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Class 3: Out of Crisis:Innovations in the 1980’s and Beyond

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond

“Week 3 Intro … What Changed in the 1980s and why should we care? … The Purpose of the American Corporation … The Changing Role of the Corporation: Interview with John Reed … Rise and Fall of Saturn … High Performance Work Systems … Market Basket Case: Zeynep Ton Video … Holding Global Corporations Accountable: From Nike to Apple … Alternatives to the Traditional Corporation … PDC:High School and College: Necessary but not Sufficient … PDC:Life-Long Learning: Moving from Rhetoric to Reality … Around the World:Role of the Corporation in Different Societies”
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Summaries

  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Week 3 Intro > Video
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > What Changed in the 1980s and why should we care? > Video
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > The Purpose of the American Corporation > Video
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > The Changing Role of the Corporation: Interview with John Reed > Video
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Rise and Fall of Saturn > Video: The Rise and Fall of Saturn
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > High Performance Work Systems > Video: High Performance Work Systems
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Market Basket Case: Zeynep Ton Video > Video: Market Basket Case with
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Holding Global Corporations Accountable: From Nike to Apple > Video: Holding Global Corporations Accountable
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Alternatives to the Traditional Corporation > Video: Alternatives to the Traditional Corporation
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > PDC:High School and College: Necessary but not Sufficient > Video: High School and College: Necessary but Not Sufficient
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > PDC:Life-Long Learning: Moving from Rhetoric to Reality > Video: Life Long Learning: Moving from Rhetoric to Reality
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Around the World:Role of the Corporation in Different Societies > Video
  • Class 3: Out of Crisis:Innovations in the 1980's and Beyond > Around the World:Interview with Ms. Nazma Akter, Labor Leader in Bangladesh, Interviewed by Mahreen Khan > Video:Intervi

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Week 3 Intro > Video

  • Welcome to the third week of our course on shaping the future of work.
  • Remember the diagram that we had in the first chapter of the book that we are reading for this course, where we identified what differentiates firms that are perhaps good for shareholders and produce good financial results, but not such good results for workers compared to those that produce good results for both? We’re going to try to understand what makes these different firms work.
  • Now when we look at these organizations- and we’ll bring in examples like Market Basket, Patagonia, Ideal, Saturn, Costco, Southwest Airlines, and others- we’re not doing that to put these organizations on a pedestal, but really to dig deeply to understand what makes them work, and how can we apply these in the industries and organizations of interest to us.
  • One is just what I said, what are the ingredients of these high road firms? And then, how might we use this understanding to decide whether or not we want to work for an employer that has some of these characteristics? We’ll do that by applying a tool that you’ll find in the Assignment tab of the course.
  • It asks you to go out, find a firm of interest to you or in an industry that you may have a particular interest in working in, and talk to someone.
  • Ask them about the conditions of work that are present in that organization.
  • So we want you to use some of the ideas that you learned from both the Good Jobs Survey, but also from observing and learning about some of the organizations that have good practices that we can then apply in our own organizations.
  • Then work with us and with other stakeholders to make sure that the conditions are present to make it successful.
  • Many of you indicated while you believe in this principle, you believe it’s also going to be difficult to apply it in the current economy given changes in technology, changes in international competition, and the way in which organizations are structured today.
  • So I’ve added some more comments on the discussion board about how we can apply productivity and wage movements at the national level, at the organizational level, even at the individual level.
  • Let’s see what we can do to apply this concept appropriately in the economy today and in the jobs of the future.
  • Finally, there are going to be some new ideas raised by our MBA TAs as they contribute from their own knowledge and experience base from around the world, and from some of our special experts that we will introduce into the course on topics as we go forward this week.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > What Changed in the 1980s and why should we care? > Video

