Category Archives: Concepts

Redistributing resource rights in a resource-dependent economy: The case of the Faroese fisheries reform

By Árni Jóhan Petersen

The distribution of rights to natural resources is a complex and challenging task to solve because of the many stakeholders involved. At present, the Faroe Islands are in the process of reforming its fishing system, which undoubtedly will have a significant impact in a country where 95 percent of exports are fish products.

The case of the Faroe Islands can give us insights into how changes in the local economy unfold. The reform will not only change the local fishing industry but also the political landscape and the Faroese population.

Other countries in the region (e.g. Iceland, Greenland, Norway and Scotland) are observing the developments, as they could influence the constellations of their rights to natural resources. The topic is also of great relevance to academics and practitioners because of the economic, political and social challenges and opportunities that necessarily follow from such reforms.

Background

Since 1994 fishing rights in the Faroe Islands have generally been distributed on the basis of past performance (“grandfathering”). Licenses have typically be running for 10 years, but the 10-year period was typically deferred by one year, each year, whereby the licenses tended to become permanent. This led to capitalization, with licensed vessels changing hands for a price far exceeding the commercial value of the vessel.

In order to halt these developments the Faroese Parliament in 2007 decided to stop the annual renewal of the 10-year licenses, so that all existing licenses will expire by 1 January 2018. Thus far, less than a year before the expiry of the existing licenses, a new model has yet to be decided upon. However, the politicians in charge of the reform are now working hard in order to have a new system in place by 1 January 2018.

The Faroese government has required that a new reform should be market-based, and that recommendations for a reform should be developed within the political framework. Historical entitlement, or grandfathering, has been excluded as a possibility, and instruments like “beauty contests” are not to be considered in a new system. There are different opinions as to which solution is the most suitable – some of these will presented below.

I, however, will argue that a solution such as “beauty contests” might be a feasible strategy and that such as strategy could benefit society beyond future expectations – both economically and socially.

Historical entitlement to a market-based allocation of rights to fish the quotas

A commission appointed by the Minister of Fisheries, Høgni Hoydal, has argued that the political incentives of the reform are to maximize profits, increase public economic gains, and ensure that future fishing is environmentally sustainable. In doing so, the objective is to move away from the current grandfathering system to a more market-based system.

In October 2016, the same commission finished a report in which it recommends that a transition period (of, for example, 10 years) is introduced, meaning that rights will be recalled continuously over this period of time and subsequently distributed on market terms.

The commission’s report demonstrates a potential solution where fishing rights are to be divided into short term (1-year), medium-long term (5 years), and long term (10 years) licenses with a transition period of 10 years (2018-2027). 23 percent of the allotted quantity will be auctioned every year. The rationale behind this approach is based on the assumption that current companies in the fishing industry should have the opportunity to adapt to the changes caused by the new scheme while making sure that the industry will not be impaired in the meantime. With this model, the grandfather mechanism is partially preserved throughout the transition period.

Market-based: all rights recalled by 1 January 2018

Assistant Professor and Economists at the University of the Faroe Islands, Jóannes Jacobsen, who has been an active contributor to the debate on fishing reforms, prefers an alternative solution. He argues that all rights should be recalled by 1 January 2018, as already decided by Faroese legislators, and subsequently be distributed on market terms as short-term, small quotas.

The idea is to abolish the current system and establish a public auction where fishing rights are sold in as small as possible “packages” (e.g. every “package” equals one trip for one vessel). With such a system, all Faroese citizens will have the right to bid in on the auction for these fishing rights. This approach is based on three convictions:

1) It is democratically the best solution because every Faroese citizen has the opportunity to bid in, which is in contrast to the current system where political authorities distribute fishing rights to companies with authorized vessels.

2) It is the best solution in terms of economic gains, as both theory and praxis demonstrate that competition for production resources leads to improved commercial results.

3) It is a fairer solution because all Faroese fishing rights are “property of the Faroese people” (according to Faroese legislation), and that the Faroese people has the right of the market value of these rights. This is in stark contrast to the current system where rights are distributed to a few selected ship owners who have a “permit” to fish.

The ship owners and grandfathering

Needless to say, the companies currently involved in the industry would prefer to continue with the grandfathering scheme because it – according to the industry – facilitates long-term investments and innovation within the fishing industry. But, are there any alternative solutions that would encapsulate a broader preservation of all stakeholders’ interests? Or does it have to be one of the above-mentioned solutions?

Alternative solution (or supplementing elements)

Some solutions have not been assessed by the commission because of clear political incentives and requests for the framework to only consider purely market-based solutions. These market-based approaches are primarily concerned with optimizing and maximizing the economic benefits (e.g. highest bidder wins the rights), while other parameters are left out of the equation.

