The Evolution of SMART phones

Choose a population of firms and a characteristic of these firms that you are interested in: Describe the change in frequency of this characteristic over time as an evolutionary process. Make an argued assessment of the relative strength of the three mechanisms (variation, retention/transmission, and selection)

The population of firms that presents a remarkable evolutionary process for the last 30 to 40 years is the mobile phone industry with companies like Nokia, Samsung, Apple, Sony, LG, HTC, Motorola, Huawei, Lenovo and Blackberry.

History

The very first idea of a smartphone is said to have started in the 1970’s, when Motorola first introduced a handheld mobile phone. At that time portable phones were already there, but were limited to phones installed in cars and other vehicles. With these handheld mobile phones, you were always connected through wireless communication as long as your mobile phone was on. Actually, the concept didn’t come into realization until almost 20 years later when IBM’s Simon Personal Communicator first showed its face in 1992. Simon had a monochrome touchscreen, a stylus, and a charging base station. When using data, you could expect to charge the phone after about 60 minutes of use. Nevertheless, despite being able to send and receive emails and faxes, Simon was never technically called a smartphone, though in perception, that’s exactly what it was. During the whole development also the communication began to develop and in the 1990’s, the mobile phone development was mainly focused on size, weight and durability but companies like Nokia with their Nokia 7110 made it possible to make use of a WAP browser (Wireless Application Protocol) to get access to information and data services. Still it was very limited service. Another important feature in the development of the smart phone is the capability to send messages. Aldiscon in Sweden did the first commercial deployment of an SMS, in 1993. These successions lead to a different way of communication with each other not only by calling, but also by sending messages. This SMS service became more and more popular because you could send it anytime of the day (Wikipedia, 2014).

The development of mobile phones with different features continues until 2007, when Steve Jobs introduced a smart phone with multimedia capabilities and functions as a quad-band touch screen. This event radically changed the functionality of a mobile phone; it was not about calling and texting anymore, it was about setting the boundaries of interaction closer and closer.

Evolutionary process

In the following paragraphs, the smart mobile phone industry would be assessed based on the mechanisms that explain the evolutionary process of a business. These mechanisms are:

1. Variation;
2. Retention/transmission;
3. Selection

Variation

Variation relates to the continuous generation of new ideas, and in a social system, setting actors search for novelty through problem solving. Nevertheless, search behavior for solutions is not purely individual but there is collaboration between these actors. Variation can also arise from mistakes and uncertainty is a prerequisite because if it would be easier to find solutions then there would be no generation of new ideas (Boons, 2014).

Population of firms:

Smart Mobile phone industry as a population of firms would be assess over its Operation systems. OS are the software that run the desktop computers and laptops and manage their resources and memory when they’re being used for multi-tasking. (MOS, 2014)

Characteristic of interest

Effectiveness in the functionality of these mobile operation systems

Assessment of Variation

There are three operating systems available today Android, iOS and Windows phone.

1. Google Android

Google has envisioned developing the world’s most powerful mobile operating system. As a result, Android has become a collection of platforms which is characterized by a fragmented set of application programming interfaces, which comes with an enormous availability of apps, games, books offered in their Google Play shop. Given that Android works on devices costing less than $40 and those priced over $500, Google has put a lot of effort to ensure a careful balance between excessive fragmentation and the risk of hindering new innovation (CCS, 2014)

2. Apple iOS

Apple remains the leading priority for a large proportion of developers because of its premium positioning, the profile of its users and their high level of engagement. Apple’s vision has been focused on its user-friendly interface; it is about the all-round functionality and the robust security that runs the iPhone. It is that security’s feature what has given the iphone a special characteristic in the market (CCS, 2014).

3. Microsoft Windows Phone

Microsoft’s vision is based on the fact that a smart phone must be a phone that fits the user personally. In order achieve this, their main focus is on the user itself, by making it possible to personalize the user’s own interface. The functionality of this OS, can keep the user updated everywhere with live tiles, that can provide up-to-date content and notifications. Live tiles “embody the Microsoft design principle of being fast and fluid. Users can see updates and real-time information from their apps all from their Start Screen, enabling them to quickly review new information and engage with apps even before they open the apps”. In this way, they praised on providing a way to make life easier and to facilitating keeping in touch with everyone (Microsoft, 2014).

Consequently, the variation is based on what aspects the different mobile operating systems are focusing on. Mobile phone manufacturers like Samsung, Nokia, HTC, Apple usually can select which operating system fits better with their visions and portfolios. These features also extend beyond the manufacturers because consumers can also choose for a smart phone based on what features fit them best.

Retention/transmission

Firms routinize in various ways and if a routine is seen as successful, then the routine spreads to other actors involved. The learning experience is within a chosen direction. Firms learn within a certain direction to do things better, become well in certain technologies like lobbying, mobile phone technologies (e.g. cpu’s, memory, screens, batteries), better collaborating with suppliers, handling more suitable innovative functionalities.

Characteristics are transmitted through the population via imitation and social pressure. If it is via imitation, first, the general focus could be on SMALLER mobile phones with design characteristics like light weight. Then with the Internet and social media developing, it could stimulate the introduction of SMART phones and then the APPS. By social pressure, the main objective of society could be to always be connected to the world more efficiently and quicker. All frontiers and boundaries would almost be disappearing because of more opportunities available via Internet. Therefore, in the current society, the mobile smart phone is so embedded into the lives of people that it is almost impossible to live without one.

Consequently, within this mechanism of retention/transmission (reproduction), it is all about the functionality that smart phones must have to stay in touched with the world. It is not only about calling and been called anymore, but the broader opportunities that come from Internet, like paying directly via the phone without the need for cash or a card. Society wants to get more and more out of their smart phones, putting in this way social pressure for the technology to keep reproducing new modifications that continue to embed in the usual ways of life. Nowadays, it is not uncommon to see children using smart cell phones.

Selection

The selection is about comparative advantages that each firm has, a competitive selection pressure where actors with certain characteristics outperform those that don’t have these characteristics. There are various selection pressures that act regionally in the case of the smart phone industry:

• User-friendly
• Efficient Functionality e.g. Fast, Broader connectivity
• Design features e.g. Light weight, nice colors
• Affordable

Therefore, the selection process is stirred by what society demands. So, selection exists when a firm can anticipate consumer demands and act on them. For example, for the characteristic under study, the general functionality of the Android OS has given Google the biggest market share (nearly 85%) in the Q2 2014 (IDC, 2014). This is attributed to its powerful development framework, its affordability and its broader developer partnerships (Android, 2014).

References

Frank Boons, 2014 . Lecture November 13, 2014

CCS Inside Report, 2014. Global Smartphone Market Analysis and Outlook: Disruption in a Changing Market. http://www.lenovo.com/transactions/pdf/CCS-Insight-Smartphone-Market-Analysis-Full-Report-07-2014.pdf

Mobile Operating systems http://www.uswitch.com/mobiles/guides/mobile_operating_systems/

Microsoft

http://msdn.microsoft.com/en-us/library/windows/apps/dn468032.aspx

IDC

http://www.idc.com/prodserv/smartphone-os-market-share.jsp

Android

http://developer.android.com/about/index.html

How can the government increase the use of LCAs?