  • The 1980s turned out to be a pivotal decade in the history of work.
  • So let’s take a look at what happened during that decade and why we should care about these developments because it will affect the future of work going forward.
  • The pressures were building, but managers and workers and unions and the government behaved as if the 1960s and 1950s were still in vogue.
  • Now companies in Japan could build autos and other products as productively at lower cost as the United States and build them in high qualities so that they were strong competitors to this country.
  • This nice coincidence of wages and productivity moving together during this time period, you can see it began to fray in the 70s. And then after 1980, they depart, never to return again.
  • I’m going to fire them if they don’t come back to work.
  • He broke that strike and it fundamentally changed the tenor of labor relations.
  • So new workers were starting that work at a lower wage rate than more senior workers.
  • Auto workers would understand this because new hires come in about 30% less than workers who are doing the same work alongside of them.
  • Basically, what happened is pattern bargaining, that engine that helped to spread wage increases across the economy, broke down.
  • The bargaining power that workers got from strikes was no longer there.
  • Companies like Greyhound Bus Lines or Eastern Airlines where strikes occurred, the companies either won the strike or in Eastern’s case, the company went out of business.
  • The challenge that we face today, the challenge as next generation workers you face, is to figure out what is a social contract that might work in the modern economy for you as a modern workforce and for society? We have not figured that out yet.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > The Purpose of the American Corporation > Video

  • What is the purpose of the corporation? This is one of the most controversial and perhaps one of the most important questions that we need to address in this course and that you will need to address as the next generation workforce leaders.
  • From the 1940s through the ’70s and ’80s and into the 1990s, there was a broad view of the corporation that has now narrowed down to focus on maximizing shareholder value in the short-run.
  • Many of them grew up during the Depression, and they were imprinted by the hardships of that time as well as a commitment to community service that was embedded in them during World War II. So they had a particular view of their responsibility.
  • Peter McColough graduated and went to work at Xerox, worked his way up through various managerial capacities, became CEO in 1968.
  • They were among the first to develop, for example, quality of working life programs and quality circle improvements to improve productivity and to compete with growing international competition in the 1970s and 1980s.
  • So it’s not an accident that in 2002, Ann became the CEO of Xerox, one of the first women to rise to that level of authority in American industry.
  • Quote, “Since our earliest days, Xerox has embarked on a never ending journey to demonstrate that good business and good citizenship are not only compatible but are synergistic.
  • ” The report then goes on to talk about customer satisfaction, innovation via patents, community participation, avoidance of workforce injuries and so on, employee participation in community affairs all as part of what they believe are the responsibilities of the modern corporation.
  • “Corporations are chartered to serve their shareholders and society as a whole.
  • The other stakeholders in the corporation are its employees, its customers, its suppliers, its creditors, its communities, where the corporation does its business, and society as a whole.
  • So the Business Roundtable says, “In our view, the paramount duty of management and the board of directors is to the corporation’s stockholders.
  • The notion that the board of directors must somehow balance all of these other stakeholder interests fundamentally misconstrues the role of the directors and the responsibility of the corporation.
  • Fisher Black and Bob Merton at MIT and their colleague Myron Scholes at the University of Chicago had developed a formula for better ways of pricing options, that is shareholder stock, so that you could use stock options to compensate for CEOs.
  • Then colleagues at the Harvard Business School published a number of papers saying, we ought to tie shareholder value to CEO compensation through the use of stock options.
  • You saw the CEO compensation grow from what used to be about a ratio of 30:1- that is, the CEO earned about 30 times the average employee in the firm- to today, where it’s well over 300:1.
  • Well, what was the consequence of all of this? One of the examples that we could turn to is another venerable company, Stanley Tools, a company that was a household term because of every toolbox in America had good wrenches and other tools made by the Stanley Corporation in Connecticut.
  • It was a very socially responsible company until the board of directors got taken over and someone said, let’s really focus on shareholder value.
  • So a new CEO was brought in place and started to lay people off not as a last resort and because of economic necessity, but as a preemptive step to try to boost shareholder value.
  • Does this work for the future? Does it work for your generation? That’s a question that you will need to address as you shape the work, the workforce, and the corporation of the future.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > The Changing Role of the Corporation: Interview with John Reed > Video