One supplementing solution could be to implement elements from a “beauty contest” (e.g. as used to regulate the Faroese oil industry) where companies bidding on fishing rights are obligated to abide by certain preconditions set prior to the auction.

Beauty contests in the Faroese fishing industry could be stakeholders bidding on other societal benefits. The licenses for oil explorations in the Faroe Islands were not auctioned, but administratively assessed by the competitors’ exploration scheme (e.g. commitment to safety, environment, shoot seismic and drill exploration wells), and their incentives to improve development progress of the Faroese industry in general (e.g. allocating resources for education, innovation and research etc.).

One of the more relevant considerations is the equitability of the system, where a small number of shipowners reap considerable benefits from a commonly owned resource. This might be remedied by introducing royalties on the catch, or by levying a special resource rent tax on their extraordinary profits.

Consequently, beauty contests in the fishing industry would bind the right-holder to generate some societal benefit that otherwise would not have been achieved in other systems (e.g. market-based). However, such a system would necessarily lead to less transparency than a market-based system, because here, industrial policy clashes with the market where the political objectives are not always clear and accountable.

If this should be an alternative solution, I would argue that that this would take time to develop and implement in the Faroese fishing industry because such preconditions are not used today. Hence, this approach will require a discussion in which companies and authorities will have to identify relevant and suitable parameters to include as preconditions (for a similar argument in a different context see also the recent BOS blog entry by Haack & Schoeneborn).

What are your thoughts? Any recommendations? Which solutions do you prefer? Do you have an alternative solution that should be considered?

 

Quick facts about the Faroe Islands

  • Approximately 50,000 inhabitants
  • 18 islands
  • Located in the in the North Atlantic Ocean
  • 1,399 square kilometers
  • 274,000 square kilometers of sea area
  • Self-governed part of the Danish Kingdom
  • Language: Faroese
  • Exports of approximately 6.5 billion DKK
  • 95% of exports is fish
  • 20% of export is pelagic fish
  • Five fishing companies have the rights of pelagic fishing
  • GDP is approximately 15 billion DKK

Five different distribution systems

  • First come, first served
  • Lottery
  • Historical entitlement (or grandfathering)
  • Beauty contests (in which other parameters are supplemented the bidding offer)
  • Market-based

Árni Petersen is PhD-Fellow at the Department of Management, Society and Communication at Copenhagen Business School. His PhD project sets out to explore the relationship between responsible business and governance in the Faroese Oil Industry by reflecting on the ways in which involved businesses act as governance takers and governance makers.

Pic by DavideGorla, Flickr

Crowdfunding for Sustainability: Creating a platform for sustainable ideas

By Kristian Roed Nielsen.

Crowdfunding as phenomenon is strange as it fundamentally boils down to strangers supporting strangers for causes, products or services that have not yet been realized and of which they have little direct oversight or control. Despite this oddity, crowdfunding is growing rapidly.  Just between 2013 – 2014, approx. €2.3 billion were raised, enabling a vast number of enterprises to grow and ideas to become reality. As engaged scholars, the question thus becomes: how to utilize this phenomenon as a means to drive sustainable ideas and projects?

Early testbeds for sustainable crowdfunding

The examples of EcoCrowd, GreenCrowd, and Kiva all point to the potential of crowdfunding in driving both environmental, but also social development and innovation. The case of the German crowdfunding platform EcoCrowd is especially interesting as it illustrates how public finances can be used to create platforms dedicated to tackling environmental challenges by co-supporting their development.

The added benefit of these types of platforms is that they, if successful, become self-sustaining resource centers for further sustainable ideas and ventures. More precise, these platform allow citizens to engage directly in driving sustainable change by supporting, for example, community projects. One example of this includes the The Peckham Coal Line urban park that sought to convert the old raised Peckham coal line in London into a raised urban park via an online campaign on the civic crowdfunding website SpaceHive.

The Peckham Coal Line further illustrates how policymakers can draw-upon the strengths of crowdfunding by co-financing community projects if they hit a certain level of financing. The Peckham Coal Line ultimately successfully raising £75,757a of which government funds represented £10,000 in backing. In this way, community projects could be driven via the entrepreneurial ideas of members of the community.

Future platforms

The future of these platforms of course very much depends on many factors, such as the quality of the campaigns hosted. Prior successful campaigns show that people are indeed willing to engage and raise significant amounts of money. But this requires that people see value in the campaigns hosted. If to many campaigns fail or there simply aren’t enough to inspiring further action, then the platforms will slowly decline.

