As the world becomes more integrated globally, the divide in social wellbeing and sustainability grows. Current liberal ideologies within the global economy do not take into account the subtle and complex issues relating to the very people who operate the parts. As economies and industries grow and reorganize, labor is slacked off. The mere use of the word labor, one can argue, defocuses our thoughts on what labor actually is – people. National and international governing bodies seem unable or unwilling to properly maintain the wellbeing of its citizens. Exploitation of the international division of labor has effectively ushered in a global cast system, or less harshly an order of class. There are ways and thoughts that can be explored that address social responsibility. If the mere ideas of social responsibility are adopted, we can ensure the continuing supply of labor and possibly ease the awkwardness seen from a geographical perspective.
The vague and ever varying threadless patchwork
The world seems to be continually condensing in on itself. Globalization has, in a measurable way, imploded the miles that divide our world. This has, however, brought to attention inequalities that paradoxically rebuild those destructed miles. As we increasingly integrate, the issues of far off nations have a direct impact on our life that causes us to see more globally. More and more of these isolated inequalities of globalization arise. The term isolated can be argued because the geographical look at economic globalization shows the arms move to very concentrated areas, with the areas absent representing a more humanitarian plight. These concentrated areas are predominately North America, Europe and the Pacific side of Asia. The engines that drive along globalization are the neoliberal ideologies of open markets and reductions in protective governing. As one would expect of an institutional ideology of deregulation, the governing bodies that operate have a vague delegation of authority. In addition, the degree at which nations vary when looking at the inequalities inherent in the open market lend to neoliberal ideology.
The very mechanics of growth and profit demand exploitation of resources and labor. Neoliberal globalization at its core is based around “minimizing employee compensation and also shifting cost created by business onto society as a whole,” (Milchen, 2000). Nations strive to build attractive areas and labor pools for multinational corporations. That places the side effects of economic globalization, as in- infrastructure needs, health-care to maintain labor, human disasters caused by corporate operations, and social wellbeing relating to the continuing need of assistance because of low wages, on the backs of people. To gain the operations of multinational corporations the attractive labor pool is often most attractive when workers’ rights and compensation are minimal. Again, Neoliberal ideology allows a multinational corporation to avoid and potentially capitalize on the negative effects they often cause. The responsibility has to go somewhere. Currently, there is not a strong motive towards social responsibility within multinational corporations. “Growth and profit by default, and often time’s legal, are the motives a corporation adheres to,” (Milchen, 2000).
The regulations and legalities nations and international organization use are seemingly rigged to benefit the powerful multinational corporations. So much policy and regulation is based around the ease of entry for multinational corporations with little insight to its effects on society (Dicken, 2011). Free-trade ports create almost compound like areas of development that often do not extend domestically. These areas are often filled with low-wages labor-intensive jobs that women take. As developing nations enter eras of deregulation and open markets to appease developed nations the very control stripped can be based around workers’ rights. Nations and multinational organizations erode rights and livelihood, as in deregulated over-time limits and compensation, pensions, rights to organize, and hourly compensation often just to attract the business. All this deregulation is aimed at appeasing the voracious desire for corporate growth and profit. The nations themselves seem willing to sacrifice the growth and prosperity of their labor force.
“Regulatory regimes of codes of conduct are still a thin and one-sided policy used by single enterprises,” (Fichter & Sydow, 2002). Even when codes and standards are stated, they are often voluntary and used as public relation moves. The governing bodies of the International Labor Organization and World Trade Organization are not considered effective regarding authority. Social initiatives are slow to be adopted (Fichter & Sydow, 2002). Even more drastic is that a corporation often times would rather pay a fine or settle a case than pursue a socially responsible alternative. This example can be typified by the devastating scandal based around the former American energy company Enron (Milchen, 2000).
