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Foxconn Suicides Case Study

Introduction

Foxconn Technology Group is a subsidiary of Hon Hai Precision Industry Company Ltd, a Taiwanese company which is a major electronics manufacturer catering to famous-name brands including Sony, Apple and Nokia. Along with the first manufacturing facility established in Shenzhen, China in 1988, around 450, 000 workers are now employed at the Foxconn City, which intends to act as both working and leisure spot to the employees.

Foxconn has been involved with several controversies, relating to how it manages employees. It's mostly known by the general public for the series of suicides this year 2010. The 2010 Foxconn suicides occurred between January and November, 2010, when eighteen Foxconn employees, aging from 18 to 24, attempted suicide with fourteen deaths. Though investigation has found that employees' personal problems may cause these to commit suicide, low income, enormous working pressure and a lack of communication opportunity are generally accounted for the incidence.

The suicides drew much media attention and in this project, we will concentrate on analyzing the managerial problems of Foxconn which lead to the incidence and the potency of the measures taken by Foxconn after the incidence to alleviate those problems.

Management problems:

Military leadership style

Many reports suggested that Foxconn's leadership style is the culprit for continuous suicides. They argued that manufacturing employees also desire a warm and supportive working environment which was the opposite of Foxconn practices.

"Nearly every worker must stand to work 12 hours every day intensively so as to maintain their live with the reduced wages. Because they do not have other qualifications, they haven't any choice but have to choose this type of harsh jobs" said a first-line manager in Foxconn. After a series of suicides happen in Foxconn, a reporter slipped in to the company for thirty days. He found that the surroundings inside the factory was more terrible than imagine. For example, no one can leave for a minute for washroom unless he will get you to definitely replace his duty. It demonstrates even people's basic needs are ignored.

In addition, Foxconn stresses heavily on execution and efficiency although it never provides compensation late. Some staff point out that whenever your boss gives out command, the sole respond you can give is "Yes" or "OK". You cannot be suspicious for another. The only thing you can certainly do is follow his order and delegate the task to your subordinates. Quite simply, manufacturing staff get extremely low status on the market. With low status, workers' duty is to pay attention and follow their instructions, personnel must have no say to what they can do.

We are pretty sure that this kind of military management is unethical as they simply ignore the basic human needs. If we apply the motivation theory-Maslow's Hierarchy of Needs to Foxconn, they cannot even match the most elementary physiological needs like sufficient rest time for the prolonged working hours. Which range from work conditions to worker status, Foxconn does not fulfill those hygiene factors( dissatisfiers) according to Fredrick Herzberg' s Two-Factor Theory. Both of the theories above show us evidently that worker are certain to get dissatisfied with this military leadership style. The strict and inconsiderate leadership style explains why Foxconn was blamed to be inhuman leading to endless suicides.

Rewarding policies

From the view of motivating and rewarding employees, some believe that a string of suicides at Foxconn has highlighted what some say that the minimal pay of 900 RMB is exploitative. We will examine the issue and analyze rewarding policies of Foxconn.

With respect to the monetary rewards, it is laudable that Foxconn has signed labor contract using their workers and pay their basic salaries promptly. However, they set the minimum wage in Shenzhen, 900RMB, as the essential salary of personnel in the factory before tragedy happened. In fact, the so-called basic salary is not enough to guarantee employees even the essential standard of living. They are really long overdue for significant pay raises and the factory pay hasn't kept pace with inflation over the past decade that makes their lives hard. We may discover that the monetary reward offered by Foxconn is insufficient to fulfill even the physiological needs of workers. It's very likely that personnel will get more depressed when their job is overwhelming stressful at low pay level. Suicide attempts are usually preceded by a period of serious depression. It is simple to comprehend that the low pay can induce suicide with tremendous pressure faced by factory personnel every day.

After several suicides, Foxconn has already reached an initial agreement on pension and maintenance payments with the bereaved families that Foxconn would make a 360, 000 RMB pension payment to people families and offered maintenance payments of 30, 000 RMB per year. This practice intensifies the suicidal problem. The original intention of this measure is to pacify the bereaved families, comfort employees after a series of suicide events and at the same time, relief the pressure from public. However, for those staff who are dissatisfied with their lives at Foxconn, large amount of compensation induces them to get rid of their life as they find it more preferable. The pension payment, being at fault of suicides, is reaching the opposite.

