The Unintended and Indirect Effects of Performance Measurement and Regulation on Productivity A Mult.docx
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The Unintended and Indirect Effects of Performance Measurement and Regulation on Productivity A Mult.docx
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TheUnintendedandIndirectEffectsofPerformanceMeasurementandRegulationonProductivityAMult
TheUnintendedandIndirectEffectsofPerformanceMeasurementandRegulationonProductivity:
AMultidisciplinaryOverview
1.0.Introduction
TheenvironmentalimpactofproductsandpracticeshasbecomeanimportantissueofdebateandconcernoverthepastfewdecadesinUnitedKingdom(UK).Throughacombinationofpublicpressureandgovernmentinterventionthroughlegislations,stakeholders(companies,institutions,consumersandothers)arebeingforcedtoconsidertheenvironmentalimpactoftheiractions.ThemainphilosophybehindenvironmentalpolicieshasbeenthepolluterpaysprinciplewhichwasinitiallyincorporatedbytheEUintheEECtreatyof1986andlateradoptedbyUK.Theconceptofproducerresponsibilityhasgrownoutofthisprinciple.Howevervastlydifferentinterpretationsofwhatconstitutesa‘producer’responsibilityhasledtothecurrentstatusof‘sharedresponsibility’whichdividesthecostamongvariousstakeholdersandsectorsoftheindustry.
Thepurposeofenvironmentlegislationsistopreventandreduceenvironmentalproblemscausedbyproduction,use,ordisposalofgoods.Someofthecommonfeaturesoftheselegislationsarephasingoutofcertainsubstances;producerresponsibilitiesinproduction,wastecollectionandrecoveryoftheproduct,anddutytoprovideinformationanddocumentationtothegovernmentandconsumer;governmentapprovalfortreatmentofcertainsubstances;andendoflifeclauseforcertainproducts.Thedirectimpactofthislegislativecontrolasidentifiedinliteratureincludeproductandprocessredesigntoincludeenvironmentallyfriendlymaterialsandprocesses;lifecyclemanagementforwastedisposal,recyclingandreuse;andgovernmentstructuresandmechanismstomonitorcompliance(LowandWilliams,1998;Kim,2002;Hug,2001andmanyothers).Thesechangesinturnhavehadsomedirectconsequencesonvariousstakeholderslikeincreasedcostsandresponsibilities,andchangeinnatureandfocusofR&Dandinnovation(Kim,2002).However,theselegislations,asincaseofotherlegislations,alsohavethepotentialtoproducesecondaryandtertiaryimpactsonvariousstakeholderswhichareeithernotclearlyvisibleortaketimetoshowtheirimpact.
SeveralstudieshighlightthesignificantimpactofregulationsonproductivityandthereportofESRC[2004]clearlypointsatenvironmentlegislationsasoneofthepossiblesourcesoftheUKproductivitygap.However,onlyfewstudieshaveattemptedtounderstandtherelationshipbetweenthesecondaryortertiaryimpactsoftheseregulations,andproductivityanditsrelatedareas.Ifonecastsanetwideenoughhoweverbydefining‘impactorconsequence’ratherbroadlyandsearchindirectaswellasdirectevidenceitispossibletoidentifysomestudiespotentiallycapableofsheddingsomelightonthiscauseandeffectrelationship.Thispaperisasystematicreviewofthesestudiesinordertoidentifysecondaryandtertiaryimpactsofenvironmentallegislationsonvariousstakeholderswithspecialsearchfor,End-of-life(EOL)legislation,withtheobjectiveofunderstandingpossiblereasonsfortheUKproductivitygap.
Alongwiththechallengeofidentifyingthenatureofthesetertiaryorsecondaryeffects,onvarioussocietalstakeholdersincludingthedecisionmakersthemselves,i.e.,thegovernment,definingtheseeffectshasbeenanotherchallenge.Thesecondaryandtertiaryeffectsareclassifiedasindirect,unintendedandunforeseenaccordingtothenatureofeffectitisseentohaveononeormorestakeholders.
2.0.Definingdirectandnotsodirect
Thereisagrowingunderstandingthatenvironmentfactorshaveanimpactonsociety(Rosenzweigetal.,2001;Griffinetal.,2001;Deudney,1999).Therearedirectcauseandeffectrelationsbetweenenvironmentandsocietythatdonotrequiredebate.Howeveridentifyingindirectcausality,complexcausalchainsthatbringunpredictablesurprisesandthereflexnatureoftheenvironmentrequirescreativeanalysisandisamethodologicalaswellasscholarlychallenge(Hug,2001).Asimplehumanmanagementdecisionmayleadtochangesintheenvironmentwhichinturncanimpacthumanpopulationinnewandoftenunforeseenways.Forexample,asimplegovernmentaldecisionofforestfireinIndonesiatoclearlandforagriculturecausedacloudofsmoketocovermuchofSouthAsia(Fraseretal.,2003).Similarly,regulatoryfacilitationofintenseindustrialactivityofacertainkindinCanadaandAustralia,whichcreatedcloudsofaerosols,islinkedtodroughtsinAfricaduringthe1980s(Nowak,2002).Theseexampleshighlightthevariouscomplexitiesintheinteractionbetweenenvironmentaldecisionsandsocietalstakeholdersasthenatureofresponsemaytakeyearstobefelt,thepopulationimpactedmaybedifferentfromthepopulationwhichisaffectedbytheenvironmentaldecisionsanddifferentstakeholderswillhavedifferentabilitytoadapttothedecision.Henceitisrequiredtomovebeyondsimplecause-and-consequencetounderstandthesenot-so-direct,secondaryortertiary,impactsofenvironmentrelateddecisions.
