	2,643,719	2,687,299

Users 

The users in this SES ar concentrated in the North Sea Region for some part (both companies and consumers), but also a large part of the consumers lives elsewhere in the world and is reached through trade and transport. Exact numbers of users are hard to find, but considering the amount of fish caught in the North Sea every year, it is safe to say that several millions of consumers make use of the fish caught in this region. The fishing technique that is most commonly used is trawling, and as the numbers indicate, this resource is very important for this region.

Interactions 

The interaction between the different user countries is mainly organised via the EU regulations made. Due to these regulations, much information is shared and conflicts are avoided. In figure 2, the different harvesting levels of the countries that fish in the North sea can be found. Many lobbying activities (on a national or international level) take place, organised by the different fishing firms and associations.

Outcomes

Social performance measures such as sustaiability, efficiency, equity and accountability are valued much by the North sea commission and in the various cooperation programmes. The Application of these values in practice however is hard and hard to control. Overal there is a positive trend in most of these performance measures.

Ecological performance measures have been underestimated in the past, a consequence of this is, for example, the overharvesting of mackerel in the North sea. Much has been learned from these mistakes and the north sea is monitored in an attempt to keep the ecosystem healthy and diverse.

Related ecosystems 

The north sea is connected to both the North Atlantic and the Norwegian sea, therefore there are many important inflows and outflows of resource units and polluting agents. The north sea ecosystem is part of a bigger ecosystem, so influences on climate and by pollution on the north sea also affect the ecosystems that are related to it.

Likelihood of self-organization

Ostrom mentions several reasons why self-organization, or the collective effort of actors to prevent a tragedy of the commons, might/might not occur, which I will go through now:

– The probability of self-organizing users is higher when the expected benefits of managing a resource exceed the perceived costs of investing in better rules and norms.

– According to Ostrom, these second-level variables are especially important:

Size of the resource system: Large resource systems have high costs of boundary defining and fencing, monitoring and gaining of knowledge. Small resource systems may have insignificant flows of products. The best is a moderate size resource system.

A socio-ecological system may occur in any shape or size. but the North Sea Region, being surrounded by multiple countries and being about 750.000 square kilometers wide, can be regarded a large socio-ecological system.

Productivity of the system: Coliniar effect on self-organization across all sectors, for self-organization to occur it should not be too high and not be too low.

The North Sea region, according to a research by the European environment agency (Mats Walday and Tone Kroglund, year unknown), the North Sea Region is a very productive ecosystem.

Predictability of the system dynamics: Should be sufficient for users to make estimates.

The North Sea Region has been studied well, we know a lot about its dynamics and biodiversity, therefore its system dynamics are well predictable.

Resource unit mobility: mobile units bring bigger observing/monitoring costs, therefore there is a lower chance for self-organization.  

The Resource units, the fish in the north sea, are, for the bigger part, migratory and therefore not fixed but very mobile.

Leadership: Respected local leaders and entrepreneurial skills bring higher self-organization chances.

In the North Sea Region, there is a good system of governance with local leaders present, even in smaller communities.

Norms/social capital: Shared moral and ethical standards bring lower transaction costs.

When the Social-ecological system of the North Sea Region is concerned, the social capital/shared norms seem to be quite present, for the different countries have a common religious background and are all part of the european union.

SES knowledge: More knowledge means lower cost of self-organization.

The NSR has been researched very well in the past for fishery, therefore the knowledge of the region is extensive.

Importance to users: More importance means more involvement, resulting in a higher chance of self-organization.

The region is a big source of income for many of the countries that are part of it, therefore the importance to the users can be regarded extensive as well.

Collective choice rules: Transacton costs lower with more autonomy for rule-making.

Although almost all part of the EU, the different countries are autonomous when it comes to making rules, for they all have their own governments and legislative bodies.

Given the fact that the North Sea region is a large socio-ecological system (-) , and very productive (-), It is well understood (+) and therefore predictable (-), the resource units are mobile (-), the SES is important to its users (+), leadership is present (+), and there is a lot of social capital (+), the cost of self organization is seems so to be very high, increasing the chance the expected benefits exceed the perceived costs, reducing the chance self-organization would occur.

