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Nokia's reputation and the SOMO Report

Rechten: Alle rechten voorbehouden

Nokia's reputation and the SOMO Report

Rechten: Alle rechten voorbehouden

Samenvatting

In November 2006, SOMO published a report that criticised labour conditions in Nokia's factories in Asia. This report revealed conditions where workers work up to 72 hours a week with compulsory overtime, have insecure employment contracts and work in unsafe factories, where no or inadequate protection is offered while working with toxic chemicals. Research also showed that wages are below minimum wage, workers suffer inhuman treatment and are rarely aware of their rights or of Nokia's Code of Conduct. When doing piece work, quotas are often set extremely high, women are often fired when they become pregnant and there is no freedom of association.
This research focuses on Nokia and aims to find out whether the conclusions of the SOMO report and the publicity that followed afterwards had any harmful effects for the reputation of Nokia among consumers in The Netherlands. The target groups of this research are consumers and potential consumers of Nokia between the age of 18 and 65.
Nokia is the largest supplier of a wide range of mobile phones and its goal is to have the best quality products and services in the mobile phone industry. The company has a strict set of supplier requirements that are integrated in the contracts with their subcontractors and suppliers. Nokia tries to do business with suppliers that have the same standards as Nokia, but if the ethical performance of one of its suppliers might become questionable the company will compel such a supplier to take corrective action. However, if a supplier refuses to change any of the issues addressed Nokia is prepared to reconsider its business. In order to assess whether labour conditions at its production sites meet international standards, Nokia's Code of Conduct and local labour laws, the company conducts in depth assessments.
China's law states that a workweek contains 40 hours, forced overtime is not allowed, overtime is limited to 3 hours a day with a maximum of 9 hours a week. All workers have the right to a contract and paid annual vacation. It is forbidden to set unreasonably high quotas for workers doing piece work and workers have the right to organise in unions. Furthermore, no discrimination will occur on basis of gender and it is prohibited to fire women during pregnancy.
According to Thailand's labour law employees may work a maximum of 48 hours a week and 42 hours when labour is considered dangerous. Employees are entitled to an hour break a day and at least one day off a week. Forced overtime is forbidden, except when work is very urgent to which employers have a right of overtime pay. Employees are entitled to paid annual holidays and women are also entitled to 90 maternity leave days a year.
Pressure groups that are important to Nokia in the Netherlands are SOMO, MakeITfair, Goodelectronics and Greenpeace. They focus on labour conditions and the harmful effects the electronics and ICT sector have on the environment. Also the Dutch consumer organisation Consumentenbond is increasingly providing more information on corporate social responsibility.
Nokia's reputation, assessed by emotional appeal; products and services; financial performance; vision and leadership; workplace environment and social responsibility, shows that the company has built a strong reputation over the years. This means that if an issue appears it is not very likely that Nokia's image will easily be damaged.
Only a couple of rather small articles have been published by the Dutch press about the SOMO report neither of those articles criticised Nokia, they just summarised the main findings of the report. One article in Consumentenbond criticised the entire mobile phone industry for its practices, not Nokia in particular. The articles that have been published about Nokia in general almost all shape a positive picture of the company.
Research into Nokia's corporate image shows that loyalty of Dutch consumers to Nokia is high. They also seem to be aware that Nokia provides the best quality phones in the mobile phone business, is innovative, offers a fair price and has user friendly phones. Consumers do not seem to be aware of Nokia's positive attitude towards corporate social responsibility (CSR), as well of the fact that its policies concerning human rights, labour conditions and the environment are more developed than those of other mobile phone brands. Although only a very small number of consumers had heard of the SOMO report, research shows that a large group of consumers would no longer buy Nokia products if the company is accused of having serious labour conditions in their factories in developing countries.
It has become clear that the SOMO report did not have an effect on Nokia's reputation among consumers in the Netherlands. This has to do with the fact that the Dutch press did not publish much about this report, the media overall publishes positive articles about the company and the fact that consumers give more importance to social and environmental issues other than labour conditions. Since the company enjoys a strong reputation it cannot be easily damaged by such a report. However, Nokia needs to be aware that research shows that a report, like the one by SOMO, could have a serious effect on the company's reputation if more attention will be given to it by the media. Especially, since the media is slowly starting to publish more about issues concerning labour conditions in the technology sector. Although Nokia seemed to have handled this issue well, by responding to it fast and by being transparent about its own investigations, it needs to come up with a new strategy for the future.
CSR is of growing importance in today's society. It is also becoming increasingly important for organizations to communicate CSR policies and activities in order to inform and involve stakeholders and to create a dialogue. But, excessive promotion of CSR is considered by the public only as a way to receive credits. To avoid direct CSR promotion, but at the same time make a clear statement of what Nokia stands for, a good strategy would be to launch a foundation that is specialised in changing labour conditions and standards of living in developing countries. This foundation will carry the Nokia name but will be independent. Primary target groups that need to be addressed are Dutch consumers between 18-65 and pressure and interest groups. The secondary target group will be the media in the Netherlands.

Toon meer
OrganisatieDe Haagse Hogeschool
AfdelingESC Hogere Europeses Beroepen Opleiding
Jaar2008
TypeBachelor
TaalEngels

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