Scholars argue, “if social responsibility matters at all, consumers would express their preference for goods and services,” (Fichter & Sydow, 2002). This simply is that we have the ultimate power as a consumer to choose what we buy. This argument is thin; the complexities which drive our decisions with media, social class, market manipulation, and the sheer power of many multinational corporations minimize our power as consumers. Most media corporations are condensed and control by a small number of firms. They increasingly homogenize the media we are given. In a modern world of communication we are endlessly saturated with advertisements and marketing. Even deeper is the mental duality of desire: desire for the SUV, desire for those designer jeans, and desire for status. These factors erode the amount of control we have as consumers. Even from a geographical perspective, the amount of options and choices we are given come from a very small pool of resources that are not evenly dispersed.
The physical manifestations of globalization are where the people live
The end result of a top-down decision based on the motives to grow and be profitable can have devastating effects. More often, the needs and livelihood of those affected are not taken into consideration. When a corporation moves production for cheaper labor, the result is job loss and the creation of further debilitating wages elsewhere. When industries upgrade, which is thought to expand out domestically, the workers are often left behind and considered obsolete. A saturation of high labor, low-wage employment aids in creating informal workforces that lack any type of representation or rights. Unregulated labor in developing nations has led to child-labor, horrible environmental consequences and urban growth that is not maintained to any degree. The subtleties of a free market cause the shift of blame and responsibility onto those who need a stronger stake or importance within the system in the first place. Increasingly nations, NGO’s, and domestic movements struggle to address the increasing inequalities. The reality is that we, the actual labor-force, need corporations and international governing initiatives to take greater responsibility.
An informal economy and workforce can be volatile. At its simplest form it is deregulation in its truest form because there are no formal rules, regulation or control. This leaves those who work in an informal setting in a very dangerous place. Continuing to use India as an example, we can examine the conundrum of informal work. There are no rights or representation for workers by employers or governing bodies. There is no way to ensure continued employment, safe working conditions, benefits to safeguard one’s future, and the inability to safely raise a family. Workers in India are using novel approaches to ensure a very limited amount of protection. In fighting for their family’s education, housing, health-care, and even basic identification, they have turned away from employers and are pressuring the state (Agarwala, 2007). The sheer population of India would conclude the massive burden it would take to ensure this without any input from employers.
“India is an example of the creation of informal economies and workforce. India now employs 93% of its workforce in the informal economy,” (Agarwala, 2007). We see this country growing and developing, data shows rises in many aspects of the global economy and a growing middle-class. However, the issues relating to the massive informal workforce would be left-out of most of that data. It can be argued that India and the multinational corporations that fuel its free-market ports lack any responsibility for the wellbeing of the population. If social responsible activities were used, the population would not be so dependent on an informal economy.
“Income inequalities are growing worldwide,” (David, Beckfield & Zhao, 2007). Developed nations are faltering while other developing nations grow. This cycle, if continues, will lead to uncomfortable situations because of the deep implications income has to wellbeing, especially in developed nations. China grew on the back of cheap labor; already other nations like Vietnam, Bangladesh and Cambodia are poised to try the same thing (Li, Li, Wu & Wang, 2006). China is able to exploit and allow multinational corporations to take advantage of an immense and cheap workforce. This leads to the obvious rise in China’s importance globally. From an American perspective, we smolder with the thoughts of jobs being stolen from our manufacturing industry. Cheap labor and income in China is starting to give way. The future will also see a continued rise as the labor pool contracts because of childbearing policies (Li, Li, Wu & Wang, 2006).
Income, however, in China and other developing nation’s pales in comparison to developed nations. It is not without saying, however, that incomes in developed nations are continuing to divide. Wages in America are falling. With a decrease in unions because of neoliberal freedoms, employees are increasingly found without proper representation. “Foreign Direct Investment (FDI) inflow is shown to actually increase inequalities while open trade is known to decrease inequalities,” (David, Beckfield & Zhao, 2007). As the United States continues to ease regulation and become ever more liberal, the safeguards social responsibility could ensure are eroded. The American government, having no real industrial policy, is indicative of having no real motive towards social responsibility or standard ideology that ensures wellbeing and sustainability holistically (David, Beckfield & Zhao, 2007). The inequalities in income have made the division of labor more apparent and have created not only a division, but also a cast or class system as well.