Sources:

– http://www.northsearegion.eu/ivb/countries/

– http://en.wikipedia.org/wiki/North_Sea_Region

– http://www.northsearegion.eu/files/2014_Public_Consultation/NSRP_SEA_Report.pdf

– Walday, M and Kroglund, T. (Year unknown). The North Sea, European environmental agency.

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

Argument on how the principle advocated by Friedman might be put to constructive use in the sustainable management in this SES. 

Friedman argues that the only business of business is to make profit and whether you agree to this or not, a phenomenon we see in the major part of business today is that firms will do anything needed to make profit. But how can this obserbation be put to use in the sustainable management of the North Sea Region Social ecological system?

Reward and punishment

If the only variable most firms look at is profit, then this is the way to communicate with them. Therefore a way to use Friedman’s principle in sustainable management of the North sea region is to reward sustainable and responsible behaviour (keeping to fishinq quota, using safe fishing techniques, etc.) with additional profit. This way, if Friedman was right and the reward is bigger than the advantages gained from fishing unresponsible, firms will behave more sustainable. On the other hand, punishment of unsustainable and unresponsible corporate behaviour will make this effect even stronger.

Find more sustainable techniques that are profitable as well.

According to friedman’s principle, it does not matter how the profit is made, as long as it is made. This means that if there happens to be a sustainable way of fish production that is more profitable than the traditional way, it will be adopted by firms over time. Therefore, according to Friedman, research into the profitability of new sustainable ways of fish production is very important.

Encouragement and rewarding of self-arragement

If it is not feasible to monitor all fisheries in the North Sea Region, then rewarding cooperation between the different users might be an alternative. Examples can be provided of social ecological systems in which stakeholders have united in order to prevent a tragedy of the commons. If such an approach is rewarded with extra profit in the North Sea Region, it will, according to Friedman’s principle, shift the view of companies from short term profit to long term sustainable business.

Sources:

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

Changes after feedback: SES: Included the last paragraph about the likelihood of self organization according to Ostrom.  Friedman: no changes recommended in feedback.

Developed opinion on the Friedman position

A change of position

In my previous blog I took an ex ante position on the statement that ‘The only responsibility of business is to increase its profits.’ by Milton Friedman. This week I will comment on my change of perspective caused by the materials provided, including the Friedman article on the business of business and the ‘Not business as usual’ documentary. In short my opinion in the first blog was that the business of business was not only to increase its profits, but that a business or corporation, being in a suitable position to take social responsibilities effectively, is partly responsible for the consequences if these responsibilities are not taken. Therefore the business of business is not only to increase its profits, but also to take social responsibility.

An agreement with Milton Friedman

In the article in which Milton Friedman states his famous quote of ‘The only responsibility of business is to increase its profits.’, he names two main arguments to support his statement, which are the responsibility of a corporate executive to the shareholders and the fact that humans have responsibility, not companies.

The task of the corporate executive is to conduct business in the way mostly desired by shareholders, which is usually to make as much profit as possible.This excludes special cases, such as schools and hospitals, of course, but I will not regard these in this blog for these special cases are usually financially supported by the government, which most other corporations are not. Friedman argues that using corporate resources for purposes other than making profit would actually be comparable to taxing shareholders in the name of social responsibility, which in fact is a government function, not one to be executed by a corporate executive.

An other, important quote from the Friedman article is that ‘Humans have responsibility, not corporations’. I think Friedman is right in stating this, a business or corporation is in essence nothing but a societal construct with te purpose of making profit. Of course a similar construct is imaginable in which profit is not the only purpose, but also social responsibility is, this however would not be a business as we define it nowadays.

Combining these arguments gets me to conclude that, indeed, the only business of business is to generate profit. There are two remarks I need to make, for first of all this does not mean that social responsibility cannot be part of a stragegy to make profit, in fact, examples can be given of companies that perform better than usual by caring for all stakeholders, not only shareholders. The second remark to be made is that just the fact that a business that has other interests than just generating profit would not be called a business by Milton Friedman (And I think he is right in doing so), does not mean a construct that combines profit and social responsibility (for example a B-corporation) is not feasible, desirable or possible, it is just included in the definition of business as Friedman decribes it.

An application to the current situation:

This is what leads me to the actual statement I want to make: I think Milton Friedman was right, but this does not mean social responsibility cannot have an important place in business as we know it, which I will support in two main arguments.