Therefore, I propose that a collaboration between sustainability-oriented organizations – like Sustainia – represent a great opportunity to find these inspiring campaigns. Sustainia with their Sustainia Awards have a huge database of sustainable ideas and projects just waiting to be supported and scaled. One could even imagine a “Peoples Choice” award where individual vote with their valets for the solution, technology or project they found most inspiring and worthwhile. Sustainia could thus create a platform rich with innovative ideas and projects and “the crowd” can offer the support needed to truly bring these ideas to life.


Kristian is PhD-Fellow studying the potential of crowdfunding in driving sustainable innovation. He is home to the Department of Intercultural Communication and Management at Copenhagen Business School. Follow him on Twitter.

Original Pic by Tommy L, Flickr, changes made by BOS

Don’t Blame 2016. Be 2017.

By Lara Hale.

I do not need to inform you about the major events of 2016: Devastation in Syria, Brexit, President-Elect Trump, drug wars in the Philippines, and so on. For a refresher, see The Guardian’s summary of 2016’s top global development stories. In the past month, news sources and social media alike have been flooded with tales of The Evil 2016, anthropomorphizing the entire year into a wicked, plotting villain. Curses, angry music, and obscene memes have been directed at the year. Certainly, as a sustainability researcher, I have been taken aback by the threats to environmental and political progress made thus far. But is it enough to leave these events in 2016 in hopes of a better 2017? Would we not have a better chance of a brighter 2017 if we considered our own opportunities for action rather than blaming an arbitrary bracket of time?

Activism for Sustainability

On the one hand, there was social sustainability progress in 2016. For example, it has become more socially and scientifically acceptable to link environmental disasters to the aggravation of political conflicts, such as in the case of extreme drought preceding the Syrian civil war. On the other hand, in some sense, I believe the essence of active citizenship in sustainability aims has been lost on us. In the groundwork definition of sustainable development, participation is highlighted as a founding pillar: political and financial equality is desirable for encouraging the participation of all citizens in development efforts; the broader participation of individuals, scientific bodies, and non-profit organizations improves societal knowledge and thus development; and local, community-driven citizen participation is needed to contextualize sustainable development. But say that you are a citizen who is relatively politically and financially privileged; has knowledge and a voice to express it; and is rooted in some form of community, be it urban, rural, or something in between: What does it mean to participate? To be active? Well, part of being an active participant is that you have the freedom and responsibility to determine for yourself the nature of your involvement. That said I would like to offer some considerations for 2017 and beyond, based on recent citizen engagement developments.

Nudge or Fudge?

The past several years have seen a rise in the design of choice architectures that encourage “good” — including  sustainability-oriented — behaviours. In other words, organizations, including governments, are working to set up decision making scenarios in ways that nudge you to make decisions they consider best for society. General examples of nudges in choice architecture include signs at your work entrance gently reminding you that choosing the stairs over the elevator is better for your health, or more aggressive devices that are programmed to shut off your apartment’s electricity when you have exceeded a desired usage level. Default rules, another form of choice architecture, refer to which choice is set up automatically for you before you make any active interference: such as whether you are signed up for your company’s 401k plan, or whether you demand renewable energy sources (as opposed to fossil fuel) from your utility company. When these scenarios are designed to favor environmentally-friendly settings, they are referred to as green default rules. Nudges work by suggesting choices for you, and default rules work by setting the automatic choice for you. Note the theme “for you”. Organizations are becoming more sophisticated at understanding and developing these techniques, as can be seen in the 2011 report for the UK government on influencing behaviour through public policy.

Oh hold up! What do these people think they are doing influencing our choices?! Well, unfortunately we have a tendency to not choose as we intend to when left to our own devices. For example, the green gap is a disappointing consumption pattern referring to the disconnect between the environmentally-friendly products consumers testify they will buy and what they actually purchase. We are also victims to the status quo bias, the phenomenon wherein we are most likely to accept whatever we are already accustomed to (harking the idiom “go with the flow”, ironically born out of the hippie era). As such, there certainly have been successful choice architecture outcomes, including with health food and waste disposal. I would also, however, ask you to question the longer-term, larger-scale impacts of allowing yourself to be distracted from active participation. For example, there is already some question as to whether Trump’s election was in some part due to Clinton’s label as the “status quo” candidate, furthering the assumption that business would carry on as usual and triggering a drop in voter turnout, down 2% from 2012 and 5,6% from 2008. Rather, it is those disrupted in their lives who dislodge the status quo, crack the mold, and form a new playing field.