Taiwan, an island nation, is highly dependent on international trade. With the intimate needs of international trade, one would think the nation would emphasize the need for social responsibility due to the obvious degrading factors in trade. You would imagine a balanced approach to obtain and maintain the activity if one is so dependent on it. Globalization has brought successions in development that led to a slacking off of labor. In the 1970’s and 80’s, Taiwan pushed for labor-intensive textiles that required low-wage workers. In the 1990’s industries in Taiwan upgraded to capital-intensive electronics (Tsai, Lee & Wang, 2006). As we know, upgrading and changing economies mean a reorganization of the division of labor. As industries moved towards more capital-intensive activities, the labor-intensive operations moved away, leaving those who worked those jobs obsolete because of a lack of education.
The unregulated rise and change in the Taiwanese economy has profound effects. Suburban growth causes land to be very expensive. Energy is also skyrocketing. Socially, a generation of youth whom have more or less had it easy does not want to work (Tsai, Lee & Wang, 2006). Taiwanese multinational corporations have noticed and direct their FDI to markets that they can bypass the expenses occurred in Taiwan (Tsai, Lee & Wang, 2006). A lack of social responsibility on the part of the Taiwanese government and multinational corporations are causing a tricky situation. The government doesn’t ensure workers’ rights that would safeguard an aging population whom have worked a lifetime already. There is no responsibility on the multinational corporations to ensure those benefits for a career of work. Workers who want to work but aren’t educated cannot find work in capital-intensive industries. The generation educated enough for these jobs do not want to work, and it is often their parents who are not able to work any longer.
What can social responsibility do? Where and how is responsibility enacted?
We could easily continue with the effects of globalization and a lack of social responsibility. One must also look at what social responsibility can do and where and how it can be enacted. The ideas of social responsibility are easy to theorize about but complicated in approach. The issue is really more of a philosophy to a way an industry should live its life. However, within the norms of globalization and global production networks, we can achieve greater social responsibility. If we enable our governing and regulatory bodies more authority and cooperation to represent the people, we could achieve human growth. Along with governing, self-regulation should be maintained in tandem by multinational corporations. There are even radical approaches in terms of forcing socially responsible practices on international enterprises.
On the level of multinational corporations, the initiatives of social responsibility could potential have the greatest benefit. No one benefits more from neoliberal ideologies than the multinational corporations do. More and more we hear of the large amounts of profits, bonuses and subsidies they receive. They are able to mobilize and exploit benefits because of their sheer size and ability to play currencies against each other (Dicken, 2011). Our global economy can be seen as a large playing board with the pieces stacked and placed in their favor. It is unfortunate the player that could have the greatest effect is in essence the one causing much of the problem. A multinational corporation has to see the benefit in social responsibility. This is compounded with the need for a measurable means to quantify the benefits. If there is no gain, what the purpose of doing it?
“Network modes of coordination could be effective in governing global commodity and production chains in support of realizing good corporate citizenship,” (Fichter & Sydow, 2002). Standards and codes of conduct enacted in a systematic forum can support their formulations and network-wide adoption (Fichter & Sydow, 2002). This argument is very complex and would benefit a larger established production network. Moving towards a proper network size, akin to an economy of scale, could enable functional entry of social responsibility. Stronger inter, and intra-relationships lead to better social responsibility.
If you consider Japanese style corporation, which are typically idealized as having very strong horizontal relationships and persistent longevity, the ideas of social responsibility inputted into production networks seem plausible (Dicken, 2011). A Japanese firm would arguably have a greater chance of working in social responsibility because of the trust and length of partnership between its firms and suppliers. The stronger the ties, the more likely it will support intensive communication, mutual understanding, and adequate means of resource usage. “Strategic networks create hubs that are even more effective at introducing social responsibility,” (Fichter & Sydow, 2002).