First of all, I think that social responsibility will be a more and more important part of profit generation in the years to come, not only because corporations have to be more and more transparent nowadays, which is a result of social media becoming a very important means of communication between companies and consumers, but also because ‘whatever you do not pay for at the start, you will pay for in the end’, which means that everything comes with a cost and if you ignore this cost it will cause you trouble in the end. An example of this is the distaster in the clothing factory in bangladesh in 2013, for which western corporations such as walmart and Calvin Klein were held responsible, I think it is safe to say that this event was not in the favour of the shareholders of these corporations.

Second, a new trend in the business world is the B-corp, which is an abbreviation of Benefit-corportation. The standards a company has to meet in order to be a B-corp are very high and very diverse, but the main theme is that a B-corp will look at all stakeholders, not only shareholders, and is legally protected to do so. The fact that these corporations exist (270 B-corps across 27 countries and 60 different industries, according to the ‘not business as usual’ documentary)  proves that combining profit generation and social responsibility is absolutely possible.

A concluding statement:

Although, because of materials provided, I was led to think Milton Friedman made a valid statement about the business of business being to generate profit, I have to make the remark that this statement has to be explained in the right way, first of all commenting that social responsibility can in many cases be in the direct interest of shareholders, but also stating that the fact that a corporation taking social responsibilities might not be called a business according to the Friedman definition does not mean this type of company is not feasible, desirable of possible.

Sources:

– Documentary ‘Not business as usual’ (https://www.youtube.com/watch?v=p_TCDS-V6Aw)
– Friedman, M. 1970. The Social Responsibility of Business is to Increase its
Profits, The New York Times Magazine, September 13, 1970
– http://en.wikipedia.org/wiki/2013_Savar_building_collapse#Fashion_industry_response

Changes after feedback: Small clarifications.

The KPN policy on hiring women

On the rationality or the bounded rationality of the telecommunicational firm KPN when making decisions in whether to favour women when hiring for directional functions or not.

In 2009, KPN decided to adopt a special strategy in their efford to compose a management team for the company: they adopted the goal that, in a few years time, at least 30% of the top layer of employees should be female. In 2014 however, this decision was reviewed and KPN decided to withdraw this goal and stop favouring women in its hiring policy. I this blog I will try to argue both why these decisions could be regarded rational and why they could be regarded boundedly rational.

Why rational? 

Acting rational, I will assume for this blog, from the perspective of a company, means acting in the favour of shareholders alone and increasing profit by all means possible. Arguments can be formulated that support the statement that the hiring policy by KPN is a way to maximize profit and that, therefore, adopting a female employee quotum in 2009 and abandoning it in 2014 is the result of a rational decisionmaking.

Diversity for the win. 

A mixed team will create fruitful working circumstances, increasing efficiency and thereby profit, may have been one of the considerations made by KPN policymakers in 2009. In 2014 however, the same decisionmakers came to the conclusion that this effect was overestimated, for the team had become more diverse but was not performing significantly better or generating more profit. A rational response to this could be to abandon the quotum again, which is what KPN did.

External pressure and corporate image

From the government and society there is a pressure to hire more women for top functions, doing so will be beneficial to the corporation’s reputation and therefore increase profits, may have been an argument in the decision KPN made, but in 2014 there is another important external pressure, for the managementteam is not only required to include both men and women, but also both native and immigrant employees. So when in 2014 the female quotum was found to reduce the employment chances of immigrant people, and therefore to no longer maximize the reputational benefits that can be gained from a mixed team, a rational decision could have been to adapt this policy and therefore abandon the female quotum that was adopted in 2009.

Hiring efford

Since we live in a society where gender equality is a very important value, it should not be harder to find suitable woman for top functions than it is to find suitable men, could have been a third consideration done in the decisionmaking process in 2009. Reality turns out to be different, in an explanation of the withdrawal of the female quotum KPN states that finding women for top functions is harder than finding men for the same, rationally viewed a bigger efford for the same goal (finding a suitable employee) is not a maximisation of profit, therefore the decision to withdraw the quotum in 2014 could be regarded a rational decision.

If all the arguments for a female quotum are taken into account in the decision, the choice to formulate it seems the best way to maximize profits. When only the information available at that time (2009) is taken into account, this decision can be regarded rational, as can be the decision to withdraw this quotum (in 2014) when the other arguments and later findings are taken into account as well.