LCAs are a tool for assessing the environmental impact of products. Think up four ways in which government can increase the use of LCAs through external control and setting boundary conditions. Use Sabatier’s Framework to assess the potential effectiveness of external control vis-à-vis other options.

LCA overview

Life cycle analysis is a key approach to evaluating the environmental impact of any item of technology via a Life cycle assessment. This assessment evaluates impacts throughout the entire life cycle of a particular product from cradle to grave in terms of the energy, raw material, and land resources required from the building stage until the disposal of the product at the end of its useful lifespan. Legally, LCA is governed by the environmental management standard ISO 14040:2006 which outlines its principles and framework and the ISO 14044:2006 summarises its requirements and guidelines (Newton, 2014). Regardless of the fact that this tool is one of the leading ones in the world of sustainability and has proven itself to be a particularly valuable quantitative tool as well as a methodology that can be applied to production and consumption issues, it is still in development and has many limitations. Among some of them are( Graedel T.E., 2010 & Clark G., 2014)

Absence of a perceived need for LCA. There is a general lack of environmental awareness and lack of chain management responsibility, which differs among countries, organizations and companies. As a result, there is a lack of commitment to LCA, and to the environment by the different organization’s top management levels, which brings insufficient integrated LCA procedures

Lack of LCA expertise or know-how. The lack of expertise to perform and understand LCAs is a particular problem in developing countries, for small- and medium-sized enterprises (SMEs) and for policy makers. The inability to communicate about LCA methodology and outcome is also a problem.

Lack of LCA funding. There is an assumption that LCA is costly because of the extensive need for data and expertise. This is especially true for developing countries and SME’s. In addition, the ISO requirements on review procedures could increase the LCA cost.

Lack of data and methodologies. Data quality and availability are major practical blockages in LCA studies. There is no customary ways to carry out an LCA, and ISO standardization does not solve the problem: in fact it may disqualify current methods. Furthermore, users are not always clear how LCA “fits in” relative to other available environmental management tools.

The possibility to select different allocations, system boundaries and recycling concepts leads to data inconsistencies, as well as double counting and omissions. Therefore, further standardisation of LCA after ISO is required.

The following paragraphs describes 4 possible solutions to the limitations mentioned above where the government can influence through external control and setting boundary conditions the widespread of the practice of LCA. In addition, in order to evaluate each option, the Sabatier’s Framework would be used.

To solve limitation A: The government can exert external control by integrating LCA into environmental policy-making and decision-making procedures. One way could be promoting supply chain management social responsibility among companies (e.g. Green Procurement). In this way a bit forcing companies to become more transparent and stimulate social responsibility, at all levels in their value business chains. In the end the combination of these conditions and an independent verification system gives companies the support to show that their products or services are ‘sustainable’, which in turn can indirectly provided them with a competitive advantage over other competitors. Nevertheless, a stronger sanctioning system that doesn’t involved taxes or bans, might be needed; because it cannot interfere with international trade regulations (Clark G., 2014). In addition, the government can also influence the use of LCAs via setting boundary conditions by providing companies with a framework that helps them through the process to implement a better environmental performance into their agendas. It seems that the EU Commission are opting towards this implementation scheme. For example; the EU Commission’s Action Plan for sustainable consumption and production (SCP) and sustainable industrial policy (SIP), already aims at ensuring EU continued leadership in environmental performance by (EU Commission Action Plan, 2008):

OBJECTIVES	TASKS
Creating a new sustainable product policy, in order to improve the environmental performance of products on the market and help consumers to buy more eco-friendly products	§  Eco-design standards for a wider range of products §  Improved energy and environmental labelling §  Incentives rewarding eco-friendly products, including green public procurement §  Work with retailers §  Support to environmental industries §  Promotion of sustainable industry internationally.
Encouraging eco-innovation so that EU businesses adapt to the markets of the future
Supporting the competitiveness of eco-industries contributing to a low carbon economy internationally

To solve limitation B: The government via external control can demand education ministries to implement academic programs that would introduce LCA in schools at early levels. In this way, all schools including universities and research centers can standardised this know-how that in the long term would be so embedded in a country’s system making LCA knowledge an emergent property. Likewise, the government via setting boundary conditions could promote the increase in know-how by altering available information that could give a higher and more important status level for people who are trained in developing LCAs. For example; to apply for jobs in the government, an asset requirement could be to have LCA knowledge in the same level as having a second language. In addition, the government can support LCA capacity-building and method development. This may well involve international co-operation and agreements between governments, business and academia to reduce the costs and stimulate coherent developments.

To solve limitation C: In order to increase the funding for projects that depend on LCA studies, the government could help to set boundary conditions over a subsidy scheme. Businesses, research agencies, education institutions that implement LCA as part of their projects to assess their environmental impacts, could be entitled to a subsidy. And if the government would like to exert more external control then the scheme could be modelled in such a way that all the innovative information gathered through the accomplishment of projects, be share with the respective ministries at government level.

To solve limitation D: In order to help for a more standardised availability of LCA data, the government could develop handbooks, directories of LCA databases, and institute more coordination to make data more accessible and systematically collected. Also, updating this data on a regular basis would be extremely advisable to keep high quality information. Nevertheless, this intervention would be more about setting boundary conditions without external control because the sanctioning part would be very difficult to implement.

Sabatier’s Framework is a conceptual outline that identifies the factors, which affect the achievement of statutory objectives. The options mentioned above would be assessed in order to find out the effectiveness of external control (Sabatier, 1980).

Tractability of the Problem

	Option A – Increase perceived need for LCA e.g. Green Procurement	Option B – Increase expertise and Know-how e.g. Capacity building	Option C – Increase funding for LCA applications e.g. Subsidies	Option D – Increase standardisation of LCA e.g. Directories for LCA databases
Availability of Technology	Valid theory exists. Green procurement asks for more LCA presence.	Valid theory exists. Capacity building programs have proven to transfer knowledge	Valid theory exists. Subsidies can help to widespread adoption of innovation	Valid theory exists. A standard directory that goes beyond ISO
Diversity of target group behavior	High Green procurement can take different forms	Modest Trends towards the increase in sustainable knowledge	Modest Unknown amount of companies and institutions involved with LCA	High Distinctive data to standardized
Size of target group	High (public & private sectors)	High (public & private sectors)	Modest (public & private sector that is involved with LCA)	High (public & private sectors)
Extent of behavioural change required	High Need to change towards a more sustainable consumption behavior	High Knowledge needed for the application of LCA to all processes in value chains	Modest Concerns only the ones involved with LCA	High Adopt a standard way of LCA when might be using other databases

