Foxconn’s Management Crisis

BY GROUP 7, BUSINESS ENGLISH CLASS

Structure• Foxconn • Foxconn suicides• Analysis of causes • Suggestions

Foxconn • Foxconn, is a Taiwanese multinational

electronics contract manufacturing company. • Foxconn's largest factory worldwide is in

Longhua, Shenzhen, where hundreds of thousands of workers are employed at the Longhua Science & Technology Park

Foxconn suicides• On January 23, 2010, Foxconn employee Ma

Xiangqian committed suicide by jumping off his dorm building. Starting from then, a total of 13 workers committed suicide in the first half of the year, resulting in 10 deaths.

Analysis of causes • Management system• Working condition• Compensation• Labor contracts• Lack of labor relations

Management system• Foxconn "developed a kind of quasi-military

management system", which, along with tight production schedules, which is based on theory X managers

• Foxconn uses the Results-based appraisal and adopts strict management by objectives.

• According to Taylor’s Classical Theory, Foxconn deploys time-and-motion studies, statistical control processes, and computerized engineering devices to test worker capacity.

• Direct approach to Leadership: linking incentives directly to performance developing clear work rule and procedure. Based on the Skinner’s Reinforcement Theory, workers are scolded and punished when they talked on the line, failed to catch up with the high speed of work, or made mistakes in work procedures.

Working condition• Long working hours: according to Taylor’s

Classical Theory Foxconn adopts time wage and gives higher wage when the workers work overtime. However, according to The Hawthorne Studies, this also cause resentment

• High job specialization: cause boredom and breakdown

Working condition • Discrimination against mainland Chinese workers by

their Taiwanese co-workers and security guards• Lack of working relationships :Workers don't have

much time to communicate with each other and they feel quite lonely. they work six days a week with one day off and every day they work two hours overtime.

• Both of them cause the lack of social need and esteem needs according to Maslow’s Hierarchy of Human Needs

Compensation • Low wages: The minimum wage in the factory

does not meet the living costs of its workers. In this situation, workers find themselves with no other options but to work demanded overtime hours.

Labor contracts• For many workers, before signing the

contract with Foxconn, they are normally not informed of contract details, and most of them are unaware of their legal labor rights.

Lack of labor relations• Freedom of assembly is under many

conditional situations which up to state or the government to decide if it is lawfully permitted or not, therefore workers are not be able to establish their own union randomly without state permission. In fact, it is difficult for workers themselves to raise their voices and to protect themselves actively.

Conclusion • The bottom line for management is daily

output, not workers’ feelings. Foxconn’s workers lack of respect and concern. According to Herzberg’s Two-factor Theory ,Foxconn lack of almost all the maintenance factors so that the workers are under great job pressure and can’t be satisfied let alone being motivated.

Suggestions

For the company---to create a fair, equitable and effective HRM system

• using a sophisticated recruitment process, developing job-specific tests to solve Foxconn’s go through the motions audition

• putting well-organized training programs into action to improve the skills of its workforce, for example: production-line employees can be trained to operate new, more efficient, computerized equipment; managers at all levels can be taught how to implement total quality management, ect.

• methods: diversity training, on-the-job training, role playing, E-learning, business games and case studies

• conducting fair, equitable and legal performance appraisal and feedback

• although Foxconn adapts performance management, it’s unable to help motivate employees to perform at a high level and give informations about their strengths and weaknesses

• methods: accurate and fair forced-ranking method, asking employees to appraise themselves

• feedback: formal appraisals as well as informal appraisals

• setting up satisfactory pay and benefits system (increasing base pay, overtime pay and bonuses for high performance ), complying with government-funded programs to provide benefits to employees

• developing perfect labor relations to resolve human resource issues and establish good working relationships

• managing the company with much more humane care; leaders should visit the workers from time to time, know more about their needs and suggestions, talk about their feelings, etc.

• rebuilding corporate image by apologizing to the society especially the victims families, assuring workers political rights, giving workers more freedom together with spare time to relax themselves, ect.

• improving working conditions, offering counselling, turning to the outside psychological voluntary organizations and opening to the society to help employees discover more identities and gain social integration

For the employees---to value lives, try to work with a positive attitude toward life

• communicating with colleagues as much as possible to seek solution to loneliness

• getting along well with colleagues, not just regarding them as anyone who work with you but managing to make friends together

• once receiving infringement or happening industrial conflicts, employees can use these methods to pressure the company, for example, working-to-rule, picketing and strike

Thank you!!