Why boundedly rational?

KPN policy makers, rationally viewed, have the goal of maximisation of profit and the shortest line towards this is to hire whoever seems most suitable for a specific function, regardless of this person’s gender or nationality, but other factors may come into play, such as adaptation, uncertainty and trade offs.

Adaptation

Adaptation is an important factor, for decisionmakers live in a society where equality is strongly valued. This is also taken into account when making decisions. But since this society changes over time, the decisionmakers may adapt with it. This may declare why in 2009 this quotum was formulated (strongly valueing woman employment chances) and in 2014 this quotum was withdrawn (weighing woman employment chances against immigrant people’s employment chances.).

Uncertainty

Uncertainty is in the basis of every decision, that might be why the policy was acquired in 2009 but is abandoned in 2014: one can never be completely sure of the result of a policy. A team that was a more balanced mix of woman and men than existed in 2009 was expected to create a better working climate, thereby increasing profits, but this turned out not to be the case, at least not in the degree that was expected. The reason for the 2014 policy evaluation could be uncertainty, for social dynamics in a working environment are very complex and there is no way to predict the results of a hiring policy in detail over the years. The high grade of uncertainty in this factor may be one reason to call this decision ‘boundedly rational’ and may also partly declare why the decision was evaluated in 2014.

Trade offs

The fact that the decision of a female hiring quotum is reevaluated now also implies the difficulty the decisionmakers have in weighing the different values. For not only gender equality is at stake here, but also equality in employment chances between native and immigrant people, as well as profit maximisation, social dynamics in the working environment and many other values. Formulating a female hiring policy and quotum is one way to decide on this trade-off, withdrawing this quotum is another.

Regarding the adaptation, uncertainty and trade offs faced in the decision made on the one hand, but the orientation towards profit generation on the other, the decisions made could be regarded boundedly rational.

The boundedly rational organizaton, by Jones (2003):

Jones identifies five aspects of boundedly rational, human cognition that can be applied to the KPN organization and the decision making process in the case of the female quotum:

1. Organizational memory (or the rules, routines and standard procedures of a company) could have played a role in the KPN decision process, for example in the process in which more women became part of the management team, but the procedures were not adapted to the different board composition (the old routines and procedures would be kept instead). This may have been the reason the anticipated positive effect of a more mixed team did not appear, causing the board to decide to abandon the female quotum. A rational maximizer would have researched all options (including the option of adapting the quotum, complemented with adapting the rules, routines and procedures to the new board composition) and would have chosen the optimal option. KPN would stick to the old rules and procedures (boundedly rational) and come to the conclusion the female quotum did not improve the performance of the board as a whole.

2. Agenda setting (Choosing whether a problem or piece of information is relevant or not at the moment of decision) is another aspect of bounded rationality that is in play here. The female quotum was only relevant to the board on two moments: first the moment KPN was forced to hire more women for top functions in order to become more legitimate, then when hiring more women turned out to cause more problems than it would solve. A rational maximizer would have monitored the process with the same urgency over time and come to different conclusions, but because the KPN board only acted when the urgency was high enough, they were forced to first adopt, and later abandon the female quotum.

3. Parallel processing / Serial processing (Parallel by delegating and decentralizing, Serial processing by searching for new solutions and abandoning old ones, comparable to central processing in the human mind when standard procedures seem inadequate.) The decision to adopt a quotum for women in the board seems to have been a parallelly processed decision, for it was a routine reaction (a change in policy) to a pressure from outside. The decision to abandon this quotem seems to be serially processed, for the board concluded adopted procedure was not adequate and a new strategy was required: abandoning the quotum.

4. Emotional contagion (people need to be emotionally contaged and committed in order to participate in certain choices) is another important factor in the decisions made, for in a question that concerns gender equality, there is always a lot of emotional contagion, resulting in choices that may have to be reviewed later, which was also the case here.

5. Identification with organization (people identify with the organization they participate in) is the last aspect of bounded rationality in play here. People identify with their organization and therefore value, for example, the image of the organization just as high as the profit made. Therefore choices can be made in favour of this corporate image that have to be reviewed later, which was the case here.