Ability to statute to structure implementation

	Option A – Increase perceived need for LCA e.g. Green Procurement	Option B – Increase expertise and Know-how e.g. Capacity building	Option C – Increase funding for LCA applications e.g. Subsidies	Option D – Increase standardization of LCA e.g. Directories for LCA databases
Validity of the causal theory underlying statute	Valid	Valid	Valid	Valid
Precision and clear ranking of statutory objectives	Clear with high priority	Clear with medium priority	Clear with high priority	Clear with medium priority
Financial resources	High investment – sustainable products are more expensive	High investment – Conferences, and workshops involve significant amount of resources	High investment – subsidies are always expensive for the government	High investment – new agency to take care of creating directories
Hierarchical integration within and among implementing institutions	Highly integrated – few veto points, adequate incentives for compliance	Highly integrated – few veto points, adequate incentives for compliance	Highly integrated- medium veto points, adequate incentives for compliance	Highly integrated – few veto points, adequate incentives for compliance
Decision rules of implementing agencies	N/A No permit/license system required for the statute objective	N/A	N/A	N/A
Recruitment of implementing officials	Use of existing agency, which perceives the new mandate to be compatible with its traditional orientation	Use of existing agency, which perceives the new mandate to be compatible with its traditional orientation	Use of existing agency, which perceives the new mandate to be compatible with its traditional orientation	Need for a new agency to administer the statute, as the program will necessarily be its highest priority and the creation of new positions opens the door to a vast infusion of statutory supporters
Formal access by outsiders	–	–	–	–

Non-statutory variables affecting implementation

	Option A – Increase perceived need for LCA e.g. Green Procurement	Option B – Increase expertise and Know-how e.g. Capacity building	Option C – Increase funding for LCA applications e.g. Subsidies	Option D – Increase standardization of LCA e.g. Directories for LCA databases
Socio-Economic conditions and technology	More diverse and prosperous the target group, the more probable the effective implementation of Green procurement e.g. EU vs. Developing world	More diverse and prosperous the target group, the more probable the effective implementation of Green procurement e.g. EU vs. Developing world	Could work at both levels (diverse vs. non-diverse & prosperous vs. non prosperous)	More diverse and prosperous the target group, the more probable the effective implementation of Green procurement e.g. EU vs. Developing world
Media attention to the problem	Highly specialized media attention can effectively influence the implementation of Green procurement	Highly specialized media attention can effectively influence the implementation of Capacity building	Highly specialized media attention can effectively influence the implementation of subsidies for LCA funding	Highly specialized media attention can effectively influence the standardization of LCA
Public support	High public support towards sustainable programs can help to implement green procurement	High public support towards sustainable programs can help to implement capacity building	High public support towards sustainable programs can help to set aside subsidies for LCA funding	High public support towards sustainable programs can help to increase the standardization of LCA
Attitudes and resources of constituency groups	High number of opponents can influence against implementation of Green procurement (monetary issues)	High number of opponents can influence against implementation of Capacity building (monetary issues)	The initial legislation can loose strength over time if confronted with a high number of opponents	High number of opponents can influence against standardization of LCA
Support from sovereigns	Medium due to financial resources	Medium due to financial resources	Medium due to financial resources	Medium due to financial resources
Commitment and leadership skill of implementing officials	Nowadays, sustainable projects are bringing highly committed implementing agencies	Nowadays, sustainable projects are bringing highly committed implementing agencies	Nowadays, sustainable projects are bringing highly committed implementing agencies	Nowadays, sustainable projects are bringing highly committed implementing agencies

After analyzing each option based on the Sabatier’s Framework, which relates to the implementation of statues based on external control, it can be concluded that the effectiveness of external control where the government’s tasks are setting scope for control, setting rules, monitoring, and sanctioning, is very low for each of the options mentioned before. This is because most of my options seem to work better with setting boundary conditions that don’t require sanctioning. Nevertheless, in the long-run, after each option starts taking place, more external control might be needed if goals are not attained. For example; if Option C, whose goal is to fund LCA via subsidies to promote the use of this tool, doesn’t bring more environmentally friendly results, then the government might have to opt for a sanctioning scheme that will pressure these actors to comply. In this way, if an oil company is getting subsidies to use LCA for a particular process and after a couple of years, the processes are not getting more sustainable, then the company would have to be sanctioned. Moreover, the same reasoning goes for the other 3 options.

References

Newton A., Cantarello E. 2014. An introduction to the Green Economy: Science, Systems and Sustainability. Publisher Routledge, 2014. ISBN            1134654456, 9781134654451

Graedel T.E., Allenby B.R., 2010. Industrial Ecology and sustainable engineering. Pearson ISBN 9780138140342

Clark G., De Leeuw Bas. 2014. How to improve adoption of LCA. United Nations Environment Program. Retrieved on November 8, 2014. http://www.estis.net/includes/file.asp?site=lcinit&file=709931B2-907E…

EU Commission Action Plan, 2008 http://ec.europa.eu/enterprise/policies/sustainable-business/environment-action-plan/index_en.htm

Sabatier P., Mazmanian D., 1980. The implementation of public policy: a framework of analysis. University of California, Davis http://onlinelibrary.wiley.com/doi/10.1111/j.1541-0072.1980.tb01266.x/abstract

Kalundborg Symbiosis

1. Identify a regional network of production (drawing on own experience, literature, the news)

The Eco-Industrial Park at Kalundborg, Denmark has been developed gradually over the last 30 years. It began in 1961 when Statoil (then Esso) needed water for their refinery near Kalundborg. So, pipes were constructed from Statoil to the nearest lake Tissø. Through the years, different private and public companies and institutions like the Kalundborg municipality were introduced and became part of the park. Now it is composed of 9 private and public entities: (Chertow, 2004 & Wikipedia):

– DONG Energy (E2 Asnæs Power Station): the largest plant producing electricity in Denmark (a 1037-MW facility fired by orimulsion and coal)

– Statoil Refinery of Kalundborg: Denmark’s oldest and largest refinery, with a production capacity of approximately 5.5 million tons of crude oil annually

– Gyproc A/S: part of BPB Gyproc, producing plasterboards and plasterboard-based systems for the construction industry

– Novo Nordisk A/S: an international, biotechnology, and pharmaceutical company offering a wide range of insulin products to world markets

– Novozymes A/S: the largest producer of enzymes in the world, with its largest single factory in Kalundborg

– A/S Bioteknisk Jordrens Soilrem: specialist in remediation of soil contaminated by oil, chemicals, and heavy metals that clean approximately 500,000 tons of contaminated soil annually

– Kalundborg Forsyning A/S: water and heat supplier as well as waste disposal for Kalundborg citizens

– The municipality of Kalundborg

– Kara/Novoren: the inter-municipal waste treatment company

Kalundborg Eco-Park has received enormous attention from practitioners as well as scientists and it is considered one of the most internationally well-known examples of a local network for exchanging waste products among industrial producers, in other words, for practicing the main goals of Industrial Symbiosis (van den Bergh et al., 2004).