The surprising thing to me about the recent popularity of choice architecture is failure to acknowledge that the choices being offered are not born out of the blue, dreamed up in a peaceful organizational slumber. Nay, these sustainability visions come from the same kind of dedicated activists who have been breaking the mold (arguably in the “bad” way) in 2016. For example, it is brilliant to simply automatically sign up everyone in the neighborhood to order electricity from renewable sources. But without a vigorous citizen-driven activism driving renewable energy first after the Oil Crisis 1978-9 and again with increasing climate change awareness, there would be no renewable energy production sites, no technologies for their construction, no advancement of their efficiencies towards market competition. It took a lot of work to offer the transmission of solar power to our comfortable couch-side lamps and laptops. Or another example is nudging communities to plant their outdoor spaces as bio-diversity supporting, fresh-air and nutrition-producing urban gardens, or nudging consumers to purchase locally produced groceries. But without the desperation of food shortages and community-driven reorganization of food access post-World War II, the concept of urban gardens and community-supported agriculture (CCS) would not exist.

Break on Through to 2017

Not surprisingly, such sustainability activism exists in 2016 as well. Here in Denmark, prevention of food waste has reached the national agenda and promises to expand further. All this, triggered by the persistent activism of Selina Juul, founder of the organization Stop Spild af Mad (English: Stop Food Waste), and the joining of more activists, such as 17-year old Rasmus Erichsen, founder of the app Stop Spild Lokalt (English: Stop Waste Locally), in what can be considered a social movement. Looking back again on 2016, we have reason to feel disrupted, enough drive for action. Please continue to engage in social media and write up your own blog posts about it, but also find yourself a practical, positive action that you can take. For me, I’ve chosen to pursue academic research in sustainable building (not practical!), but also to volunteer for trash clean-ups in nature areas and reduce my hot water usage at home. You do not have to make it your career, but you can take action for 2017. You can use your participatory power and be an activist for creating different, better choices for all of us in 2017.5, 2020.3, 2046.7, and beyond.


Lara is a PHD Fellow at the Department of Intercultural Communication and Management at Copenhagen Business School. Her PHD research is part of the Marie Curie network Innovation for Sustainability (I4S), with VELUX as a partner organization. 

Pic by 周小逸 Ian, Flickr

Why Transparency May Not Be Best in Facilitating Corporate responsibility

By Patrick Haack & Dennis Schoeneborn.

Corporate Responsibility (CR) has become an increasingly important issue for business firms across the globe. Yet, implementing and embedding CR tends to be costly. Accordingly, it is tempting for firms to “greenwash” existing business practices with CR policies, reports, and fancy brochures – but without adopting these policies in a substantive way (i.e. what would mean an in-depth implementation in business practices and procedures).

In the same context, corporate transparency is typically seen as the key to make sure that firms would adopt CR practices in substantive form. In contrast, other scholars have argued that a certain degree of intransparency (or opacity) can be beneficial for the adoption of organizational practices. The argument here is that freedom from scrutiny provides space for decision makers to experiment with new CR practices and consider how to implement those practices. This leeway for experimentation, in turn, can then lead to a substantive institutionalization of CR practices – if compared to a more strict transparency regime (that would impede the occurrence of such dynamics to begin with).

In a recent simulation-based study (as part of a larger research project with Dr. Dirk Martignoni, University of Lugano), we demonstrate that a certain degree of hypocrisy and greenwashing, counter-intuitively, can be beneficial to the industry-wide adoption of CR practices. In our study, we explain differences in the ceremonial (i.e. superficial) vs. substantive (i.e. in-depth) adoption of CR practices in an industry with changes of “evaluation regimes” (i.e. degree to which implementation of CR practices are visible to outsiders).
In particular, we look at two evaluation regimes – transparency and opacity – and three levels of adoption – non-adoption, ceremonial adoption, and or substantive adoption. We assume that the evaluation regime can remain stable or switch, due to regulatory changes or industry dynamics. Of the four different possible sequences of evaluation regimes, we pay particular attention to the situation where there is little visibility at first (opacity) followed by greater visibility (transparency), and explore the conditions under which this particular sequence maximizes the prospects of substantive adoption.

Our study’s findings challenge conventional views that a coercive approach focused on the strict enforcement of transparency and accountability would be most effective to the institutionalization of CR practices. To the contrary, our study suggests that, given certain conditions, an initial period of opacity followed by a switch to a more transparent regime can maximize the in-depth adoption of CR practices.
One important practical implication for non-governmental organizations and other critical observers of corporate actions is that a certain degree of greenwashing, at least in the beginning of a CR implementation and learning process, should not be condemned prematurely. Instead, it would be conducive to the institutionalization of CR to steadily maintain and slowly increase pressure towards more transparency – in order to facilitate “ratcheting up” effects toward more substantive CR adoption among players in the same industry.

Please find here a more extensive summary of the article.