  • The role of the corporation in the US has changed quite a bit, and I’ve witnessed some of this change.
  • My own personal view is businesses’ responsibility is to create customers, satisfy the customer needs, and do so in a way that produces decent financial results on an intermediate to longer period of time.
  • I would say by maybe 15 years later, the investors had taken control, and they have a very different set of objectives.
  • I think what happened is, first of all, I think there was an extended period of time when stock market didn’t give very good returns.
  • Boards were changed, and pretty soon the shareholders were in charge, and what they said was: look management, we don’t care what you pay yourself, we don’t care how many jets you have flying around, but we want the value of the stock to go up in a very nice way and a very predictable way, and we want it next quarter.
  • By the way, it would be nice if you would tell us, in anticipation, what it is you might be earning next year, next quarter, so forth and so on, something I never did.
  • We understand the focus is more on shareholders and so on, but thinking about the role of the corporation in the broader economy and society, what do you think are some of the second and third order consequences of this change? I think the biggest consequence is you’re getting very short-term.
  • A CEO can say, look guys, I’m not going to maximize returns over the next two or three quarters, but I am going to maximize them over a period of time, and just begin to adjust expectations.
  • I think shareholder value has a place, but it is a factor amongst two or three, and I think the most important thing is to expand this time frame a little bit.
  • Don’t say, hey, I’m not interested in how the stocks are going to perform, but let’s say, I’m more interested in how it’s going to perform over the next 18 months.
  • The CEO is going to have to give voice to that, because if the CEO doesn’t change his or her conversation, it’s going to be very hard for lower level people within a company to start taking a somewhat broader and longer look at things.
  • We are in the business here at MIT of educating the next generation of corporate leaders and CEOs.
  • What role do you think institutions like ours should play in this whole process? You have to get the conversation going.
  • In other words, if people come in and simply say, hey, the only thing that counts is shareholder value, and they don’t think about it, and they don’t talk about it, and they don’t say, well, what are the implications of that? Well it’s like going to school and saying the only thing that counts is grades.
  • Now, what are some of the other values that need to be thought about, and what is the juxtaposition? Because if you get the conversation going, then each manager as he or she goes out into the world, will begin to have a more nuanced understanding of what it is they’re trying to accomplish, and they’ll begin to bring some balance.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Rise and Fall of Saturn > Video: The Rise and Fall of Saturn

  • If you would have been driving through the hills of Tennessee about 40 miles south of Nashville on I-65 in the 1990s, you would have come across a very curious exit called the Saturn Parkway.
  • That was the entrance to the Saturn Corporation, one of the boldest, most innovative, new experiments in labor management relations and organizations of the past 30 years.
  • So let’s take a look at what Saturn was all about and why it failed.
  • Well, Saturn started in the 1980s when a number of innovative labor and management leaders said, we’ve got to adjust the way in which we work.
  • General Motors came to Donald Ephlin, who was the vice president of the auto workers union, and said, we can’t build a small car in the United States competitively.
  • Why don’t we take a look if we couldn’t take a clean sheet of paper, give it to some folks, and see if they can come up with a new way to do this.
  • I think they visited 75 different companies in the US and abroad. And through all of this the overpowering thing was that there’s a different way of working with people.
  • They created Saturn as a new kind of company and a new kind of car.
  • Only about two or three years after it rolled the first car off its assembly lines, Saturn rose to the top of the customer satisfaction ratings.
  • Saturn enjoyed in the ’90s a level of quality performance, a level of brand loyalty, that the rest of General Motors had not achieved.
  • What happened? The traditionalists within General Motors and within the auto workers union really didn’t like it.
  • You didn’t have a lot of deep support both within the UAW or among General Motors in Detroit for Saturn.
  • So Saturn’s sales and productivity began to decline.
  • Without a new product, Saturn was going to lose market share and began to lose market share.
  • In 2008, General Motors closed down Saturn as part of its restructuring activities.
  • So what lessons should we learn? I think there are three lessons that should influence how we think about bringing about innovations and new ways of working going forward.
  • They said, no individual could come up with this innovative design, but if we all put our heads together, and we go around the world and look at best practices, we can create something new, something that no one else could have imagined in ways that we can work together.
  • If you’re going to try new ideas, and you’re going to create new ways of working together and new organizations, build in a strategy for sustaining that innovation right from the beginning so that it will have legs that goes on into the future.
  • Again, as you go forward, remember these three lessons from the Saturn Corporation.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > High Performance Work Systems > Video: High Performance Work Systems