2. Analyze this network using at least two of the concepts presented, paying particular attention to the linkages of the regional network with ‘non-local’ actors

The Kalundborg Eco-Park is a type of Resource Network because it complies with the following characteristics:

Material & Energy exchange:

It is registered that in this park about 20 exchanges occur among the participants involving water, energy, and a wide variety of residual materials and by-products that become feedstocks in other processes (Chertow, 2004). All of these exchanges are done with the objective to utilize on material and energy savings. Some of the most important synergies practiced in this eco-park are the ones exchanging non-renewable sources like water and energy (comes from coal & fossils). Because these are non-renewable sources, many of the companies involved have been putting a lot of emphasis in bringing more efficiency to the system. For example; in the Kalundborg region there is a large groundwater deficit, and groundwater supplies have gradually dropped over a period of 20 years as the local water consuming industries have expanded in size and consumption As a result of these developments, a number of public/private initiatives for saving groundwater have been initiated over the last few decades. Being an important one, the IS arrangement between Statoil & Asnaes who have been made it possible to replace and diversify the intake of water to the power plant and to optimise the energy efficiency of the facility. Consequently, the intake of surface water at the power plant has had a direct effect on the intake of fresh groundwater, amounting to an annual saving of 686,000 m3 in 2002, or more than 6.9 million m3 for the period 1990–2002 (Jacobsen, 2006). For the energy part, the benefits of the steam/heat IS relationships are based on gradual substitution/cascading the energy content in the water that is used at different levels ranging from high-energy steam exchanges to low-energy exchanges of salty cooling water. Since 1981, the town of Kalundborg has eliminated the use of 3,500 oil-fired residential furnaces by distributing heat from the power plan through a network of underground pipes. Non-local actors to this network are the homeowners of the city of Kalundborg who don’t mind paying for the piping system (as a tax), because they receive cheap and reliable heat in return.

Producing Knowledge

The success of Kalundborg is due to the high connectedness among the actors in this network. This network has emerged as a “response to specific social circumstances that stimulated the building of mutual trust among industries and created an environment for cooperative action” (van den Bergh et al., 2004).

Constructing Rules

In Kalundborg, the industrial network is a tightly coupled one where all the industrial executives know each other and have good contacts with the regulatory authorities (van den Bergh et al., 2004), creating in this way a stable playing field where they can easily influence institutional conditions.

Creating Values

The central actors of the different companies involved in the Kalundborg symbiosis have gradually formulated a set of common values and beliefs which have evolved as a result of the symbiotic relations, and which have guided the further development of the different by-product exchange projects. In addition,this industrial eco-park has been considered one of the world’s best examples of industrial symbiotic network. Its framework has shaped the collective mindset because it has been used as a standard model for other projects. For example; the Avedore project (Denmark), which demonstrated possible and profitable exchanges and non-significant differences (technological and economic preconditions), was not realised spontaneously as in Kalundborg. It seems that it revealed a very low degree of communication and limited sense of community in the industrial district.

The Kalundborg Symbiosis network exhibits Resource Dependency theory because its organisations depend on each other’s resources. These resources ultimately originate from an organisation’s environment mainly as by-products or waste streams, in other words the resources that one organisation needs are thus frequently in the hands of other organisations. Hereby, the resources are a basis of power, for example; Statoil ‘s power over Asnaes is equal to Asnaes dependence on Statoil’s resources. The closing-material loop setting of an industrial symbiosis model as seen in the figure below, identifies this resource dependency:

Nevertheless, the interconnections of the Kalundborg network have not encouraged the need to overcome dependency and improve organisational autonomy and legitimacy via actions like alliances, joint ventures, mergers and acquisitions. On the contrary, all the companies involved praise their autonomy and share the same level of power by showing mutually cooperative behaviour.

3. Make clear how the network you identify constrains and/or enables actors to work towards closing material loops.

The Kalundborg Eco-Park has evolved from an impressive design. This industrial symbiosis never received public subsidies and each linkage between firms was negotiated as an independent business deal. What is remarkable about this model is that “Kalundborg symbiosis has always been driven by market forces, and the actual physical linkages and their economic viability were the subject of bilateral talks between industrial actors without external prompting” (Sterr, 2004). In other words, “the story of Kalundborg is mainly a story of self-governance”. It is not just a matter of technological viability, but also the level of connectedness and trust of the firms in an industrial park. For instance, it has been rumored that the success of this network has been attributed to the frequent gathering of managers in a local pub. It can be seen that communication has become a crucial factor for deriving cooperative behavior, which is one of the enablers for the success of a network system. In the case of Kalundborg, it is not only about buying and selling of waste and/or by-products, but adjusting production processes in such a way that next-door firms can be connected (van den Bergh et al., 2004).

References

Chertow, M., (2004). Industrial Symbiosis. Encyclopedia of Energy Volume 3. http://www.sciencedirect.com/science/article/pii/B012176480X00557X

Jacobsen, N.B. (2006). The industrial symbiosis in Kalundborg: a quantitative assessment of economic and environmental aspects, JIE, 239-255. http://www.exima.dk/cases/Journal_of_Industrial_Ecology_1012239.pdf

Sterr T., (2004). The industrial region as a promising unit for eco-industrial development—reflections, practical experience and establishment of innovative instruments to support industrial ecology. Journal of Cleaner Production 12 pg. 947–965. http://www.sciencedirect.com/science/article/pii/S0959652604000836#sec4

Van den Bergh, J. C. J. M., Janssen M. A., 2004. Economics of Industrial Ecology. Materials, structural change and spatial scales. Massachusetts Institutes of Technology. The MIT Press. ISBN 0-262-22071-7

Strugle for Legitimacy

Analyse how the two key organisations in this case (Nokia and the supplier) are striving for legitimacy

In the documentary, Nokia, in their effort to apply CSR standards to its supply chain, visits one of their suppliers in China. Their main goal is to assess the Chinese company on their level of social responsibility mainly to its workers. During their visit, they encountered many awkward situations where values that for Nokia are common in a working environment, are contradictory to the ones practiced by the supplier. Basically, Nokia wanted to send the message to the supplier that in order for them to work with Nokia, many of the supplier’s ethical business codes would need to approach the ethical codes of Nokia itself. It sounds obvious, but one important issue that Nokia should have taken into consideration is the fact that both companies come from two different organizational environments. Nokia, coming from the western world has different company values than their Chinese supplier. This different mindset between the western company and eastern one is also seen in the way both are striving for legitimacy.

Legitimacy is defined as “a generalised perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions”(Suchman, 1995). Therefore, in the way that the representatives from Nokia were inspecting the working environment was very westernized because in the west it is obvious that you coordinate your company according to the legislation and you get fined or penalized by the government if the company doesn’t comply. So, they asked questions about minimum wages, overtime compensation, safety, living standards, and if they were working according to Chinese legislation. Consequently, they were expecting compliance according to what they recognized acceptable by law but that was not the case in China. So, in this case Nokia tries to strive for legitimacy by normative pressure, which means by professionalization because they want that their suppliers fit into their sustainability criteria. In China, legislation is not always the leading coordination mechanism, this was shown in the documentary when one of the supplier managers clearly said that they do not follow rules so they were not forced to provide workers with employment contracts. He honestly mentioned: “why do you need a contract if you do not comply with the law.”