Read the original paper:
The paper has won the 2015 Best Paper Award of the Social Issues in Management Division of the Academy of Management. While the paper is currently in a review process, a shorter version can be accessed here. Haack, P. & Schoeneborn D. (2015). Exploring the Institutionalization of Corporate Responsibility: A Formal Modeling Approach. Academy of Management Proceedings, doi: 10.5465/AMBPP.2015.141


Patrick is an Assistant Professor of Business Ethics in the Strategy Department at HEC Lausanne, Switzerland. Dennis is Professor at the Department of Intercultural Communication and Management at Copenhagen Business School.
Pic by Pexels

Towards More Humanly Sustainable Workplaces

By Dr. Blagoy Blagoev.

There are more and more prominent voices calling for management research and practice to focus on the ‘grand challenges’ faced by society. Undoubtedly, one of those grand challenges most talked about is sustainability. Usually, sustainability is thought about in ecological terms. Indeed, a plethora of well-known issues exist at the interface between business and the natural environment, such as CO2 emissions or water pollution to name but a few. Increasingly, corporations are faced with pressing social demands to manage and organize in sustainable ways in order to prevent such problems from happening in the first place. Yet, another, much less talked about dimension is the human side of sustainability.

Breaking the extra-long hours regime in management consulting

The human side of business sustainability refers us to the problems at the interface between organizations and people, in particular, to the potentially harmful impact certain management practices can have on employees and their families. One, especially harmful development in many workplaces concerns the proliferation of extra-long hours regimes among highly qualified professional and knowledge workers. Many such workers seemingly voluntarily accept to work between 60 and 120 hours a week, remain connected to work through smartphones and laptops, and continue to do so even after experiencing severe work-induced bodily breakdowns. Such ‘extreme’ working time regimes have been shown to be detrimental to both individuals and their organizations: they harm employees’ health, productivity and creativity; reproduce gender inequality; and generate higher employee turnover rates and increasing cost for attracting and retaining highly qualified personnel. In short, in the long term, they create an unsustainable workplace environment. Yet, despite such well-known drawbacks, little progress has been made with dismantling extra-long hours regimes and building more humanly sustainable workplaces. Most work-life balance and family friendliness initiatives do not work.

Extra-long hours regimes persist. Why so?

In my doctoral dissertation, I studied the genesis and historical evolution of an extra-long working hours regime at an elite management consulting firm in Germany in order to answer this question. My empirical investigation demonstrated the historical contingency of the extra-long hours regime: Rather than being pre-given, it only emerged out of a strategic shift at the firm that occurred in the late 1980s. I discovered that the main reason underlying the persistence of long working hours at this firm could be found within the distinct self-reinforcing dynamics triggered by this shift. Over time, these dynamics had constituted and continued to maintain an ecology of complementary and mutually reinforcing management practices, business strategies and cultural norms that were all adjusted to and reinforced the extra-long hours regime. The dynamic spread throughout the entire organization and even beyond: It entangled the consulting firm’s clients too.

The way forward: re-thinking the „work-life balance“ approach

The results of my research imply that the dominant ‘work-life balance’ approach of dealing with such problems of human sustainability needs to be fundamentally reconsidered in at least two ways.

First, building humanly sustainable workplaces is a matter of radical and strategic rather than incremental and operative change. At least in the case of consulting firms, the extra-long working hours pattern cannot be isolated from the plethora of organizational practices, cultural norms and the overarching strategy that have historically co-evolved with it. Simply providing work-life initiatives, such as part-time work of flexible working hours, without attempting to change the entire organizational ecology intertwined with reproducing the extra-long hours regime is not likely to achieve much success. Understanding and breaking the logic of the dynamics that maintain this ecology is crucial for change initiatives to succeed.

Second, and related, we need to widen the traditional focus on internal organizational change. In my research, the dynamics in question went beyond the boundaries of the single firm and entangled client organizations as well. This implies that changing the extra-long working hours regime would also require shifts in the interaction pattern between professional service providers and their clients and the various expectations that structure these interactions.

Key is to change the reproducing dynamics of unsustainable workplaces

Dismantling persistent regimes of extra-long working hours remains one of the key challenges for building humanly sustainable workplaces. Whereas previous research has focuses on criticizing such regimes and suggesting alternatives, we are only now beginning to understand the actual mechanisms that are at work to maintain extra-long working hours. The emergent research findings clearly demonstrate that human sustainability cannot be achieved by providing work-life benefits to compensate for an otherwise humanly unsustainable workplace environment. Rather, the key lies in changing the entire web of interdependent organizational practices, norms and strategies and the dynamics that reproduce such workplace environments.