When the factors named by Jones are all taken into account, we could argue the decisions made by KPN are boundedly rational decisions.

Note: This blogpost was written only to formulate a plausible account as to why the decisions made by KPN could be regarded rational or boundedly rational, and not in any way to take a position in whether the decisions made by KPN on the female quotum were the right decisions. Any statement on gender equality made in this blogpost relies on statements found in the source article. 

Source article: http://www.trouw.nl/tr/nl/4492/Nederland/article/detail/3756131/2014/09/26/Kamerleden-boos-over-intrekken-vrouwenquotum.dhtml

Other sources:

–  Jones, B. 2003. Bounded rationality and political science, Journal of Public Administration Research and Theory 13(4): 395-412

Changes after feedback: Included the paragraph ”The boundedly rational organizaton, by Jones (2003)”.

Kyoto versus Montreal

The Kyoto protocol versus the Montreal protocol: Why could the ozone problem be tackled relatively fast, whereas the problem of global warming seems so hard to solve?

Some of us may remember the alarming images in the media, warning for the CFC’s carving holes in our ozone layer, exposing us to dangerous UV radiation would damage the skin and could even cause cancer. We may remember the environmentalist organisations, warning us, the government and the industry about all the danger the chlorides were causing. But although these problems were very urgent and complex, these memories are all that is left of them and if we believe the major part of today’s scientists, they have mostly been solved. The montreal protocol, the international treaty designed to protect the ozone layer, is a good example of efficient cooperation between scientists and policy makers and maybe that is why is so succesful.

The global warming problem, on the other hand, seems to be way harder to solve, and although it is just as complex as the ozone problem, a lot of research has been done and the problem is almost as well understood, a solution still seems to be very far away. This raises the question of that, although these two problems are quite comparable (they are both global atmospheric problems that are probably human-induced and caused by chemicals emitted), how could one be solved that much easier than the other?

The puzzle: If we were to translate this puzzle into a graph, then the timespan between the moment the protocol was initiated and the moment the problem was no longer regarded urgent or threatening to the earth (in years) would be on the vertical axis and the two problems (the ozone layer hole and the warming of the earth) would be on the horizontal axis. Then if we were to draw a line between global warming and the hole in the ozone layer, this line would have a downward trend, which I will try to explain in this blog entry. Therefore the main question I want to answer is: why is there a downward trend when comparing the Kyoto protocol to the Montreal protocol on the time it took for their respective problems to stop being an urgent problem to the earth?

Because the ozone depletion was a direct problem to  some of the richer nations on our planet?

A first possible explanation for the fact that the ozone depletion problem was solved so fast is that it mainly adressed rich nations, such as Australia, New Zealand, the southern part of south Amerika (including Chili and Argentina) and the Falkland islands (a colony of Great Britain). These are the countries that were under the ozone hole and therefore it’s inhabitants bared the highest risk to skin damage or melanomia. This could have been a great stimulus to the governments of these nations to solve the ozone depletion problem, and since the monetary and scientific resources were available, this solving probably happened very efficiently.

Global warming, on the other hand, will not be a big problem to many of the richer countries in the years to come. First of all because they have enough resources to adapt to the changing environment, loss of biodiversity and rising sea levels, but also because the cost of the societal and industrial changes needed to counteract global warming probably outweigh the cost of the damage global warming will do on the short term.

Because this is fear versus care?

When the hole in the ozone layer was proven, the fear of developing skin damage and cancer because of UV-light exposure caused broad awareness of the problem, giving it priority on the political agenda and demanding fast solutions. The fear of disease and pain could have been a strong driver to act fast and solve the problem. This means a reason the ozone depletion was solved fast and efficiently might be because it is a direct threat and therefore scares us.

Although the global warming problem may be a threat to the human kind on the long term, it probably will be others who do the suffering for us. For instead of humans suffering skin cancer, it will be ice bears suffering habitat loss, also it is not our own food security that is threatened to a considerable extend, it is our grand chrildren’s. We may conclude that fear is simply a stronger incentive to undertake action than is the care for others.

Because easy and cheap alternatives cannot outcompete strong lobbying and great interest? 

A third explanation for the quick solving of the ozone problem is that, although complex, the process is well understood. Therefore alternatives for the CFC’s could be found easily in, for example, HFC’s and HCFC’s and the change needed to counteract the ozone depletion was not that extensive. The problem may have been just as complex as the global warming problem from a scientific perspective, from a political and economic perspective is may have been way simpler.