When strong relationships and strategic networks are absent, there are still ways in which a multinational corporation can introduce social responsibility. Nike, who is not innocent regarding social responsibility, uses metrics to evaluate its suppliers (Locke & Romis, 2007). Nike has and can argue they are not responsible for the conduct of its suppliers, but the argument does not work on consumers. In the past, the metric system Nike used was a two-part process that was both subjective and objective. Often times suppliers were graded the same but were very different in operations.
Two plants in Mexico are of great example, both scored the same grading but for very different reasons. Plant A uses lean practices in production with a strong emphasis on teamwork and employees being educated on machinery maintenance. Plant A also rotates jobs, offers voluntary over-time and pays slightly higher. However, Plant B enacted involuntary over-time, no job rotation, lower wages, and less employee input. Plant A obviously scores higher objectively but how does Plant B grade higher subjectively? Plant B instills initiatives that help workers outside the job. The greatest example is in-house daycare. Considering the majority of plant A and B’s workers are women, free daycare is a great benefit. Regardless of a difference in score, Nike grades its suppliers to ensure a certain amount of social responsibility is used with its workers. Moving forward, Nike has adopted a joining of its two-part metric system that would now grade plant A and B very differently (Locke & Romis, 2007).
Nationally and regionally introducing social responsibility can be considered equally as complex as with a multinational corporation. Dealing with the sovereignty of a nation and its own right to govern creates a precarious situation for national and international organizations. “International unions are considered largely ineffective,” (Fichter & Sydow, 2002). There lacks a unified presence in relation to social responsibility and a keen difference in the way unions operate across borders. Drawing NGO’s and international unions together in a strategic alliance could accent the impact on social wellbeing. Turning away from lobbying international agencies by pressuring multinational corporations and the state itself could have further benefits. National and regional introductions to certification processes could have an effect without the need for independent organizations. The Forest Stewardship uses a chain of custody method to ensure products meet certain standards. The product has to be certified which enacts an amount of control towards environmental and social wellbeing. Even more alluring is the notion that people would gravitate more towards a certified product thinking it is of better value (Fichter & Sydow, 2002).
The relationship between liberal economies and social responsibility is a love hate relationship. The two ideas are at odds with each other. A more drastic approach, one that is usually dismissed, is the mobilization of sustainable, socially minded global regulations. Neoliberal ideology gives unprecedented freedom to entities that are not actually individuals but rather an agglomeration of employees who have individual rights (Milchen, 2000). Stripping a corporation of their rights to govern, lobby, manipulate or control governments and international organizations could ensure the rights of the planet and her people are better met. A very hot topic in America is the rights of corporations to partake in the political process. One can argue that the individual employees have inherent rights to partake in politics and that allowing corporations to do so enables a double-dipping effect. This creates an unfair disadvantage to anyone not a part of that corporation or entity (Milchen, 2000). On top of stripping corporations of their rights to donate and lobby we could invest further authority to international governing and allow them to actual enforce corporate social responsibility. Self-regulation alone does not seem like it will be followed wholeheartedly and international governing does not have the power to effectively control multinational corporations or sway national governments.
Globalization is increasing and people are becoming more and more connected and integrated. As this process of globalization increases, the inequalities inherent to its operation are being exposed. The current short-term corporate behavior and lack of effective governing has ushered in an era of absent social responsibility. The livelihood, rights, and wellbeing of people across the globe are being reduced while corporate profits just increase. As multinational corporations pursue stronger neoliberal ideologies and effectively bully developed nations to deregulate and unprotect their markets they strip avenues that workers could possibly take to ensure their rights are granted. Furthermore, the homogenizing of our globe subtly degrades the knowledge and access to sovereignty, either in freedoms of people or a nation as a whole. We must change our philosophy. We must strengthen corporate social responsibility by either adherence or force. Finally, we must not allow a corporation, who’s very fundamental structure is aimed at a reduction of compensation and an exploitation of resources, to govern the very people they exploit.
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