Another important point to mention is the different hierarchical structures of both companies. China tends to follow a tightly controlled centrally run society where hierarchy is very important, what the boss says is absolute. In the documentary, it was easily recognized when the plant supervisor chose the employees who could talk with Nokia.   Subsequently, we can see that types of authority also play an important role when it comes to legitimacy. In China, one can say that because of the top-down authority approach, legitimacy could be categorized more as coercive pressure. Especially, when the supplier’s managers were there just to please auditors by only presenting fudge accounting documents that don’t show actual data. It looked like they were already prepared for auditing when one of them called another one asking about what documents to give to the Nokia’s officers. However, the external control was more from within not from outside the company.

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

The strategy used by Nokia to diffuse their sustainability criteria to others involved in its business chain, was perhaps in my opinion a bit naïve. They did not do an ample intercultural study that would be exhibited in their sustainability agenda, and which would be more appropriately fitted to the Chinese culture. I believe that if they had obtained more information regarding culture, values, institutional and organizational settings, it would had been less shocking for them the fact that their workers didn’t have employment contracts. Unfortunately, in China and perhaps in other parts of Asia, labor rights tend to be not so strict giving the manufacturing plants the leverage to abuse its workers.

The situation here is that in the western world, labor rights are far more developed and it is inconsistent to think that what works here can work anywhere else. Nokia went to China to show its suppliers how they are supposed to implement business ethics according to the ones of Nokia, and they found a different story. In addition, I don’t believe the communication was effective due to the lack of intercultural skills. The interviewers couldn’t get too much information from workers because they overlooked the fact that Chinese subordinates only react to the orders of a boss and can hardly say NO.

In conclusion, the way Nokia tried to diffuse its sustainability agenda could have been more effective if they would have collected more background information on how the local communicate with each other. As I mentioned before and what the documentary shows, it seems more like Nokia went to China to show them how it needs to be done, instead of how they can improve their business ethics according to the local laws and guidance that fits within the criteria of Nokia.

How could another coordination mechanism improve this?

In the social scientific field, there are four types of ideal coordination mechanism (Boons, 2008):

From these four ideal types of coordination mechanism, the one more suitable to improve the business ethics of the Chinese supplier so that they go parallel with Nokia business ethics is Self-organization. Boons (2008) categorises four types of relationships between self-organisation and external control by government, as the milestones to the success of establishing improvement.

1. Actors can self-organise through interaction, without intervening of the government;
2. Actors can self-organize and develop monitoring and sanctioning rules, this will lead to self-governance;
3. Actors can self-organize under pressure of governmental legislation, with selection pressure provided by the government;
4. Actors organise under control of governmental initiatives, no possibilities for self-organisation.

Based on the evidence extracted from the video, like the cultural differences and high level of hierarchy, the most appropriate coordination mechanism could be self-organisation with pressure of governmental legislation. This is mainly because of the high level of hierarchy. Authority plays an important role because it is responsible for the suppression of the Chinese workers’ own freedom to speak up, even worst to self-organize. If they happen to contradict the authority they will suffer the consequence sometimes even with losing their jobs. In the video, there was an instance where one of the workers during the interview talked about how a new employee got fired for answering back to the supervisor.

Consequently, it is clear that authority plays an important role in China and for instance also with the Chinese supplier. In order to bring change so workers can have a bit more freedom to take initiative, the Chinese government should play a role as well. How? By pressuring the companies through more strict legislation maybe via a penalty system to promote better labor rights. In this way, the high level of hierarchy will start to go down because workers will feel more supported by the government.

References

Suchman, M. C., 1995. Managing Legitimacy: Strategic and Institutional Approaches. The Academy of Management, 20(3), pp. 571-610

Boons, F., 2008. Self-organization and sustainability: The Emergence of a Regional Industrial Ecology. E:CO, 10(2), pp. 41-48

Feedbacks

1. (26)Blog of Nicole van den Berg: Question on IE Puzzle

She omitted to write about this question

2. (27)Blog of Francesca Klack: Question on IE Puzzle 

http://suchasocialsystem.wordpress.com/

Dear Francesca,

I totally agree with you about Greenwashing being a puzzle in the area of Industrial Ecology. Nowadays, becoming green is a popular trend and some companies in order to keep afloat, are taking advantage of the lack of awareness among consumers. In addition, as you mentioned, the absence of effective regulatory systems has promoted companies to indiscreetly use marketing schemes to confuse and deceive consumers. One point that I find it might be important to mention is the fact that some of these eco-labels are very expensive to obtain. For example, the label Fairtrade I know is a pricey one and many small companies cannot afford to comply with it. This is turn might force some of these companies to turn to Greenwashing.

3.  (28) Blog of Diana Carolina Palacios: Questions 1 & 2

http://dicapojura.blogspot.nl/

Hi Diana,

I think that your topic is an interesting one to be used to show how humans are bounded to other factors that are not so rational. Nevertheless, after last week’s class, Mr. Boons clarified the way this assignment should be handled. He mentioned that we need to apply Jone’s 6 mechanisms of the behaviour theory of organisations, which are: organisational memory, agenda setting, parallel processing, serial processing, emotional contagion, and identification.

If you decide to extend your assignment I would be looking forward to read it.

Hi Diana,

The way you rephrase the quote by Friedman about the business of business is to increase its profits, it’s a bit confusing to me. I would suggest you to explain further, maybe by giving some examples that you captured from the video.

4.(29) Blog of Daniel van Staveren

http://dvssspm.blogspot.nl/

Hi Daniel,

I find your topic thought-provoking because when you analyze if Gazprom did rationally made the decision to drill in the North Pole, by using the rational actor model, it seems quite evident that Gazprom made a rational decision by pursuing actions that will help them accomplish their objective. Nevertheless, by bounded rationality, I believe that (according to last week’s course) we are supposed to use all the 6 mechanism stated by Jones. You only used agenda setting and serial processing, while not mentioning anything about the other 4, which are: organizational memory, parallel processing, emotional contagion, and identification. Perhaps, you omitted them because they did not apply to your case but I find it useful to mention the reason why you didn’t include them.

5. (30) B.W. Schipper

http://thesocialsideofie.blogspot.nl/ 

Dear Branco,

I find your topic quite challenging to be used as a subject for the explanation of Ostrom’s SES Framework. Indeed, internet has evolved into a SES over the years, so now it can be categorized as a social-ecological system. The way you presented the case is very well done in terms of you being part of it, and where many private firms are also involved. The different levels are well explained taking into consideration as the depleted resource ‘the illegal download’ of computer-generated material like videos, music, etc… Perhaps, you could have extended your description by using the sub-categories of Ostrom’s framework (10 sub-levels, Ostrom, 2009) especially the ones that can helps us assess the possibility of self-organization that could support establishing stronger self-organized networks to prevent the depletion of illegal downloading. Especially, because it seems that in this arena, government intervention is not significant enough or has not enough power to stop this behavior.

I hope you understand my feedback

Regards…

 

About Friedman’s principle, I agreed with you that this notion cannot be directly related to sustainable management. And, how you put it to be used with the objective to decrease the illegal downloading could work. The new platforms like Spotify and Itunes indeed are friendlier user oriented, and if there is a correlation with a decrease in online piracy, then that could be a good innovation to solve this problem.

