Tracing the impact of globalization from the factory floor to the corporate board room
CNR Professor Dara O'Rourke has forged important ties to factories around the world in an effort to understand the impact of global supply chains on workers, communities, and corporations. His research benefits both the board room and factory.
The factory was quiet. For months, Dara O'Rourke had been tracking university sweatshirts back to their point of origin. In 1998, the search lead him to a factory in Shanghai, China, where he'd hoped to interview workers and inspect conditions. But when he arrived, the factory, which had been churning out shirts not long before, was silent. Thousands of miles away, the U.S. government had just changed its tariff structure. American financial managers and sourcing agents raced to their computers, and their keystrokes sent ripples out into the global economic ether, lifting garment-making contracts out of China with the blink of a cursor. Soon after, factory bosses delivered the news to workers, as well as to O'Rourke: the orders had gone to Pakistan.
As the world's market become increasingly fluid, factory orders can move half a world away instantaneously. This provides the world with lower cost goods and brings money to developing countries. But it also has brought environmental, health, and safety problems to some of the poorest and most poorly regulated parts of the world.
An assistant professor in the Department of Environmental Science, Policy, and Management, O'Rourke is looking for practical ways to produce goods in these global supply chains while actually improving conditions for workers, communities, and the environment. To do this he travels the world, from the top to the bottom of these production systems, in search of strategies for preventing pollution and workplace problems. From the corporate headquarters of global brands and retailers to some of the most polluted and hazardous industrial zones in the world, O'Rourke says he "seeks to empirically study the networks that produce the products we love to consume." Gathering this data allows him to analyze the root causes of problems in these systems and to design prevention strategies to prevent labor and environmental problems that they can create.
This research has landed O'Rourke in the middle of academic and activist battles about globalization, regulation, and the future of productions. But O'Rourke is well suited for these stormy waters- in large part because he is willing to spend time in third-world factories, yet still talks in terms of "production networks" and "strategic monitoring systems," the depoliticized language of the corporation. His research has even convinced companies like Nike to pressure manufacturers to make improvements in their factories around the world.
Most recently, his research brought him to El Salvador, where only a few years ago the country was booming with new factories manufacturing t-shirts for the U.S. market. Today, O'Rourke says, with changes in global trade rules, Chinese factories are out-competing El Salvador's, forcing many factories in the tiny Central American nation to close. In this competitive environment, finding ways to improve the lives of workers or to prevent pollution has hardly been the first thing on the minds of the captains of industry.
Yet the owners of one factory near San Salvador has taken O'Rourke up on his vision of improving conditions while simultaneously improving the factory's productivity. This vision to redesign manufacturing processes to both be more efficient and more environmentally and socially sound is critical for any alternative to the so-called "race to the bottom" -the deterioration of conditions that accompanies the persistent lowering of production prices. O'Rourke visits El Salvador two to three times a year and has meetings via conference call with the managers of the factory every few weeks. He worked with them to totally revise their pay and incentive system, with a goal of reducing their work hours from 60 to 40 per week without reducing their wages. He also guided them through a number of technical changes that reduced ergonomic and other health hazards in the factory.
O'Rourke became well known in 1997 after his report on environmental and health conditions in Vietnamese shoe factories helped spur consumer protests against Nike. Given this history, some might be surprised by O'Rourke's current relationship with garment makers, but he says he can make a bigger impact by advising the firms that drive these industries than he can by simply exposing problems in their supply chains. In exchange for helping them rigorously analyze their operations (and often improve their efficiency), O'Rourke demands greater transparency from the manufacturer and a real commitment to problem solving.
The Salvadorian factory owners, for example, provide access to their records -an assistant verifies these records and sends the electronic files to California. In his Berkeley office, O'Rourke flips on the enormous screen of his Mac and opens a spreadsheet that fills the entire monitor. He scrolls down, pointing out pertinent information from factory time clocks, wage reports, productivity data, and clinic visits. "There were 33 people in this work group," he says. "They were making Nike Brazil Soccer jerseys. And between 7:15 and 8:15, they produced 60 units." But more importantly, he then hones in on some of the surprises of his research (which he is conducing in collaboration with Chuck Sabel of Columbia Law School). "We can now track hour by hour exactly what happens when an order from a global brand flows through the plant. We can track when overtime goes up to meet a delivery schedule. We can see if accidents go up as workers work late to meet those delivery times."
This kind of analysis helps O'Rourke identify root causes of problems in global supply chains and generate hypotheses about what might be done to prevent those problems.
And while this research provides rich data for academic analysis, it also informs public debate about sweatshops, globalization, and the environment. For instance, while international organizations and corporate monitors have increasingly tried to police sweatshop labor, many factory managers have perfected methods of hiding poor conditions. O'Rourke's research seeks to move beyond current checklist auditing of factories toward more systematic and strategic monitoring systems.
O'Rourke knows he can only do so much working with individual factories. The real potential for change comes not in reforming individual plants, he says, but in reforming the corporations at the top of the chain -the brands that consumers recognize thousands of miles from factory floors. That's why he is increasingly focused on developing metrics and methods that can be applied across global production networks.
Influencing global brands and retailers requires different tactics than influencing factories. Brands have succeeded in distancing themselves from environmental and human rights issues; instead, their focus is psychological merchandise: the images and feelings that consumers associated with their wares. But because the brands are so concerned with perception, they can be susceptible to public pressure to do the right thing.
The feelings that brands artfully connect with their products can often dissolve when activists -or professors -show the very real connections between a product and the conditions under which it's made. But O'Rourke's research is far from a moral crusade; instead, it uses root-cause analysis to improve efficiency, communication, and logistics. "I realized I was never going to get very far if all I did was bust midlevel factory managers for making people work long hours," he says. "Now I can look up and down the supply chain to figure out what's really going on."
"We can see, for example, if Nike or some other company has told the factory manager, 'We need 20,000 units in 21 days, and if you can't do it we'll go somewhere that can.' To use another example, we can see if a delay at the docks is a part of the problem, or if it's some other logistical issue. The more we understand about how the system works, the more solutions we can come up with."
There is much speculation about the economic impacts of globalization, but it often misses the very real, human-level connections -where consumer trends in the United States can mean layoffs in Central America and a simple change in tariff laws can suck jobs out of China and deposit them in Pakistan. It's easy for proponents of globalization to ignore such connections with the conviction that rising waters will lift all boats. And it's equally easy for opponents to denounce globalization as bad for workers. But O'Rourke has found that easy answers are not enough.
"In part I'm working to empirically document the real impacts -both positive and negative -of global production," O'Rourke says. "But I'm also working to explore alternative systems that can benefit workers, communities, the environment, and maybe even consumers back here in Berkeley."