We do not know a lot about the global warming problem yet, making it more difficult to undertake action. For example, some scientists argue that the warming of the globe is caused by carbondioxide emitted by human society, but others argue that the warming is caused by a periodic peak in solar activity, therefore being something we cannot solve and just have to adapt to. This discussion is made even more complicated because much of the research in climatic problems is done by or payed for by companies in the petrochemical sector, which is in charge of big monetary resources but obviously has great interest in the outcome of the research. A last factor that complicates matters on the global warming front, is a political unclarity: we have not yet agreed upon who is most responsible for global warming and who is going to act against it, whereas in the Montreal case there were specific (CFC-emitting) industries that could be held responsible.

Montreal versus Kyoto

We may conclude that at least some of the reasons why the montreal protocol is that much more efficient than the kyoto protocol are that, first of all, solving the ozone depletion is much more in the interest of the richer countries than is solving the global warming problem. Second, we may argue that fear of skin damage an cancer is a greater incentive to change than is care for nature and our grandchildren. A third explanation may be that the ozone depletion problem was researched well and unbiased, whereas the global warming problem is researched by both independent scientists and big, resourceful companies that have a strong interest in the outcome.

Sources:

• http://www.answers.com/Q/Which_country_is_most_affected_by_ozone_layer_depletion
• http://www.unep.org/newscentre/default.aspx?DocumentID=2653&ArticleID=8864

The  business of business, taking an ex ante position. 

‘A company’s only responsibility is to increase its profits.’

                                                                                                          Milton Friedman.

Milton Friedman once said that the only responsibility of a company is to increase its profits. For this blog I was assigned to develop an ex-ante position on this statement, in other words: to find out whether I agree or disagree with what Friedman said. When I look around I can only conclude that, apart from some non-profit organizations and other exceptions, most organizations (by which I mean their CEO’s), agree with Friedman, giving profit a priority above all else. I think in the current situation Friedman is right: A company’s only responsibility nowadays is to increase profits, the question I ask myself is: should it be?

The importance of labour conditions

Labour conditions are an important topic of consideration for companies and will be more and more in the future, for not only from a perspective of making profit it is important (employees are an important vaue for a company, but also for the reputation of a brand), it is also important to notice that especially bigger brands are in a good position to act against bad labour circumstances. By valuing and paying for a safe and healthy environment for employees they can better the lives of millions.

The importance of environmental concerns 

Caring for the environment is the second thing that, in my opinion, belongs to the business of business. Except for the brand reputation and the fact that companies are in a good position to initiate an environmentally friendly trend, it is also very important for a company to keep the balance with its surroundings. Compare it to a colony of bacteria: a colony that would use its resources well and recycle its wasteflows, would survive way longer and would be able to grow much bigger than a colony littering its environment and using its resources inefficiently. In the same way, a company that cares for the environment will keep it suitable for the generations to come, instead of only gaining profit itself.

Innovation to keep going

 A businesses third business next to generating profit, in my opinion, is generating knowledge and initiating innovation. First of all to create value, but also for others to profit from. A company might be in an excellent position in terms of knowledge and resources to initiate innovation and create new knowledge, whereas others might not. For example: a company of might have the possibility to develop a drug against AIDS because of the monetary intellectual resources they have, and by doing so cure millions of people from a horrible death, whereas this might not be profitable for a company at all, I still think it is the responsibility of those who can.

Only to make profit, or not? 

I think that, next to making profit, buisiness has many more responsibilities, for example to care for nature, care for its employees, and to initiate change and innovation. The reason for this is that I think many companies are in a great position to do this and therefore are also partly responsible for the consequences if they don’t. Having said so, I feel that I have to make an important remark: A company cannot survive without making profit, therefore if social responsibility would be above profit in any company, there would not be a lot of social responsibility taken care of, for not much of the company would be left after a while. Therefore my ex ante position on the Friedman proposition is that it is not the only responsibility of a company to increase its profits, but it will always be the most important responsibility.

By Hans Peter Honkoop

Changes after feedback: Montreal vs. kyoto: included a paragraph that clarifies the puzzle. Friedmann: Small clarifications.