Blagoy is a post-doctoral scholar at the Department of Management, Freie Universität Berlin, Germany and research fellow at  the Governing Responsible Business Research Environment at Copenhagen Business School, Denmark. In his doctoral thesis, he employed a path-dependence lens to study the mechanisms underlying the persistence of excessive working hours regimes in management consulting firms. His research focuses on overwork in professional service firms, organizational change and persistence, and time and temporality in organizations.

Pic by Quinn Dombrowski, Flickr

The Dark Side of Transparency

By Lars Thøger Christensen.

Transparency is essentially about creating insight into organizational and institutional practices in order to allow for critique, stimulate improvement and hold politicians and decision makers accountable. As such, transparency is an essential dimension of a rational, open and democratic society. Without transparency, there is great potential for manipulation, negligence and fraud. Yet, transparency may itself be manipulative. Even when the intention is to disclose and stimulate insight, the results may be less benign. Whenever something is illuminated and pulled out for further inspection, something else remains in the dark.

Any serious pursuit of transparency needs to consider what the pursuit itself is doing to public insight, what it “hides” so to speak and what remains out of view.

Part of this problem resides in the way we understand transparency. While openness and insight may be the ultimate goals, it is commonplace to define transparency in more prosaic terms, for example as information provision. With oceans of information available at our fingertips, the world certainly appears far more transparent than ever before. Yet, accurate information about complex issues, such as sustainability or social responsibility, is usually not easy to digest. Most information about such matters, thus, is often accessible only to experts. And whenever it is made accessible to lay people, it has been subjected to multiple processes of editing and simplification.

No information speaks for itself and attempts to make it “speak” hide as much as it disclose.

Another problem concerns the organizational behavior we hope to see and understand better through practices of transparency. If we think that organizations and decision makers continue to conduct business as usual when subjected to increased transparency, we are utterly wrong. Transparency is not a neutral tool that simply illuminates a preexisting world. When people in organizations know that their talk, decisions and actions are publicly accessible, they are less inclined to experiment, take chances, share ideas, or talk freely about their accomplishments, ideals, assessments and aspirations. This is the case in numerous organizational processes, including meetings, bargaining games, conflict resolutions, idea generation, etc. where the need to withhold some information and protect identities or strategic positions are often important concerns. In such cases, the willingness to share complete and accurate information may be limited and replaced by a desire to “send the right signals” or make the right impressions.

Transparency may cause organizational members to hold back or otherwise adjust behavior.

As a result, we may see less than we think. Even when transparency is enforced by rules and regulations, like for example social responsibility reporting in some countries, participants have a tendency to alter and edit their behaviours in ways that conform to social norms and expectations (i.e. by creating a “front”). Organizational behaviour is certainly not unaffected by increased transparency demands. Thus, we know that organisations carefully select, simplify, and summarize data before they are revealed, that they selectively disclose or leak information, for example through competitive signalling and they shrewdly manage the timing of disclosure, sometimes with the intention of deflecting critique or handling potential issues. Moreover, producers and custodians of data often shift the medium, the classification scheme, or the level of comparisons when forced to share information that used to be confidential.

Demands for more transparency are likely to be handled strategically by organizations.

None of this is to suggest that transparency should be avoided or reduced. Quite the contrary. But it is a reminder that transparency ideals and practices are shaping organizations in dramatic ways and that our desire for more transparency needs to include a desire to know its limitations.


Lars Thøger Christensen is Professor of Communication and Organization at the Department of Intercultural Communication and Management at Copenhagen Business School.

Pics by Roland Molnár and I Want a Poster, Flickr

America, what now? Drawing Up a New Social Contract

By Thomas A. Kochan.

The recent US election exposed two major intersecting fault lines in America: the deep divisions across racial, ethnic, and gender groups and the feeling of being left behind by the economic forces at work resulted in pervasive anger and frustration and gave room for hate crimes across the country. If left neglected, this situation could soon shift to produce an era of social and economic turmoil that could make the Arab Spring look mild in comparison.

The key to break the pattern, as this article will explore, is in mobilizing all sectors of society  to create good quality jobs and get wages moving upward again for all groups. In short, America needs a new social contract attuned to the needs of today’s workforce and economy that is, once again, based on mutual respect.

America’s social contract broke down in the 1980s and the failure to replace it is a root cause of the wage stagnation, anger, and political divisions the election campaigns brought to the fore. With the election of Donald Trump and a Republican majority in Congress, we should suffer no illusions that the process of building a new one will be led from Washington, reaching for the goal to ‚Make America Great Again‘.

Laboratories for Democracy

However, this does not mean progress can’t be made via a different route. Indeed, history shows that most social and economic shifts don’t begin with a national policy, as Supreme Court Justice Louis Brandeis famously indicated: When treating stated as our “laboratories for democracy”, they function as places where innovations and social movements are born and tested for their ability to address emerging tensions. Ideally, those tensions turn into national policies before they escalade and explode.