  • First of all, it’s been roundly criticized by Wall Street for not expanding fast enough, not growing fast enough, but using its retained earnings to share them more equitably with their employees than growing the airline.
  • Third, it has the best customer service of any airline in the country, and it builds that customer service by engaging employees in successful ways.
  • So Southwest does get good ratings from its employees, and now even it gets good ratings from Wall Street.
  • So this is from a Glassdoor survey where employees can voluntarily offer their assessment of their companies and their CEO.
  • We can make companies, design companies that are successful for employees by listening to them, by engaging them, by engaging in the teamwork that Southwest provides, as well as producing high quality services and highly profitable companies.
  • Let’s dig a little bit deeper and understand what the difference is between a high road and a low road company.
  • Walmart has been successful financially, yet Walmart has the tightest controls on its employees.
  • So here’s a company that works for shareholders, but is very tough on its employees.
  • It has a very long tenure of its employees, because they learn about the business and they become more productive over time.
  • Both can be reasonably successful financially, but only one can be successful financially and provide good jobs and good opportunities for its employees.
  • There’s a low road, there’s a high road. Let’s review, just how do you get these high road practices? How can you build companies that are successful for both investors, for employees, and for customers? Well, it starts by selecting employees both for technical skills and for teamwork skills, so that they’re ready to work together effectively with their colleagues.
  • Secondly, it requires continuous training and investment of front line workers as well as middle managers and supervisors.
  • It requires us to work together to build a culture of trust at the workplace, to engage employees, and to get them to want to cooperate with each other to get the jobs done.
  • It requires compensation systems that align the incentives so that employees share in the income and the productivity that they help to produce by profit sharing or various kinds of incentive systems.
  • It requires, if unionized, to have labor management partnerships where labor and management work together, and the union leaders are taken into the confidence of management representatives to get the job done together.
  • We’re going to see in another video, my colleague Zeynep Ton talking about a grocery chain here in the Northeastern part of the United States that has been very successful in building a company that works for shareholders as well as customers and employees.
  • The employees and managers revolted to save the company from a change in strategy in the summer of 2014.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Market Basket Case: Zeynep Ton Video > Video: Market Basket Case with 

  • Over the course of six weeks in the summer of 2014, Market Basket employees, joined by their customers, protested against the firing of their beloved CEO.
  • They risked their jobs, their livelihoods, and they brought the business to a halt.
  • When the ownership changed, you started asking the questions, what’s going to happen with our benefits? What’s going to happen with our pay? And when you start taking away that factor of focusing on people, the entire business model starts to fall apart.
  • The workers were fighting for a business model that works for everyone- for them, for their customers, and for their shareholders.
  • The first lesson is around creating customer and employee loyalty in a pretty unlikely setting.
  • Local supermarkets are not necessarily known for treating their employees or customers well.
  • They are known for offering bad jobs with poverty level wages, unpredictable schedules, and very few opportunities for success and growth.
  • The second lesson that emerged from Market Basket is the importance of employees and what they do for efficient, low-cost operations.
  • You see, Market Basket pays its employees decent wages.
  • Market Basket designs the jobs in a way that allows their employees to be more motivated, that allows them to be more productive, and that allows them to contribute more to the success of their company.
  • Who wouldn’t want to work for that? If you go to a Market Basket store, you’re going to see a lot of employees around.
  • So that they have enough time to engage in continuous improvement, come up with suggestions to reduce cost and increase customer service and sales.
  • Appropriate staffing levels is just one of the job design decisions that motivate employees, make their jobs better, so make them happier, that lead to happy customers, because they receive better service.
  • That brings me to the third decision related to Market Basket, which is even in a low-cost supermarket setting, it is not only possible but highly profitable to create a business model that creates value for customers, employees, and investors at the same time.
  • You have 8 owners and shareholders, and then you have 25,000 employees.
  • Then you have the further impact of vendors and customers.
  • Now, you might wonder, is Market Basket an exception? Is it unique? Well what Market Basket employees did was pretty extraordinary.
  • Market Basket’s business model is hardly special.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Holding Global Corporations Accountable: From Nike to Apple > Video: Holding Global Corporations Accountable