6. (31) Michelle Steenmeijer

http://michelangelonina.wordpress.com/

Dear Michelle,

Fishing activity, I think is one of the most important SES, which is in danger of depletion and extinction of marine species. Your topic is very straightforward and easy to understand. However, the SES framework established by Ostrom talks about sub-categories that help to recognised the likelihood of users to self-organised in order to reduce the exhaustion of this resource. Especially, because the resource system and unit associated with this SES ( like predictability of system dynamics and resource unit mobility) are very difficult to govern by the public authorities, and challenging for self-organisation. If you categorise your system based on the 10 sub-levels (Ostrom, 2009) that might give a more comprehensive explanation on the application of Ostrom’s framework to your case study.

I hope my feedback serves you well!

Freedman’s question was not answered.

7. (32) Josefine Rook

http://josefinerook.blogspot.nl

Dear Josefine,

You give a clear, straightforward introduction to the documentary, and also by explaining how both companies thrive for legitimacy is very understandable. The effectiveness of Nokia’s sustainable agenda is very confusing to all of us. But, as Mr. Boons mentioned yesterday, try to include a bit the cultural clash that both parties experienced, that could enhance your point of view. About the coordination mechanism, also try to analyze your proposition a bit more from an intercultural management perspective. Perhaps, in China the mechanism that could bring more sustainability (people, planet, profit) might be how to overcome the strong significance of hierarchy.

I hope my feedback helps you well!

8. (33) Sander van Nielen

https://iematters.weblog.leidenuniv.nl

Dear Sander,

I really like the structure you gave to explain legitimacy and how each company thriving for legitimacy affect the different structures of coercive power, mimicry and normative pressure. I also agree with you that Nokia’s approach to instigate its sustainability criteria onto its Chinese supplier was a form of normative pressure. However, the second question about if Nokia’s approach to diffuse its sustainability criteria was effective or not, it s not clear in your second part about sources of policy-changing incentives. As Mr. Boons mentioned yesterday, the difference in culture between the west and east should be analysed. The same goes for the last question about a coordination mechanism that could work; perhaps in China the mechanism that could bring more sustainability (people, planet, profit) might be how to overcome the strong significance of hierarchy (a Chinese cultural norm).

9.(34) Ilonka Marselis

ilonkamarselis.blogspot.com (Her blog is not active)

10.(35) Tim de Vrijer

Dear Tim,

You chose a good example as a regional network of production. I personally have not heard of such a business model. It is quite interesting because indirectly, it pushes other farmers to also consider sustainable agriculture so it could be seen as an enabler network towards closing material loops. Nevertheless, I think that when it comes to fulfill the second question of the assignment about identifying the two concepts regarding networks, you should consider extending your explanation. I believe that you are saying that this corresponds to a social network and also you mentioned about resource dependency? Perhaps adding a little bit of literature will help you to comply with the requirements of this assignment.

11.(37) Rebecca Joubert

http://joubertrebecca.wordpress.com

Dear Rebecca,

Thank you for reminding the objective and rules of the game. I particularly like your approach of indirectly decreasing demand by decreasing the amount of fish that each company can sell. The only problem with this suggestion is that there would always be a leak in the system and that could endorse for the institution of a black market. Your other two suggestions involve monitoring and sanctioning but again there would always be an escape to the system. As the teacher mentioned the only way to bring change could be via education by changing the minds of people, however; he posited that finding ways to do this could be very challenging. The whole idea, as he mentioned, is to somehow make that catching the fish becomes something like a horrible task so it induces less competition.

Mangroves, a way of life

We live in a world where humans and natural ecosystems directly or indirectly, depend on each other in order to sustain life. All the resources we are extracting from mother earth in order to fulfil our needs, is affecting the balance of the world’s ecosystems, hence, the reduction in biodiversity and the threat of massive climate change. To make it more complex, all the resources we use are part of the Social-ecological systems (SES). The SES diagnostic framework is “a generic framework for analysing social-ecological systems particularly with respect to collective action and institutions for sustainable resource use. Institutions as rules of the game are the interface, regulating what members of the social systems are permitted and forbidden to do in relation to the ecological systems and in relation to themselves” (Schlüter et. al, 2013).

According to Ostrom, a SES framework is useful because it identifies relevant information that would help to design data collection instruments that could explain the complexity behind SESs. The framework is composed of four first-level core subsystems. The subsystems are:

1. Resource systems (e.g., forested areas, wildlife, and water systems)
2. Resource units (e.g., trees, shrubs, and plants contained in the park, types of wildlife, and amount and flow of water)
3. Governance systems (e.g., the government and other organisations that manage the park, the specific rules related to the use of the park, and how these rules are made)
4. Users (e.g., individuals who use the park in diverse ways for sustenance, recreation, or commercial purposes).

Each core subsystem is made up of multiple second-level variables as seen below:

To see image, please click on it!

Ostrom, 2009 – A General Framework for Analysing Sustainability of Social-Ecological Systems

For the purpose of this exercise, I chose to analyse the transformation of mangroves due to the proliferation of shrimp breeding ponds using Ostrom’s framework. The way that I am part of this SES is that I am a shrimp lover and enjoy eating seafood that is mainly produced in mangroves. In Ecuador, the shrimp farming has been attributed to be the direct perpetrator responsible for the destruction of mangroves along the Ecuadorian coastlines especially in the province of Esmeraldas. This industry has grown at the expense of mangrove forests, and supported by all kinds of subsidies and credits. Shrimp farming is a very profitable industry in Ecuador because the shrimp that is produce there is well known around the world and this has boosted its exports in the last decades. The industry is composed of some big private companies and a big group of smallholders. The graph below, illustrates the increase in the shrimp-farming construction and the decrease in mangrove cover in Ecuador since 1969, which has been attributed mainly to the uncontrolled expansion of shrimp aquaculture (Thomason, 2006)

Why are Mangroves such an important ecosystem?

Mangroves are known to be really important for the protection of ecosystems (Flora, Fauna) in the coastal areas of the world. Due to the significant diversity it contains, it is an irreplaceable and unique ecosystem. The aerial roots of their trees come from the salt water on the coasts, estuaries and deltas, forming a shell that houses a multitude of animals (birds, fish, mollusks and crustaceans), many important species for human consumption. Mangroves form mating and breeding areas of many of these species and are home to fish development and other forms of marine life. In addition, mangrove swamps protect these coastal areas from erosion, storms (especially during hurricanes), and tsunamis. For these reasons, mangroves are often the object of conservation programs. It is estimated that about one fifth of all mangroves in the world are thought to have been lost since 1980. The United Nations Environment Program also estimated shrimp farming causes a quarter of the destruction of mangrove forests (UNEP, 2010).

