Research Findings Help Nike to Improve Compliance Policy
The extensive study by the MIT Sloan professors confirm that big corporations such as Nike can lead the way in improving the working conditions of the world’s factories, thus working toward global justice.
According to an analysis on “Beyond Corporate Codes of Conduct: Work Organization and Labor Standards in Two Mexican Garment Factories,” “global brands are more likely to influence the improvement of working conditions in their suppliers’ factories in developing countries by providing technical assistance to suppliers and empowering employees on shop floors.”
These are the findings of Richard Locke, the Alvin J. Siteman Professor of Entrepreneurship at MIT Sloan, and his former student Monica Romis, who compared working conditions in two Mexican garment factories that supply athletic footwear and apparel giant Nike, Inc.
Both Mexican factories passed compliance according to Nike’s code of conduct, but only one factory earned high scores in overall employee satisfaction with workplace conditions.
This is a factor that is most interesting to those of us who are trying to find out more about global justice. What was the real difference between the two factories? Why were the workers of one factory more satisfied with their working conditions compared to the workers of the other factory?
“The key difference, according to Locke, is that the factory with the higher satisfaction scores implemented ‘lean manufacturing processes’ — a term referring to manufacturing methods based on maximizing value and minimizing waste in the manufacturing process — that resulted in employees having greater autonomy and power to make day-to-day decisions on the shop floor.”
In simple English, this process involves greater say-so of employees in the factories. Such power gave the workers a greater sense of satisfaction. The following is excerpted from the research:
Both factories complied with Nike’s requirements, but employee satisfaction surveys showed considerable differences in workers’ satisfaction.
“The first Mexican company, which Locke and Romis refer to as Plant A, is situated in an industrial park and has been owned by a Mexican family for more than 50 years. The second factory, Plant B, is part of a Taiwanese group.”
In Plant A, the workers work in teams, and they operate more than one type of sewing machine. The workers themselves are responsible for routine maintenance. The interviews conducted with employees showed that “the workers appreciate job rotation and value performing a variety of operations.” It was obvious that the workers felt that there was room to grow and thus there was a sense of work satisfaction.
In Plant B, employees did not experience variety. They work at “fixed stations and specialize in narrowly defined jobs performing the same operation over the year. “ My interpretation of the situation is that the workers did not experience self worth and consequently did not enjoy the luxury of work satisfaction.
While the workers in Plant A participate in “decisions affecting production targets, allowing them to suggest alternative ways to perform operations, often rendering it quicker and easier, workers in Plant B must follow orders and do not have the opportunity to give their input.”
In addition to the above, the workers in Plant A are given opportunities to earn bonus incentives and earn 21% more than their counterparts in Plant B. The bonuses are based on “team results rather than individual productivity. “
The most encouraging fact is that Plant A now sees Nike as a partner in collaboration to improve productivity, and this improvement is not based solely on monitoring codes of conduct, which is the usual way that factories deal with poor working conditions.
My research into global justice as an EV Intern has given me new insights. Through my reading, I am beginning to understand how the efforts to improve productivity through offering more employees’ involvement and providing better working conditions on the part of big corporations such as Nike may be the beginning of true global justice for the world’s workers.
I understand that the issue of working conditions is only ONE of many facets of global justice. In my next two blogs, I will pick up the issue of social justice of the DREAM Act, which has made recent headlines.
“Beyond Corporate Codes of Conduct: Work Organization and Labor Standards in Two Mexican Garment Factories” by Richard Locke and Monica Romis
Team 4: Global Justice
July 30, 2011