In fact, groundwork to America’s last social contract was laid by workers themselves. In the first few decades of the 20th century, Sidney Hillman, then the leader of the Amalgamated Clothing Workers Union, organized immigrants and developed the basic principles of collective bargaining. Around the same time, women like Susan B. Anthony and Carrie Chapman Catt led the suffragettes movement to get women the right to vote.

With the help of Professor John R. Commons, who has been called the intellectual father of the New Deal, and his students of the University of Wisconsin, state level innovations had been shaped, leading to states like Wisconsin, Massachusetts, and New York enact unemployment insurance, minimum wages, and overtime protections. He and his students went to Washington to assist President Roosevelt write the innovations into the national laws that helped end the Great Depression. In turn, that laid the foundation to spread new wage norms through collective bargaining that succeeded in moving wages up in tandem with productivity to achieve an expanding middle class.

Now that the old social contract ultimately broke down, it is time to begin the long process of building a new one fitted to today’s economy, workforce, and society.  The good news is we are once again seeing substantial innovations in workplaces, local and state government, businesses and education settings that, if accelerated and expanded, could identify the key features of a new social contract.

The Workforce is leading the way

Grassroots initiatives are on the rise, and with the help of labor organizations, community coalitions, and what we might call worker centered entrepreneurs, achievements like the “Fight for 15″ are made possible. In this labor movement, the Service Employees International Union and a community coalition in Seattle have now induced another eighteen states to increase their minimum wages by varying degrees.

These developments pressured low wage companies like Walmart, McDonalds, and the Gap to increase entry level wages above the required minimum. IKEA has even gone a step further in committing to meeting objective standards for paying a “living wage” in all its locations.

Other new worker advocacy groups like Coworkers.org are using information campaigns and social media and other technology-aided apps to induce companies like Starbucks to reform scheduling practices to provide more advance notice and certainty over work schedules.

Unions and worker centers around the country are working together with immigrant groups to enforce their labor rights and protest wage theft (failure to pay minimum wages or overtime) while opening up their apprenticeships to more women, minorities, and immigrants and supporting efforts to promote “common sense” economic strategies that provide good entry level jobs and career ladders.

Lastly, a number of entrepreneurial tech-ventures are starting up around the country. One of those is Workers’ lab, a start-up incubator helping workers to leverage technology and platform-based strategies as a means to build bargaining power. Out of these and yet to be invented strategies might just come the next generation tech-savvy, grass roots labor movement.

How can business help?

Business leaders are slowly beginning to get the message that the era of prioritizing shareholders over all else may be coming to an end. The intense focus on maximizing short term shareholder value might account for one of the principle reasons the old Social Contract broke down.

The good news is there is growing consensus that this needs to change. No one less than J.P. Morgan Chase CEO Jamie Dimon said last summer that he would raise his employees’ wages because doing so is a good long term investment. He and his peers should apply the same logic advising their clients. By encouraging long-term investing, they could help end the short-termism that has held back corporations from investing in the workforce training and research and development that are so essential to job creation.

Wall Street could also help lead the way and perhaps in concert with labor by creating infrastructure funds that will generate a good rate of return for their investors and for the economy. Business, labor, economists and President-elect Trump, recognize the need and value of repairing the nation’s infrastructure. This constitutes a perfect opportunity to demonstrate the power of bipartisanship, public-private partnerships, and business-labor cooperation.

Some main street business leaders are already doing their part by competing on the basis of high productivity and high wage strategy. Research evidences both good profits and the creation and support of good jobs for American workers. This type of employers emphasise the importance of collaborating with labor and workforce partners.

The role of education

In today’s knowledge based economy, education leaders need to be counted as among the key stakeholders critical to building and sustaining a new social contract.

They and some philanthropic leaders active in funding education innovations are embracing what evidence tells us: There is nothing more important to educational attainment than a good teacher.  And in states as Massachusetts, New Jersey, and Illinois, teacher unions and education leaders are working together as partners to expand learning time, support teacher development, encourage online courses and helping workers refresh their skills in a fast-changing wold. These efforts should be extended across the country.

If knowledge is power, then these educational innovations will equip today and tomorrow’s workforce with the tools they need to meet the challenges they are bound to experience over the course of their careers.

Seeds of a new social contract

What’s needed next is to bring these different stakeholder groups together to learn about what is working and how successful innovations can inform national policy makers.