  • A big question we have to face is how do we keep these global corporations accountable for providing good jobs and decent work in far flung places? Let’s do it through a company we all know and love- Nike.
  • First, they started in Japan, and Korea, and then Indonesia, and Vietnam, and China, and Bangladesh.
  • They were famously found having child labor, to having unsafe working conditions, to having long hours of unpaid overtime in their factories abroad. And what was Nike’s response? Well, wait a minute.
  • He said, Nike’s products have become synonymous with slave wages, forced overtime, and arbitrary abuse, and we need to do something about it to change that image, or we’re going to suffer as a company.
  • They established minimum wages, and rules against sexual harassment, and rules for maximum hours and overtime, and freedom of association.
  • They went on and worked with a variety of non-governmental organizations, or NGOs in these countries who are advocating for improved employment conditions, safety standards, and in some cases, environmental standards in these factories.
  • They shared this audit data with academic researchers, including a team of researchers here at MIT, where they started to analyze the data and learn what works and what didn’t.
  • You can find the audit scores, and you can find an analysis of what is working and a very frank analysis of what isn’t working.
  • Nike and other companies like Hewlett Packard, and other electronics firms, and other consumer companies that followed in Nike’s footsteps did it because there was transparency and pressure that was being brought to bear to get them to do so.
  • So they work long hours, and they’re forced to work overtime and all kinds of bad things happen after that.
  • There’s an organization on college campuses around the country called United Students Against Sweatshops, and they have put pressure on their universities- universities like Cornell and Brown and Wisconsin and others to make sure that they’re only buying their university logo apparel and athletic wear from companies that have these kinds of just supply chain practices in place.
  • If they all work together, and build a sustained effort to improve the conditions, and then produce the data that makes it all transparent for us as consumers, we can make a difference in improving the conditions of very low wage workers in many developing countries.
  • Apple, our computer friends, and iPhone friends, and iPod friends are about two decades behind Nike.
  • If you were to write to the CEO of Apple, what should Apple learn from Nike’s experiences? And then, more broadly, what can you do to hold companies accountable for their global operations? How can we take responsibility for making sure that every shirt, every tie, every sweatshirt that we buy is made in a just supply chain, and keep asking, and be willing to pay for products that are made under fair working conditions? We can do that individually as consumers, and we can collectively set the norms that essentially say, to any company, if you want our business, then you’ve got to demonstrate that you are providing safe and healthy working conditions, and fair wages for people wherever they make these products.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Alternatives to the Traditional Corporation > Video: Alternatives to the Traditional Corporation

  • One of the reasons that high road companies like Saturn and others often don’t get carried on is that once the founders leave, the next generation of leaders don’t carry on the same practices, and so the culture goes back to more traditional organizations.
  • One of the best known companies that is a benefit corporation is Patagonia.
  • Its CEO and founder, Yvon Chouinard, says, Patagonia is trying to build a company that could last 100 years.
  • Benefit corporation legislation creates the legal framework to enable mission driven companies like Patagonia to stay mission driven through succession, through raising capital, through changes in ownership.
  • 22 states now allow companies to incorporate as benefit corporations within their boundaries.
  • Well, employee ownership companies build a commitment to being successful financially both for traditional investors and for employee owners right into the structure and governance of the firm.
  • Employees often have representatives on the corporate boards of directors, but the key to success of these companies is to make employees feel like owners by building a culture of engagement, of ownership, of encouraging employees to make suggestions for improving the operations in the performance of the organization, and therefore aligning the incentives through condensation and through the culture of the organization.
  • So employee ownership companies have spread across the country.
  • The key to employee ownership is to make sure employees are involved, and to also worry a bit that they don’t to put all of their financial resources for retirement into the same company.
  • A cooperative is a company that has lots of owners that pool their resources to get some job they all need done done together.
  • Here in Cambridge we have the MIT coop and the Harvard cooperative society, bookstores that sell books and reference material and clothing to our students and to our faculty.
  • Probably the most famous one is the Mondragon set of industries, headquartered in the Basque region of Spain, with companies that range from manufacturing, to retail, to high tech, to financial institutions.
  • In doing so, not only might you build organizations that work for investors, customers, and employees, but maybe ones that help to sustain our planet.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > PDC:High School and College: Necessary but not Sufficient > Video: High School and College: Necessary but Not Sufficient

