MNE and Codes of ConductThe Need for a Reassesment

Claude Didry

Sociologist/CNRS

IDHE-ENS of Cachan

Issue of the Paper

• Firm is taken as a granted actor in the labor relation and more generally for the share and the stakeholders. The basis for the discourse on CSR and the initiatives of ILO and UNO

• Codes of conduct as regulating the conduct of Firms, wether juridically (Hard Law) or ethically (Soft Law), through implementation of international principles (esp. 1998 ILO declaration)

Uncertainty and Firms

Stock ExchangeMittal

SourcingNike and Viet Nam

Brain and KnowledgeSaatchi and the Rolling Stones

FIRM

• What happens if we integrate the uncertainty on the Firm it self?

Uncertainty examples: • Stock exchange and mergers: TLM without

moving?, from Arcelor to Mittal, or From Alcatel to Alcatel-Lucent, or from Rover (after the Honda cooperation) to Ford and XXX if you work for Jaguar…

• The instability of sourcing and subcontracting• The property of innovations and discoveries

Hypothesis

• Codes of conduct as stimulated by international initiatives based on the assumption of the firm as an actor

• But expressing the coordination of a collective activity under the threat of uncertainty

• Codes as expression of conventions, « conventions of the firm » (based on the « conventions du travail » by Robert Salais)

Methodological Implications

• Reading the codes, instead of wondering how they are produced or applied

• Lexical analysis of the corpus of codes collected by ILO tripartite declaration initiative

Plan of the presentation

• The international initiatives since the 70’s and the corpus

• Uncertainty on the firm

• Interpretation of the analysis of the corpus

1. International Initiatives: from a code of conduct to the

multiplication of codes of conduct• 70’s, Allende MNEs as a threat for

Representative democracies• The 1977 ILO Tripartite Declaration, OECD

Guidelines, UNO project of code of conduct• Results: 1998, ILO declaration on

fundamental rights2000 the Global Compact• Interest for the MNEs initiatives

The corpus

2. Uncertainty on the firm• Fundamental uncertainty of the capitalist firm: the issue of

the (in)corporation with capacity to own stocks of other corporations: who works for who, when Renault sells Renault Trucks to Volvo Trucks who merges with Scania.

• Uncertainty of yesterday-the integration of the process• Uncertainties of today-sourcing and advertising, the Nike Model: € 1 M for a

training week of the French Football Team, € 35 p. month for a vietnamese worker in a subcontracting firm.

-the property of the products, if discoveries and innovation, central in a knowledge based economy

Three management issues

• In front of the old uncertainty: Avoid what could paralyse processes, for example strikes

• In front of image and furniture uncertainty: Avoid what could block the circulation of the product

• In front of technical and scientific uncertainty, encourage workers specific investment and master critical resources

(Zingales 2000)

3. The conventions of the firm

• Not surprisingly codes share a common interest for ILO principles, but in relation with specific context taken in account in the codes.

• Codes of conduct targets the activity of the firm, not the firm itself. It means activity of the people working for the firm and activity of the people who control the people working for the firm.

Two dimensions

• Goods’ markets vs property of the assets

• Productive organisation vs workers activity

Linked to

• Four types of codes and firms in two dimensions

Conduct of who: behind the firm, the workers

• It depends on the convention-integrative firm: the code as opening access to

stakeholders (consumers, workers)Example for the workers in P & G“We accept personal accountability to meet the

business needs, improve our systems and help others improve their effectiveness. We all act like owners, treating the Company’s assets as our own and behaving with the Company’s long-term success in mind.”

• Firm as guaranteing working conditions“- We will not tolerate forced labor or labor which

involves physical or mental abuse or any form of corporal punishment.

- Under no circumstances will the exploitation of any vulnerable individual or group be tolerated.

- Wages and benefits must be fully comparable with local norms, must comply with all local laws and must conform with the general principle of fair and honest dealings.” (C&A)

But the guarantee often limited to contractors (except for Barclays)

• Supervision and control• “Every employee has the responsibility to ask questions,

seek guidance, report suspected violations, and express concerns regarding compliance with this policy and the related procedures. The Boeing Company will maintain a program to communicate to employees its commitment to integrity and uncompromising values, as set forth in the Boeing Values. The program will inform employees of company policies and procedures regarding ethical business conduct and assist them in resolving questions and in reporting suspected violations. Retaliation against employees who use company reporting mechanisms to raise genuine concerns will not be tolerated.” (Boeing)

• Property of knowledge based products“When you joined IBM, you were required to sign

an agreement under which you, as an employee of IBM, assumed specific obligations relating to intellectual property as well as the treatment of confidential information. Among other things in the agreement, you assign to IBM all of your right, title, and interest in intellectual property you develop when you are employed in certain capacities, such as a managerial, technical, product planning, programming, scientific or other professional capacity.”

Conclusion

• What consequences for the Capability and the TLM approaches?

• Capability as a way to belong to several social groups (valued functionings) (and not as an individual capital), taking several meanings in the different labor contexts

• Mobility as a threat for property and control (esp. In the case of the Sublims)

• Mirror effect with the labour conventions