Here at MIT, we are doing exactly that. Our efforts are meant unite innovation leaders and stimulate research, share experience and come up with solutions based on learning that are meant to be diffused.
Together with the Hitachi Foundation, we have started a “Good Companies-Good Jobs Initiative” that is supporting efforts to improve relations and better manage and resolve workplace conflicts.  As we expand our efforts, we hope to serve as a catalyst for further innovation that will show the nation’s leaders what a new social contract might look like.

But more than anything else, we all should continue to encourage local activism, protest, and innovation. It may take a serious eruption of the now visible fissures to generate positive action in Washington.


Thomas A. Kochan is a Professor at the MIT Sloan School of Management and Co-Director of the Institute for Work and Employment Research where he teaches an online course on the future of work. He is author of Shaping the Future of Work:  What Future Worker, Business, Government and Education Leaders Need to do for all to Prosper. He is on Twitter.

Pic by Annette Bernhardt, Flickr

The Impact of Impact: Learning experience from the UK

By Mark Learmonth.

Who are we talking to when we write our articles?  Does our research make any difference to the world ‘out there’, or are we talking exclusively to fellow academics? The UK government has taken the line that too often academics have simply been talking to one another in their research papers. So they are actively encouraging us to try and make our work matter outside academia, and now measure the impact of our work officially. In this measurement exercise, impact is defined as: “an effect on, change or benefit to the economy, society, culture, public policy or services, health, the environment or quality of life, beyond academia.” Indeed, institutions are now being rewarded (both in cash and in increased reputation) for being able to demonstrate this kind of impact on the world. Here’s my own personal take on some of the key debates.

The Research Excellence Framework

Impact was measured for the first time as part of the 2014 Research Excellence Framework (REF), the UK-wide system for assessing the quality of research in UK higher education institutions. The REF is an assessment which: “provides accountability for public investment in research and produces evidence of the benefits of this investment … [it also provides] benchmarking information and establishes reputational yardsticks, for use within the higher education sector and for public information”. This means, among other things, that the quality of the research conducted in each institution – and within their different schools and departments – can all be ranked against one another using a common metric. My business school in Durham, for instance, came 20th out of the 100 and odd business schools in the UK. In other words, REF matters, and it matters a lot! Impact was a significant factor – counting for 20% of our overall score. One of the implications of REF mattering so much is that everything must be officially defined in great detail – including what counts as impact.

The impact of red-tape

I won’t bore you with the minutiae of the regulations.  It’s enough to say that the way impact was measured was through schools producing case studies that had to be written according to pre-defined criteria. A key issue was to be able to demonstrate convincingly that the “effect change or benefit” we were claiming for our research was in fact linked directly to the research. This was no easy task, given how multi-faceted any such change is likely to be. Even when, in common-sense terms, research had clearly had an impact, we could not always make out story fit into the formal requirements set out for impact case studies.

The impact of impact

It is interesting to reflect on the cultural changes that the UK’s experiment with impact (and there are certainly no plans to abandon it) may have brought about. The worst effects of the nay-sayers have not come to pass.  Even though impact counts for 20% of overall REF scores, the case study format (for all its faults) has at least meant that, in practice, only a relatively small handful of research articles need to have had impact in order for schools still to score highly. So, at least as far as the REF is concerned, blue-skies research can continue much as before.  Furthermore, the recent Stern Review, an evaluation of REF 2014, has recommended significantly broadening the criteria used to measure impact in order to address some of the acknowledged difficulties with the current approach.  And although some academics remain cynical about the whole issue, most of us are buying in to the agenda, at least to some extent.  After all, does anyone really want to conduct research that never influences anything (other than, perhaps, getting a handful of other academics to agree with us)? I, along with most of my colleagues, now have a section on our curriculum vitae headed “impact” in which we suggest how our research might matter to the wider world.

Would I recommend “impact” for Denmark?   

Personally, I’ve changed my views about impact since 2009. Like a lot of other academics, I’m naturally suspicious of governments imposing anything on us. Still, overall, I am now pretty positive about the impact of impact. The doomsday scenarios about the end of blue-skies work and neo-liberal appropriation have not come about. And on a more positive note, the impact agenda has helpfully raised the question of why we do the work we do, and made us think about who might be interested in it. I now find myself turning some of my academic articles into blogs for a general audience, in part, as a potential “pathway” to impact. Here’s an example. So, as long as it’s done sensitively and in consultation with the academic community, I don’t think you have much to fear about the impact of impact were something similar ever to be introduced in Denmark.


Mark Learmonth is Professor of Organisation Studies/Deputy Dean (Research) at Durham University Business School. He spent the first 17 years of his career in management posts within the British National Health Service. Prior to taking up his post in Durham he has worked at the universities of Nottingham and York. You can follow him on Twitter.

Pic: own