∙Defining‘indirect’consequence
Thedictionarydefinitionof‘indirect’refersto‘havinginterveningfactorsorpersonsorinfluences’,notleadingbyastraightlineorleadingthroughdifferentlinesbutdescendingfromacommoncause.Analyzingsocietyrelated(stakeholders)consequencesthroughthesedefinitionsonecandefineindirectconsequenceofenvironmentallegislationsasthosefactorsorinfluencesthatdirectlydescend/emergefromthedirectconsequences,andleadtochanges(movement)towardseffective/bettermanagementofenvironmentandsociety(socio-culturalaspects).Exampleofsomeoftheindirectconsequencesofendoflifelegislationmayincludechangesinorganizationalaccountingpracticesorcreationofspecializedroleintheorganizationstructure.
∙Defining‘unintended’consequence
Thedictionarydefinitionof‘unintended’refersto“anyactivityorinfluencenotdoneormadeorperformedwithpurposeorintent”.Theconsequenceisnotpartofandhasnotbeenplannedintheactivityorinfluenceinquestion.Thenatureofthewordsuggests“unanticipatedeffectthatcouldbepositiveornegativeandwhichleadstomakingdiscoveries,byaccidentandsagacity,ofthingsnotinquestoforaneffectwhichcouldbesourceoffurtherproblems.Forexample,UnitedStateshadimposedquotasonimportsofsteelinordertoprotectsteelcompaniesandsteelworkersfromlower-pricedcompetition.Thequotasdidhelpsteelcompanies.ButtheyalsomadelessofthecheapsteelavailabletoU.S.automakers.Asaresulttheautomakershadtopaymoreforsteelthantheirforeigncompetitorsdo.Sopolicythatprotectedoneindustryfromforeigncompetitionmakesitharderforanotherindustrytocompetewithimports(Norton,2006).Possiblecausesofunintendedconsequencesincludeworld’sinherentcomplexity(leadingtoeitherignoranceorincompleteanalysis),contraryincentiveslikeintheexampleofUSsteelindustry,orcognitiveoremotionalbiases,i.e.,immediateinterestsofpressuregroupsorsocialvalues(Merton,1936).
Thereforeforthereviewweidentifyunintendedconsequenceaschangethatmaynotdirectlydescendfromadirecteffect,andthatcreatessomehindranceforeffective/bettermanagementofenvironmentorsociety(socio-culturalaspects).
∙Definitionof‘unforeseen’consequences
Unforeseenconsequenceisdefinedas“unanticipatedanddisconcertinglinesofdevelopment”(Glidden,2000).FirsthintedatbyAdamSmith(1904)intheWealthofNations,whileheusedtheterm“invisiblehand”,itwasusedtodescribe‘unforeseen’onlyonce,inthefollowingquotation:
"..[B]ydirectingthatindustryinsuchamannerasitsproducemaybeofthegreatestvalue,heintendsonlyhisowngain,andheisinthis,asinmanyothercases,ledbyaninvisiblehandtopromoteanendwhichwasnopartofhisintention.Norisitalwaystheworse(orgood)forthesocietythatitwasnotpartofit."WithintheunderstandingfromGlidden(2000)andSmith(1904),wecandefineitas“anysuddenorunexpecteddevelopmentthathasthepotentialofcreatingeco-socio-culturalimbalanceinthesociety”.Additionallythemagnitudeofchangewouldbelargerin‘unforeseen’than‘unintended’.
3.0.Theoreticalframeworks
3.1.Theeconomic-libertyperspectiveoreconomictheoryofregulation
Sometimesknownastheprivateinterestperspective,itbelievesthatmarketisthebestmechanismformaximisingsocialandeconomicwelfare.Ittreatspoliticalandbureaucraticmotiveswithsuspectandhighlightstheroleofinterestgroupsinregulationformation(Wilson,1980).Itbelievesthatinademocraticsystemgovernmentswillestablishpoliciestonotonlycatertointerestsofthegeneralpublicbutalsotosatisfyinterestsofspecificpressuregroupsandeveryindustryoroccupationthathasenoughpowertoutilisethestatewilltrytogetafavourableregulationinplace(Stigler,1971).Someofthesalientfeaturesofregulations,fromthisperspective,are:
∙Justlikeelectedofficials(forvotes)andappointedofficials(forwealth),industryalsoworksasapressuregroupinordertoacquireregulationsfortheirbenefit.
∙Oftenregulationsgetformedkeepinginviewtheinterestgroup’sperspectiveratherthanoftheoneswhoaretoberegulated.
∙Evenifagrouphasastrongincentivetoorganiseasapressuregroupitmuststillacquireanduseinfluence.
Thevirtuesofthisperspectiveonregulationarethatitcutsawaythenaïveassumptionsthatgovernmentofficials(electedorappointed)areselfless,altruisticindi
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