In order to assess mangroves and the likelihood that users engaging in collective action to self-organise and prevent the overuse of these swaps for the uncontrollable production of shrimp, 10 multiple second-level variables that have been perceived and measured by Ostrom are postulated. The table below summarises the different categories: (Ostrom, 2009)

 

Assessing the outcomes and interactions of each variable, the probability that users of mangroves for the production of shrimp can self organised is quite moderate and high. It is already reflected in the presence of some environmental organisations working mainly for the conservation of these ecosystems. Nevertheless, collective groups of users who are cooperating and monitoring their actions are not present. I believe that organisation could arise if more education and knowledge is transfer to the users about the consequences of the overuse and deforestation of these habitats. Smallholders are usually poor people who might lack norms and ethical standards but when it comes to the future of their families (strong family ties) that alone might change their behaviour towards self-organisation.

References

Boletin Agrario, 2011 http://www.boletinagrario.com/dc-2308,gremios-camaroneros-ecuador-piden-dar-viabilidad-al-proceso-regulacion-actividad.html

C-Condem: The organization for the defense of Mangroves Ecosystems http://www.ccondem.org.ec/tempccon.php?c=164

Schlüter A., Wise S., Schwerdtner Mánez K., Weber G., and Glaser M.(2013) Institutional Change, Sustainability and the Sea. Retrieved on 4 October 2014. http://www.mdpi.com/2071-1050/5/12/5373/htm

Thomason P. 2006. Mangroves, People and Cockles: Impacts of the Shrimp-Farming Industry on Mangrove Communities in Esmeraldas Province, Ecuador http://www.iwmi.cgiar.org/Publications/CABI_Publications/CA_CABI_Series/Coastal_Zones/Hoanh_1845931076-Chapter11.pdf

UNEP http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=630&ArticleID=6645&l=en&t=long

Argue how the principle advocated by Friedman might be put to constructive use in the sustainable management of this SES.

The principle “the business of business is to increase its profits” by Friedman can be put to constructive use in the sustainable management of SES, if Users take on the role of businesses. Therefore, the principle could change to “the business of the user’s businesses is to make sure that they increase the sustainability of their business chains” because in the long-run this is what would continue be given them profits. In the case of the mangroves and shrimp farming a good balance between them would be perhaps by finding ways to grow shrimp without cutting down the entire mangrove, setting quotas for everyone, not only would provide a continuous share of the gain indefinitely, but also would avoid the intervention of the government whose policy to protect Mangroves, at least in Ecuador, is only via a penalty system.

Is it rational for a country like India to send a spacecraft to Mars?

Last Wednesday 25 September 2014, India’s Mars Orbiter Mission successfully entered Mars’ orbit becoming the “first nation to arrive on its first attempt and the first Asian country to reach the Red Planet. “We have gone beyond the boundaries of human enterprise and human imagination,” declared India’s Prime Minister Narendra Modi. We have accurately navigated our spacecraft through a route known to a very few.” (CNN, 2014)

In order to explain if this decision was the result of a rational judgement, the rational actor model will first be used. It seems that the belief to take action and finally launch India’s Mars Orbiter spacecraft was optimal among the stakeholders (India’s government, India’s space agencies, International) who were involved in the accomplishment of this project. This appears to be due to the evidence that after 51 missions attempted so far, where less than half had succeeded, was good enough evidence to keep trying until conclusion of the project. The missions must have gathered optimal information that supported their decision to continue pursuing. The fact that the mission’s budget and expenditures were far less than a conventional NASA project also gave them the justification to endure the launching of the spacecraft regardless of the controversial critics saying that India has more acute issues to spend money on. Evidence also suggests that India has always been in competition with China in matters of aerospace technology. Therefore, the success of this mission has filled nationalistic significance for India and it seems as a representative achievement over China who has not been so successful lately.

In order to show how the actions taken by the government of India might have resulted from a bounded rational behaviour, the four principals of bounded rationality by Jones (2003) would be applied:

Intended Rationality

India’s prime minister and his scientist officials in charge of the Mars Orbiter Mission had a goal in mind and directed their behaviour towards the accomplishment of this space mission. The cognitive and emotional constitutions, in this case, have promoted their goal-oriented behaviours. This is the reason why; the mission was completed regardless of all the beforehand failures. As Kopillil Radhakrishnan, chairman of ISRO (Indian Space Research Organisation) said: “I don’t like the phrase ‘frugal engineering’. ISRO’s general philosophy is cost effectiveness. The Russians look for robustness and the Americans go after optimisation. Our aim at ISRO was how do we get to Mars on a budget.” (Forbes, 2013)

Adaptation

India started its space program five decades ago. The Mars Orbiter Mission started in 2008 so until the spacecraft was launched, 5 years had passed. Also, there is evidence that this project was scheduled driven to the extreme and required long (18-20 hour) working days for scientists (Forbes 2013). Thus, it seems that there has been enough time for the decision makers to spend on this project, giving them a good understanding of the problems that caused the earlier failures. In this way, decision makers were able to overcome the limitations that would interfere in the fulfilment of their objective. In addition, the high levels of attention and motivation levels requested more mental resources to think more systematically which in turn allowed data to shape subjective inferences. India was determined to surpass China in this area.

Uncertainty

The uncertainty levels in all high-risk endeavours are always elevated due to the ambiguity inherited in problems says Jones (2003).

In relation to the Indian venture, uncertainty is definitely part of every space project, but the Indian spacecraft authorization committee was always confident to the core that they were going to succeed. How were they able to overcome this uncertainty? Earlier this month, they decided to carry out the four-second test to ensure that the long duration of idling didn’t affect the engine that carries corrosive fuel as one of the engineers in charge said; “Those were the longest four seconds when the engine had to test-fire. This confidence stemmed from the thorough tests the engine and the thrusters were made to undergo on ground before the Mars Orbiter space shuttle lifted off the ground from Sriharikota on November 5 last year (The Economic Times, 2014).

Trade-offs

The first behavioural tool for understanding trade-offs was Simon’s notion of satisficing. Implying that a person in an organisation stops trying the moment he/she encounters a good enough solution to a problem. Nevertheless, other authors disagree arguing that if a person adds information and decision-making costs constraints to choice, this will not cause bounded rationality to dissolve into maximising behaviour. In order to apply this concept to the Indian shuttle case, it is registered that this mission, as planned by ISRO, was a sophisticated exercise. Compared to other Mars missions, ISRO “had a smaller rocket and payload. This reduced the cost significantly but increased the mission’s complexity. Other Mars missions are not planned this way” (The Economic Times, 2014). So for them the information and decision making costs constraints lead to choose for a smaller rocket that secure the successful accomplishment of the mission. This trade-off was for ISRO, perhaps a very difficult one because it intensified complexity but they had a goal in mind, which was reducing costs.

In conclusion, many of the institutions and organisations that were involved in accomplishing the launching of Mars Orbiter shuttle had to make decisions that were bounded rational. They must have encountered with limited information where also their cognitive restrictions in their minds and deadlines to meet forced them to simplify the choices available. Nevertheless, their goals were met when they succeeded to enter Mars’ orbit with a spacecraft that costs a fraction of what NASA usually spends in one of their own.