  • Today I want to talk about the importance of the basic education system, and the theme is going to be that it’s a necessary, but not sufficient strategy, for education for the future.
  • We start in kindergarten and go through grade school through high school.
  • Hopefully go on to a two- or a four-year college and maybe even to graduate school.
  • High school graduates get to about $34,000 a year, and college graduates get to about $55,000 a year average income.
  • So the key lesson of this graph is, by all means, every one must finish high school and hopefully go beyond that.
  • This graph shows the difference in median earnings of high school and college graduates, and you’ll see that it’s been growing over time.
  • The gap between high school and the college degree earnings has grown, and so there’s increasing returns to college even given the increased cost of college.
  • This graph shows that adjusting for the increased cost, that gap is still growing and the increase in returns to college, particularly since around 1980, have been growing by very, very large numbers.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > PDC:Life-Long Learning: Moving from Rhetoric to Reality > Video: Life Long Learning: Moving from Rhetoric to Reality

  • If you can while you are in high school get internships, co-op jobs, part-time jobs in the summer or even during the school year if that’s possible so that you can begin to see what the world of work is like.
  • Dr. Fico says, “There are plenty of good jobs in my sectors- manufacturing and law enforcement.
  • They want technical skills, and they want a much higher caliber of job readiness and character.
  • They want a devotion to the job and a commitment to really doing a great job.
  • ” What about those of you who are going to go on for technical degrees in community colleges after high school? Well, here the key, from all kinds of research and evidence, is that the most important thing to do is to look for programs that are well-linked to the employers in your region and in the industry you want to work in.
  • Employers working with community colleges and vocational schools, designing the curriculum together, providing advice and mentoring for students, and then helping to make sure that the skills that are being taught are the modern skills needed on the job.
  • The third feature of a successful community college and vocational school is that they have success in placing graduates not only in that first job but with employers who have career pathways, that is job ladders that allow people to continue to learn and to advance over time and maybe to come back for refresher courses as needed.
  • How about college graduates and college students? Well, the thing to do here is to make sure again, like in high school, one gains experience while in school, looking for those summer internships or co-op placements in schools that provide that, so that you can really start to build your professional network while you’re still in school.
  • The evidence is very clear that having a supervisor or a mentor from somewhere else in the organization that helps you learn the ropes and can then vouch for you for other jobs as they come along is really critical to your future success in that organization.
  • Take advantage of all the universities, like MIT and other great schools, that are now providing online learning opportunities so that you can deepen your knowledge and broaden out your professional base over time.
  • Ask your employers to make sure that you have opportunities to go to professional meetings and to stay current in what is going on and build those networks so that you have others who are sharing the same experiences, and you are learning together.
  • Am I staying current? Can I find a job in my profession outside of my current employer? And do I keep my network strong and up to date so that I can draw on the assistance of other people as needed? “.

Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Around the World:Role of the Corporation in Different Societies > Video

  • In the previous video, we focused on how the corporation is changing in the United States.
  • What about corporations around the world? Turns out there’s quite a bit of variation both across countries and over time.
  • Corporations in the United Kingdom, Canada, Australia tend to follow the US model of putting shareholder value very high in their priorities.
  • So the gap between CEO pay and average worker pay isn’t nearly as much as we have in the United States.
  • Some other countries, like Germany and Norway and Sweden, have tended to take much more of a multiple stakeholder view of the firm and its responsibilities.
  • In Germany, the board of supervisors, equivalent to boards of directors in the United States, is made up of large representatives of large financial institutions and representatives of employees, sometimes equal numbers and sometimes different percentages.
  • At the workplace level, there are consultative bodies called works councils, elected bodies elected by blue collar workers, production workers, white collar workers, managers, and supervisors, all there to provide advice to the company on its human resource and employment practices.
  • The company has to listen to the works council when it makes changes in employment policies.
  • Then corporations are also very active in training, working together at the original level with vocational schools and with labor to build apprenticeship programs so that they have an adequate supply of workers for today’s economy and for tomorrow’s technology and economy.
  • So in Germany and in European countries, you tend to see much more of the corporation taking a responsible role for these kinds of activities.
  • We see much more investment in training and development of employees from within.
  • So some corporations open to international competition have moved more toward the American model in recent years.
  • That’s led to lots of conflict over the appropriate role of the corporation in Korea.
  • Let’s let workers help us to figure out how we can expand into new industries and diversify this company and become part of the world economy.
  • A company by the name of Nokia, known well in the telecommunications industry and in the phone business, had a very difficult time adjusting to changes in its markets.
  • So it’s had to restructure and lay off a lot of workers.
  • As it did so, it decided that it would allow workers to take some of the product development ideas that they had been working on and some of their own ideas for new directions for the company and start their own companies.
  • So let’s get on with thinking about what role do we want the corporation in our society to play today and tomorrow.