The dearth of non-monetary rewards also ends in a string of suicides at Foxconn. Beneath the military leadership style, being blamed is one of the work duties. Non-monetary rewards like praise, status promotions or privileges are simply impossible. For general companies, not having any non-monetary or intrinsic rewards is not the critical problem. It really is some other story for Foxconn plus they become vitally important when monetary and extrinsic rewards are far from sufficient to fulfill workers. It acts as the supplements or compensation to workers with low pay. Unfortunately, Foxconn just does the contrary. There is neither significant extrinsic reward nor any form of intrinsic rewards. Worse still, they have a tendency to punish rather than encourage employees when they get mistakes. All of the above rewarding policies fuel the suicide problem.

Communication opportunity

Communication with peers is important expressing their pros and cons and relieve their stress. Developing the social network on the market would also improve the job satisfaction and sense of belongings to the company.

However, there is a lack of communication in Foxconn. If they are working, personnel cannot talk to each other, or else there will be disciplinary action. After work, they seldom talks with their roommates, since they either have to work overtime or need to take a rest after long working hours.

After the first few suicides, Foxconn carries out a number of measures. For example, managers 'buy' information with monetary incentive. Whenever staff report employees with psychological problem, 2 hundred dollar is rewarded. This practice further worsens the partnership between peers, supervisors and subordinates as it weakens the trust between workers, which makes it more difficult to allow them to share freely using their peers. When employees aren't content with the working environment and have nobody to speak to, their stress level will accumulate. And one day they can no longer withstand the strain and end their lives to eliminate the task.

Fairness

Have you ever truly imagined that the unfair treatments in the work place would induce people to commit suicide? People in this generation pay more focus on the fairness. However, unfair affairs exist in Foxconn. A couple of rumors that security guards maintain order according to their personal mood, as opposed to the regulations of the company. Whenever one of the guards does not be friends with you, you'll be beaten for whatever reasons. One example will be Mr Leung. Some said that he spit to the guard after being dressed down and jumped from the roof the other day. Another example would be the management by Mr Kwok, the chairperson of Foxconn. He was born and educated in Taiwan. That's the reason he is criticized of preferential treating towards Taiwanese. He often employs Taiwanese to manage Chinese and rewards are different between employees from different origins. Taiwanese have a higher salaries and bonus than Chinese at the same level.

It is true that people cannot check whether the above claims are correct or not. However, discrimination is not uncommon in the real society even as can think and thus it could be the fault of Foxconn never to balance the interests of different parties which directly causes continuous suicides. Using the staff being treated differently and nowhere to complain, they can only just endure to it. With regards to the end of one's patience, a few of them choose to get rid of their lives.

Measures taken by the Foxconn Group:

After the consecutive tragedies, the Foxconn Group had adopted various measures to avoid employees from committing suicide again.

These measures included:

1. ) Increase in workers' wages.

The management raised the wages of most production line workers by 30%. And then for the production line operators in Shenzhen, their basic salaries and wages were raised from 1, 200 yuan to 2, 000 yuan monthly.

2. ) Setup of "BACK-UP"

The company set up a rigid "Safety Net" within the staff residential areas, which occupied for over 150 million square meters of spaces, thus to enough time death of any worker directly if indeed they designed to jump off the roof downwards.

3. ) Establishment of the "Caring Team"

Foxconn had divided their staff into sets of 50 people, known as the "Caring Team", and their responsibilities included giving cares and love to each other, and report any unusual emotional changes with their co-workers.

4. ) Counselors' availability to assist the workers

At the time following the incident, the company had already trained 1000 psychological counselors. They were delivered to the factory to provide counseling, guidance and assist with the workers via the psychological consultation hotline.

5. ) Mandatory Psychological test

Once new employees were employed after the incident, they must undergo an in-depth mandatory psychological test to evaluate their mental health insurance and provided better guidance how they could work happily in the foreseeable future.

To conclude, these measures targeted at protecting against the same incident from happening again.

Criticisms on the measures taken by the company

Despite the several measures adopted by the business, did they really benefit the personnel permanently? Or did they only bring temporary effects? It was surprising to discover that there were still cases of employees committing suicide soon after all the above measures were implemented, which gave us the solid evidence that the measures might not be as effective as the managers expected and could not root out the problem.

