Lecture 9 Stakeholder Management

Question 1

def. stakeholder

Answer 1

• Any actor who could be affected by the organization’s actions
• Any actors who seek to influence the organization’s actions

Question 2

What are some trends with child labour?

Answer 2

• different laws around Canada
• different agreements to make sure products are ethically sourced (Chocolate firms, Minute Maid, Nike)
• child labour is decreasing worldwide, international Labour organization is helping with this
• soccer ball industry in Pakistan: strides to make child labour less

Question 3

describe activism in terms of preconceived notions and perspective: thin activism

Answer 3

frozen notions, fragmented perspective

Question 4

describe activism in terms of preconceived notions and perspective: thick activism

Answer 4

fluid notions. integrative perspective

Question 5

describe activism in terms of location, pace division of labour, associational style, and goals : thin activism

Answer 5

Loc: remote

Pace: activist-driven

Division of labour: assembly-line

Associational style: paternalistic

goals: quantitative

Question 6

describe activism in terms of location, pace division of labour, associational style, and goals: Thick Activism

Answer 6

location: rooted
pace: problem-driven

division of labour:
craft-based

associational style: dialogical

goals: qualitative

Question 7

describe Ikea with relation to child labour in India’s carpet industry in the 1990s

Answer 7

-thin activism on child labour
– Estimated 40,000 children of 500,000 workers in carpet makers
in India
– US & MNC response: good intentions but bad results
– US legislation threatened trade sanctions if child labour not ended, resulting in child labourers in Bangladesh ending up on the streets
– Some multinationals built schools for children but did not go deeper, schools empty
– Focus on “Rugmark” certification that no child labour used in
rug making – difficult & expensive to monitor

Question 8

describe Ikea’s era of thick acivism

Answer 8

found underlying problem was
– indebtedness to loan sharks; inability to pay resulted in women putting children up for collateral, hence children working at looms

• Ikea set up self-help micro-credit groups for women to allow them
to save and to borrow at market rates rather than loan shark rates
– Ikea sponsored open air 1 year “bridge schools’ to help child workers transition to regular schools, bridge schools staffed by volunteers using Unicef “joyful learning” approach, 21,000 gained literacy
– Ikea does not participate in Rugmark, IKEA says it’s impossible to monitor 175,000 handlooms, many in homes
– IKEA argues it addresses underlying issues; critics argue it should stop buying carpets in India if it won’t subscribe to Rugmark;
• Ikea Foundation contributed $200 m in cash plus in kind
contributions to UNICEF programs aiding children and families in
India
– 2015, UNICEF received €17 million from IKEA Foundation which operates
19 programs in India for early childhood development, education, health, child protection

Question 9

describe stakeholders, public choice, and political economy of trade

Answer 9

• Political economy of trade: consumers versus concentrated stakeholders (“special interest” groups)
• Role of domestic politics in formulating a country’s international trade policies.

Question 10

describe “public choice” analysis (Buchanan and Tullock)

Answer 10

• Those stakeholders who would benefit from trade protection
(affected industries, firms & unions) face relatively large
benefits/costs if protection increased / removed
– Therefore these stakeholders have strong incentive to
organize for protection

• Those stakeholders who would benefit from trade liberalization (consumers and firms buying from
protected industry) face smaller benefits/costs on a smaller scale individually if trade is liberalized / restricted
– The cost of defeating the protectionist stakeholders is very
high relative to the benefits of liberalization to the individual consumer
– Therefore consumers have less incentive to organize and may adopt “free rider” stance: let someone else bear political costs of organizing to remove tariffs