Tag Archives: governments

The Myth of the Social License to Operate

Over the last two decades many of the world’s largest companies have been involved in scandals, misconduct and dubious ethics. Rather than relying on interventions by public authorities, the dominant governing rationality is informed by the belief that the market is able to balance social, environmental, and financial interests. However, the vast majority of companies that have been involved in ethical transgressions have survived – and have even thrived. Potential damage to the reputation of companies, or threats to their ‘social license to operate’, seems to have had a limited effect. There is therefore reason to believe that market forces are not adequate by themselves to correct corporate misbehaviour.

This chapter from the upcoming ‘Research Handbook on the Sociology of Organizations’ explores the reliance on market forces to correct corporate actions that are not aligned with the common good. It examines to what extent legitimacy theory adequately explains the dynamics around organizational legitimacy, and it proposes an expansion of legitimacy theory to increase its explanatory power: the use of social dominance theory and legitimizing myths expands (organizational) legitimacy as a theoretical construct. In explaining why antagonistic stakeholders continue to rely on market-based approaches, this research suggests that they have either bought into the hierarchy-enhancing myths, or they have not yet developed compelling hierarchy-attenuating myths to challenge the status quo. The chapter concludes with the suggestion that the ‘social license to operate’ and ‘corporate purpose’ are legitimizing myths that uphold the idea that the market can balance social, environmental, and financial interests.

Modern Slavery and the Employment Relationship: Defining the Continuum of Exploitation

The Special Issue on ‘Modern Slavery and the Employment Relationship: Defining the Continuum of Exploitation’ in the Journal of Industrial Relations is now available online. The Special Issue focuses on what the large- and small-scale risk factors are that can cause working conditions to deteriorate, on how people can become trapped in exploitative conditions, and on what can be done to prevent and remedy labour abuses. Included articles explore the macro-level, specifically by examining global value chains and the labour exploitation within the global production regime and by examining the producer-end (rather than buyer end) of value chains and the responsibilities of companies for working conditions further downstream (rather than upstream) in the value chain. Other articles explore the market-based character of business and human rights regulation. One article concludes that market enforcement of modern slavery regulation is sub-optimal and should include $ penalties and a public regulator while another article asks whether business and human rights regulation originating in the Global North can improve working conditions in the Global South (spoiler: it’s complicated). Articles looking at the micro-level examine labour regimes on factory floors, specifically by examining the influence of the post-Rana Plaza labour governance system on worker outcomes and conditions of employment (hardship remains but less sweatshops) and by documenting the work experiences of Romanian transnational live-in care workers in Austria, where workers gave accounts of having been treated unfairly due to their dependence on placement agencies and employers.

Why do Companies Find it so Hard to Choose Between Profit and Principle?

Businesses with ties to the Xinjiang province in China find themselves at a junction.

Caught in debates concerning Uyghur people being the victim of modern slavery and genocide, they must deal with concerns expressed by Western governments and human rights groups, and an increasingly agitated Chinese Communist Party.

Some commentators have suggested that foreign companies that (in)directly profit from the systematic exploitation of Uyghurs in China must choose between profit and principle.

It seems like a straightforward question: do companies want to profit from the state-organised repression, exploitation and extermination of an ethnic minority, or do companies condemn the treatment of Uyghur people in China and deal with the backlash?

The conundrum underlying the question is as old as capitalism itself: what social costs are we willing to accept in order for companies to make a profit?

Continue reading Why do Companies Find it so Hard to Choose Between Profit and Principle?

Coronavirus Hits Precarious Workers in Supply Chains Hardest

Computer chip and circuit board factory, Jiangxi, China. Shutterstock

The COVID-19 coronavirus is officially a pandemic, the US and Australian share markets have collapsed, both governments have unveiled stimulus packages, and Australia’s trade union movement is worried about the position of casuals. But things are worse overseas, including for the workers who make products for Australians.

20,000 garment workers in Cambodia face job losses from factory closures because of shortages of raw materials from China and reduced orders from buyers in the virus-affected locations including the United States and Europe. Thousands have already lost their jobs in Myanmar. Garment workers in Sri Lanka and Bangladesh are uncertain of their futures.

Continue reading Coronavirus Hits Precarious Workers in Supply Chains Hardest

Support for Survivors of Modern Slavery

The Thomson Reuters Foundation News details how Brazil is aiming to build a network of social workers to support people rescued from modern slavery, and help prevent would-be victims from being trafficked. “The social workers would be primed to offer immediate post-rescue care to victims, and provide follow-up assistance such as ensuring that survivors are signed up to government aid schemes and children are enrolled in school.”

Providing adequate institutional support is absolutely critical, given the growing number of (modern slavery) laws and amendments that are introduced. It is vital that governments prepare for the potential flow-on effects. In the excerpt from our book “Addressing Modern Slavery”, Justine Nolan and myself address the importance of support from authorities for modern slavery survivors and the key role that government has to play:

Do No Harm? The Hidden Cost of Your Healthcare.

There are unacceptable hidden costs in the production and procurement of medical goods by Australian companies and government, according to a new report published on Thursday by the Australian Nursing and Midwifery Federation and The Australia Institute. The report – Do No Harm: Procurement of medical goods by Australian companies and government – documents mounting evidence of labour and human rights abuses in the overseas production of goods such as gloves, surgical instruments, clothing, footwear and electronics. It calls for action at corporate and government levels, saying Australia is not doing enough to stop exploitation of workers, including children, in low-wage countries in their supply chains.

The report’s author Martijn Boersma outlines the key findings and recommendations in the post below. Continue reading Do No Harm? The Hidden Cost of Your Healthcare.

Abusing Innovation

Go to bed

Innovation and entrepreneurship are very much the flavour of the month. Widely regarded as instrumental in the next wave of economic growth, determining the ultimate recipe for innovation and entrepreneurial success is by many considered to be the holy grail. Indeed, we are all being encouraged to become like Steve Jobs, Mark Zuckerberg and other hero entrepreneurs that somehow went from eating macaroni and cheese in a garage or a campus dorm room every night, to becoming obscenely rich by inventing new things we now obsessively use or log into every day.

Continue reading Abusing Innovation

Online Privacy: Terms and Conditions in Five Bullet Points Please

“Time is running out to clear your browsing history before Google’s new privacy policies come into force!” Countless blogs and websites rang the warning bell on Google’s latest evil ploy to gather every single piece of information on individuals using their services. The URL to Google’s web history was eagerly re-tweeted and visited, in what seemed to be a true online civil action against the violation of privacy. But to what extend is the latest online privacy outrage justifiable?

Although the Google web history madness seemed to constitute a moment of communal outrage, I am quite certain that only a relatively small number of the stupendous amount of individuals that use the Google search engine on a daily basis are aware of this matter at all. I am also fairly certain that a substantial amount of the people that re-tweeted and spread the news about Google web history did so simply because of the appeal of the header “Clear your Google Web History before the big privacy change!” Continue reading Online Privacy: Terms and Conditions in Five Bullet Points Please