1. Short-sighted measures without long-term consideration

The above measures could be reported to be effective in dealing with short-term problems, yet it might not be long-term considered enough. For example, the create of "BACK-UP" could only enforce employees never to jump downwards using their roof, but it might not solve the workers' dissatisfaction towards the company and enhance workers' morale in long-term. Some even argue that the establishment of back-up shows the cool-blooded attitude of Foxconn towards workers.

2. Not sufficient psychological support

Although the business sets up a psychological consultation hotline, helping employees to alleviate their stress, this measure is quite passive and the amount of employees being helped is limited. Top managers only select 1000 employees to have a training course of psychological consultation. Eighty of these pass the exam helping employees who cannot deal with stress. But, these eighty helpers, in accordance with over four hundred thousand of employees, are insufficient to prevent suicide from happening again. We doubt whether it's the effective solution to prevent suicide and help employees.

3. Insufficient improvement in satisfying different needs

According to Maslow's hierarchy of needs, it states evidently that different needs ranging from physiological must self-actualization and esteem needs, such intrinsic values will be the most crucial ingredient in the recipe of motivating workers. However, what Foxconn offered were far from fully satisfying workers' fundamental needs (ie, financial security), not forgetting what measures did Foxconn implement to meet workers' social needs. Although they set up the caring team to show their "love" to workers, whether it works is at doubt. Can the need of social network be simply replaced by the so-called caring team? The act of suicides proves its effectiveness. Being ignored the intrinsic needs, employees hardly find the sensation of satisfactory and recognition from the task.

Our Suggestions

To coop with the incident, we must think of some more probable ways, that are listed in the next:

1. An increase in wages and a reduction on working hours

Most of the employees in Foxconn endured their tiredness by standing for over 10 hours each day, with 6 days per week without sufficient rest. The reason why that staff choose to work overtime was that the wages were still definately not enough for these people, even after the little raise in the wages. By increasing the wages, workers no more need to suffer from the extremely long working hours. If you want to save workers' lives, we ought to first ensure that they get sufficient salary to keep up their lives.

2. Satisfying different needs

Under the Maslow's Hierarchy of Needs, social need like affection, belongingness and friendship is one of the fundamental needs for personnel to get work. Aside from encouraging workers to make friends with others to be able to alleviate the psychological problems, they also needs to encourage them to relax by having some leisure activities. Though Foxconn has good relaxing facilities like recreation centre for chess, rock climbing and fishing, they never promote and encourage staff to enjoy them. From the Shanghai-based China Business News reported, Researchers questioned 1, 736 employees and found they worked typically 83. 2 hours of overtime a month that is more than twice the maximum of 36 hours allowed under Chinese law. Workers work numerous overtime and thus they do not have time to take pleasure from those facilities. If Foxconn can truly allow workers to take pleasure from these facilities, staff would gain a better sense of belonging and the morale would thus be increased greatly as different needs are satisfied.

Google which gives its workers a thorough working environment and encourages them to take pleasure from it is an effective example. For instance, swimming pool, 24-hour canteen and gymnastics facilities are all absolve to use for each and every employee. Although Foxconn may not be necessary to imitate Google in such ways, it should consider deeply how it can provide better environment to workers.

3. Methods to let workers assure of a far more certain future

The suicide cases increase workers' fears towards their future. They feel devastated and uncomfortable from what the general public said and even lose confidence on Foxconn. These emotional effects can be disastrous if Foxconn cannot handle it well. We believe that more resources should be spent to stabilize workers' emotion. Foxconn should first describe evidently why several workers committed suicide and hence encourage the remaining to cherish their lives. Secondly, several means should be provided to help personnel establish their career paths with promising future to be able to reduce their uncertainty about the near future. If so, it is believed that the working pressure as well as the turnover rate of current employees would be decreased significantly. Eventually, the occurrence of suicides of personnel could be diminished.

Conclusion

Deficiencies in general management inevitably account for the series of suicides. The incidence, perhaps, is an alarm to Foxconn for the urge of the change in its management style. Is military leadership still viable and suitable? Or another style, a more caring one should be adopted to encourage workers? Rather than thinking how employees can benefit the company, it is more appropriate for Foxconn to think about how precisely they may benefit the employees and get high productivity in exchange. The essence of the condition is easy: even human needs aren't satisfied in Foxconn. But up to now, measures taken to tackle the trouble, mostly short-term, are definately not satisfactory, or even worsen it. Apparently, these measures don't get to the main of the condition. To alleviate the dissatisfaction of workers, long term solutions to regain employees' confidence towards Foxconn will be the only way out.

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