  • Class 3: Out of Crisis:Innovations in the 1980’s and Beyond > Around the World:Interview with Ms. Nazma Akter, Labor Leader in Bangladesh, Interviewed by Mahreen Khan > Video:Intervi
  • Prior to starting the Ph.D., I worked as a policy advisor with the Dutch government and Bangladesh between 2013 and ’15.
  • During the course of my work, I interacted with many stakeholders working on occupational safety and health issues at the workplace and workers’ rights, particularly in the Bangladeshi textile sector.
  • Amongst the stakeholders, was Miss Nazma Akter a prominent member of the Bangladesh labor movement.
  • She began her working life at the tender age of 11, in a small garment factory in Dhaka.
  • AWAJ Foundation is an organization which fights for workers’ rights and helps settle worker disputes in factories.
  • Despite the hardships of working in the garment sector, Miss Akbar is not against garment factories, which she believes empower women by giving them greater choice and opportunity.
  • She is resolutely against exploitative and dangerous working practices, and strives to ensure that women get treated fairly.
  • I had the opportunity to speak with her, in Bangladesh in January 2016 on a number of current issues facing the Bangladesh labor movement.
  • As a worker in Bangladesh, Ms. Akter is vocal on the subject of the exploitation of cheap labor by the first oil companies.
  • Eloquently puts forth the conflict between the vested interests groups and Bangladeshi workers in the factories.
  • As you know, the most of the production country where producing the garments is the buyers an international and fresh and original.
  • If you’re addressing this kind of world, there is no human interaction, there is no worker [INAUDIBLE], there is not decent working conditions.
  • This is the global problem who is created by the global people and global business community and the legislation.
  • How people have to get the decent working condition.
  • Secularism and globalization is a big, bad impact for the general people and for the working people.
  • She goes on to elaborate on the specific challenges she faced in her work, and the kind of disputes she has observed.
  • As you know, the workers has main fundamental right to collective bargaining that negotiation and the union right.
  • Which is very challenges and difficult for us, because when the workers are organize the union, most of the case there are finding that union busting from the men is meant.
  • In many cases, they’re so difficult, and challenges many workers are the facing.
  • Corruption is it one of the big problems, and government is not serious about the workers issues, than the business profit.
  • It will be helpful for the productivity, as well as the workers’ happiness.
  • It will not work, because the manufacturer always want [INAUDIBLE].
  • Maximum things, like when we are asking for the workers benefit.
  • INAUDIBLE] The Rana Plaza incident, where over 1,100 workers died when their factory collapsed, resulted in many initiatives- both within Bangladesh, and abroad. And money poured in from many sectors.
  • The compact was an agreement signed between the governments of Bangladesh, the EU, and the US, following the Rana Plaza collapse, in an effort to improve working conditions in the textile sector.
  • After Rana Plaza collapse, lots of initiating taken by Bangladesh, and all the world.
  • The money should be utilized the right person, workers as the industry.
  • As you know, the third Compact Sustainability meeting will be held on 28th of January, Dhaka, Bangladesh.
  • We are expecting- to the Compact meeting- the Bangladesh government, and you’ll get an American delegate.
  • As the workers representative, we need a constructive union.
  • If there was one party to initiate it, it will not work.
  • That is the important issue, because they don’t get proper education and proper food and nutrition.
  • My request to all the young consumers who will be the next generation leaders of taking that responsibility- you have to respect your young friends and colleagues who are working in Bangladesh, how to ensure their [INAUDIBLE] end of their life, and workplace safety and other issues.
  • So please try to be ensured and while carefully to safe working conditions and decent living conditions.

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