legitimacy in NOKIA case

In an increasingly globalized economy, more corporations are 'outsourcing' their production to countries with cheaper labor costs and less legal protection of workers' rights. Some corporate managers, whether out of sincere moral concern or because they must respond to the considerations of investors and shareholders, are attempting to balance profit-making with social morality.

A DECENT FACTORY focuses on such an effort by Nokia, the Finnish electronics firm, which sends a team led by two business ethics advisors to examine conditions at a Chinese factory that supplies parts to Nokia. During their tour the Nokia team investigates working and safety conditions, payroll records, and potential environmental hazards. They also have interviews with the factory managers as well as several young Chinese female employees.

Q1. Analyze how the two key organizations in this case (Nokia and the supplier) are striving for legitimacy.
The extent to which the activities of a firm ‘are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’ (Suchman 1995)
Obviously, Nokia and Chinese supplier come from two totally different backgrounds.
Nokia is striving for legitimacy by making an assessment of their supplier in China. Nokia wants to make sure that not only the company itself works in a legitimacy circumstance, but also their part suppliers. The Nokia wants to know not only whether their employees being paid at least the legal minimum wage, but also how long they have to work every day and the condition of their dorms and workshops. The Nokia wants to know whether their Chinese supplier meets the legitimacy standards or not.
However the Chinese supplier is in a developing country. What they do to strive for legitimacy is paying the minimum wage to employees but hold back certain amount of money for dorms and food. Also no contacts signed. It’s not only because of lack of a legal consciousness, but also they are satisfied with what they get from the company. In China, a factory in such condition is better than most other factories. Can you imagine places where the employees come from is even worse?
Apparently it can’t meet Nokia’s expectation.

Q2. Is the approach taken by Nokia an effective way of diffusing sustainability criteria?

What Nokia did may have little effect. Because I believe that force can not help to this situation.

In my opinion, I suggest that Nokia should try to understand how this situation came up. And why the Chinese supplier does in such ‘illegitimacy ’ way.

Also, I believe that communication will help. The Nokia’s team could listen to some of the employees’ requirements. Not only do Nokia need to ask questions that Nokia really care about, but also it should to care what supplier cares about.

I think this will be more efficiently.

Q3. How could another coordination mechanism improve on this?

There are 3 ways that we learned from class,which are coercive pressure, mimicry and normative pressure.

In this case, I think normative pressure would help. Because if supplier does not lead to the desired effect, external control should be needed. And this control, in my opinion, had better from the government. Because in China, legislation is convincing. If supplier doesn’t obey the law, it would face severe punishment by Chinese government.