References

CNN 2014: http://edition.cnn.com/2014/09/23/world/asia/mars-india-orbiter/index.html

Forbes 2013: http://www.forbes.com/fdc/welcome_mjx.shtml

The Economic Times 2014: http://economictimes.indiatimes.com/news/science/indias-mars-orbiter-mission-why-the-project-faces-one-of-its-biggest-tests-today/articleshow/43143447.cms

Write down how materials provided and collected have led you to develop your position on the Friedman-proposition

My previously position about Freeman’s statement was arguing against the phrase that “ the business of business is to increase its profits” was adopting a broader social identity. And after watching the documentary ‘”Not business as Usual”, I am confirming my point of view that nowadays a successful company is the one that has been able to implement social responsibility into their business strategies. Going from replacing virgin raw materials with recyclable inputs, transparency through the supply chain, it is not about the cheapest product and selling as much as it is possible anymore. Nevertheless, the challenges to become a social entrepreneur are big. It needs a high level of ingenuity and perseverance because at times they might encounter so many barriers unthinkable to overcome. Their mission is not to do business to increase profits but to become “billionaires of good deeds”, whose actions create a great impact in benefit of all.

 

IE Inspired Puzzles & Ex ante position _ SSPM Assignment 1

sairamiroslava

Choose your own correlation (own country) you see something in the system and think up 3 alternative explanations for it.

We all know that the transportation system is an important key driver of economies around the world. And we also know that the transport sector is highly dependent on fossil fuel making it one of the biggest contributors to GHG emissions. Between 1990-2003, emissions from this sector grew 1,412 million metric tons worldwide from which the sector’s share of C02 emissions also increased 23% by 2005 (IBRD, 2011). These figures are very alarming and considering the urgency to address solutions to tamper this environmental problem, little progress has been made in the mitigation arena. We have heard in all the United Nations Climate Change conference’s outcomes that many new rules and amendments to rules are generated to continue the fight against the increase of GHG emissions, yet research is telling…

View original post 965 more words

IE Inspired Puzzles & Ex ante position _ SSPM Assignment 1

Choose your own correlation (own country) you see something in the system and think up 3 alternative explanations for it.

We all know that the transportation system is an important key driver of economies around the world. And we also know that the transport sector is highly dependent on fossil fuel making it one of the biggest contributors to GHG emissions. Between 1990-2003, emissions from this sector grew 1,412 million metric tons worldwide from which the sector’s share of C02 emissions also increased 23% by 2005 (IBRD, 2011). These figures are very alarming and considering the urgency to address solutions to tamper this environmental problem, little progress has been made in the mitigation arena. We have heard in all the United Nations Climate Change conference’s outcomes that many new rules and amendments to rules are generated to continue the fight against the increase of GHG emissions, yet research is telling us that nothing has changed. This puzzles me!!!!!

One of those mitigating policies is called the Peak and License plate (in Spanish Pico y Placa). It was initially set in place in Colombia to help to control excessive traffic, and air and noise pollution during peak hours. This system impedes both private and public use vehicles with license plate numbers ending in certain digits from entering the city between certain times. So, for example; during the week, on Monday autos with license plates ending in 1 and 2 cannot go into the city between the rush hours from 7am until 9:30am, and in the afternoon, from 16pm until 19:30pm. This system has been extended to other countries in Latin America like Mexico, Santiago and Quito.

Initially, and superficially looking at it, it seems to be a very good idea to decrease the negative effects of heavy traffic by reducing the amount of autos, not only less congestions, noise, but also a decrease in CO2 emissions. This correlation should take a downward slope in time as seen in Figure1.

Figure1. Correlation between CO2 and number of autos due to the Policy Pico y Placa (hypothetical numbers)

Nevertheless, after a couple of years and to the surprise of many, the main objectives were not attained. The cities were getting overcrowded, more autos, noisier, and the air quality decreased considerably. The correlation would be more of a downward slope in the short-term and soon it would start going up showing that in the long-term the policy would not work as seen in Figure2. So what happened?

Figure2. Long-term correlation between CO2 and number of Autos due to the Policy Pico y Placa (hypothetical numbers)

It seems that during the assessment studies, complexity theory was underestimated or omitted completely. The unpredictable behavioural change of users and consumers was not fully addressed. Policy makers didn’t take into consideration the fact that in countries with high economic inequality standards like many of the Latin American, policies such as Pico y Placa creates an incentive for high-income households to buy a second car. What at first seemed to have been made with the best intentions, turned out to be more harmful for the environment. In Industrial Ecology, this problem is called a Rebound Effect. The rebound effect is that, the days when all cars are allowed to drive, most of the people now use both cars, while they only used one car before the policy was passed. There was an error in the design of the policy because it did obviously not lead to environmental improvement.

Some of the alternative explanations behind the inefficiency of this mitigation policy are: (at least for Quito, Ecuador where I come from)

1. Lack of an efficient public transportation system – people need to go to work and travel big distances and without a good public transportation system it is almost impossible. So many are obliged to buy a second car.
2. Lack of good road infrastructure – there are no wide roads in the city so having more cars means more traffic jams and more noise.
3. Lack of organisation and a good effective penalty system by the municipalities in charge of monitoring the process e.g. Penalty fines are outrageously high not relative to income levels per capita. In this way, people prefer to buy a second car than to risk having to pay such a huge penalty and to risk loosing their jobs.
4. Culture plays an important role in the degree of rule acceptance by the people. In Quito, people are very reluctant to obey rules, which doesn’t help to maintain traffic order.

Consequently, these examples should incite policy makers and planners around the world to look at and treat the problem as complex systems. This requires searching for strategic information that would help to avoid experiencing the unpleasant consequences and especially the waste of time and money. Awareness programs can efficiently serve the purpose of teaching people the importance of respecting rules in order to keep order. In addition, planners have to stop looking at their own personal monetary interests that only intensify corruption and blackmail levels. They need for once start thinking about the position of the suppress parties in this case; people and the environment.

Develop and ex-ante position on the following proposition: “The business of business is to increase its profits”

To me, the statement “the business of business is to increase its profits” is the ex ante position of many companies who traditionally performed with the objective to increase its profits in order to maximise shareholder equity. Their main objective has been to make money at all costs (social and environmental). But yet this is embedded in the American and European capitalist systems since the early times of the Industrial Revolution. Back then it was necessary because capital accumulation kept growth going, keeping in this way society from falling into stagnation. However, times are changing and now there are examples of companies which have been able to succeed because they have incorporated into their frameworks societal, human and environmental values. Therefore, the statement could better change to “the business of business is to increase its profits to meet stakeholder’s needs by producing goods and services that improve the lives of users; by providing jobs and enhancing workers’ quality of life; by responsibly monitoring their production business chains via a Circular Economy approach; and by ensuring financial viability, which provides resources for improvements and innovations. Consequently, developing an ex ante position to the traditional core of doing business would be like a marketing strategy that incorporates social and environmental costs as part of their project proposals. In short, by incorporating responsibility for people and environment as part of a company’s mission and vision, corporate executives are opening doors for future survival.

Source:

Hoornweg D., Freire M., Lee M., Bhada-Tata E., Yuen B. 2011 “Cities & Climate change. Responding to an urgent Agenda”. The International Bank for construction and development/World Bank.