Introduction
Foxconn Technology Group is a Taiwanese company that manufactures and assembles many products of Apple, including iPad and iPhone in China (Hays, n.pag.). The number of people employed by the company is over 0.1 million. However, the company has been in news recently for being alleged of unethical human resource practices and inappropriate treatment of employees. The objective of this paper is to understand the pros and cons of Foxconn issue through article review.
The paper is divided into four sections. The first section deals with analysis and evaluation of arguments in favour of the issue through an identified article. The second section deals with analysis and evaluation of arguments against the issue through another identified article. The third section of the paper is an analytical letter written to the principal on the issue and includes conclusion of the analysis.
Arguments in favour of Foxconn
Identified Article- Eichengreen: China Needs a Service Sector Revolution by Mark Thoma
(Website: http://economistsview.typepad.com/economistsview/2010/06/eichengreen-china-needs-a-servicesector-revolution.html)
The article is about the consequence of being an export driven nation. China has been largely driven by exports. It has been a preferred destination of setting of manufacturing units of multinational companies owing to its cost advantages. With presence of companies like Foxconn and Honda, the wage rates increased significantly due to the increase in demand for wage labourers. In 2012, Foxconn announced wage increases of as much as 70% (Thoma, n.pag.). This argument is also supported by another article by Alabaster and Kan (n.pag.) that states that Foxconn has changed the look of Zhengzhou permanently and developed it into an entire city out of a rural farm land by generating lucrative employment. The article highlights that the wages given to workers in Foxconn factories was higher than the pay offered by any other factory then. Another article by Powell (n.pag.) states that in spite of the issues raised against it, Foxconn is still getting much more job applications than it can actually recruit. Powell (n.pag.) also supports the argument by emphasising that the local government officials are still wooing Foxconn to expand its business in China.
While Alabaster and Kan state that Foxconn has changed the look of a village, Thoma claims that Foxconn has actually changed the economy. It has helped the wage labourers by giving them employment and a higher minimum wage rate. Powell states that government also regards the company by promoting its recruitment advertisements and supporting it on building new factories. Overall, the article by Thoma supports the existence of Foxconn. The arguments in the article are well supported by the other two articles by Powell and Alabaster and Kan.
The article has discussed the positive impact of having Foxconn in China, but it has also raises an issue about the possibility of China losing cost competitiveness due to the minimum wages increases in China. The author concludes that this issue can be resolved by making the nation more service oriented, rather than export oriented for manufactured goods. The words of the author on adverse impacts of increase in minimum wage rate looks ambiguous as the article does not take into account the market maturity that this phenomenon will bring in Chinese markets. My personal value is that offering financial independence and raising the minimum standard of living of a hundred thousand people is a good cause that cannot be ignored and belittled. The evidences provided in the articles are good enough to conclude the benefits of having Foxconn in China. However, fallacies do exist when the impact of increasing minimum wage is being considered as an economic problem.
Arguments against Foxconn
Identified Article: The Tragedy of the Foxconn Sweatshop by China Labor Watch
(Website: http://chinalaborwatch.org/pro/proshow-98.html)
The article argues that Foxconn indifference to the basic needs of employees cannot be ignored. The article highlights that though the company has generated significant employment in the country, its severe human resources issues cannot be ignored. The reasons provided by the article are intense performance pressure on employees, requirement to work massive overtimes, demanding job profiles, strict timelines and insufficient wages. In an investigation of Foxconn conducted by China Labor Watch, it was learned about the intense pressure under which Foxconn production line workers are forced to operate (China Labor Watch, n.pag.). The job profiles are demanding as employees are required to perform a separate task every seven seconds (China Labor Watch, n.pag.). Each of these tasks requires attention to detailing. Moreover Foxconn is focussed at quick churning, which adds on to the employee’s pressure. All this is coupled with low wages.
The arguments are supported by another two articles by Chibber and Greene. Chibber (n.pag.) refers to Foxconn as a hidden dragon. By ‘hidden’, Chibber means that Foxconn is one of those companies that manufacture goods on a large scale employing huge staff but managing to stay away from limelight. By ‘dragon’, the author means a company that treats is employees badly by making their lives difficult. The author supports his argument citing inhuman quote of the company’s senior management and the increasing number of protests and suicides by employees. Chibber (n.pag.) also quotes that US Fair Labor Association audit found "significant issues" among working practices in Foxconn. Greene highlights the issues with the company’s working conditions. Greene (n.pag.) refers to a report by Sacom that during peak seasons, employees are tied to the production lines with just one day off in 13 working days, or no rest day at all in a month. According to the report, the employees were encouraged to do overtime, way beyond the permitted standards. The report also highlighted other hygiene related issues with work, like need for a permit to visit toilet, complacency in establishing processes to protect employees against chemicals used during manufacturing and wages not enough to meet living expenses.
Both Chibber and Greene support arguments and issue raised by China Labor Watch on employees issues of Foxconn. My personal value is that the focus on company profits should never supersede basic survival of its employees. Thus, there appears to be fallacies in the some of the reasons that attempt to justify the company’s act by giving it the credit of being the biggest employment generator in the country. The other arguments are strong and convincing. The supporting arguments are also backed by first-hand surveys conducted on Foxconn employees.
Thus, it can be concluded that Foxconn has been indulged in employee unfriendly practices that need immediate correction and the riots and protests against the company appear to be justified.
Letter to the Principal
The Principal,
Sub: Foxconn Issue in China
Dear Sir,
The issue of human resource practices of Foxconn in China has become a highly debated topic and a spotlight today. Given the relevance of the issue, this letter aims to discuss the pros and cons of the issue, and my opinion of the same. The analysis is primarily based on article review of two main pro and con articles, along with supporting articles.
Intoduction
Foxconn Technology Group is a Taiwanese company that manufactures and assembles many products of Apple, including iPad and iPhone in China (Hays, n.pag.). The company employs more than 0.1 million people. Given its scale of operation and involvement of large manpower, the issue becomes important and thorough understanding. Hence, the pros and cons of the company’s practices has been studied and analysed that form the subsequent parts of the paper.
Arguments Supporting Foxconn
The main article that supports the Foxconn argument drives focus on the export driven nature of China. It says that China has been a preferred destination of setting of manufacturing units of multinational companies owing to its cost advantages. Getting cheap labour is an important ingredient of the cost advantage. It further states that companies like Foxconn and Honda have influenced the labour market by significantly increasing the wage rates in the area. In 2012, Foxconn announced wage increases of as much as 70% (Thoma, n.pag.).
Alabaster and Kan (n.pag.) supports the argument made by Thoma and states that Foxconn has changed the look of Zhengzhou permanently and developed it into an entire city out of a rural farm land by generating lucrative employment. The supporting article reconfirms that wage rates offered by Foxconn has been high when compared to other companies in the regions.
Powell (n.pag.) supports Thoma argument as well. The reasoning given is that though protests and riots are taking place, the number of applicants applying for job with the company is substantial and more than the company’s requirement. Powell (n.pag.) also supports the argument by emphasising that the local government officials are still wooing Foxconn to expand its business in China.
Both Powell and Alabaster and Kan support the arguments placed by Thoma in diffent ways. Thoma claims that Foxconn has actually changed the economy by helping the wage labourers get employment at a higher wage rate. Alabaster and Kan support the argument by talking about the changed and developed look of the village where Foxconn’s factory is present. Powell’s primary argument is that if Foxconn is being supported by people and government, then it cannot be as wrong as it is being portrayed. People are supporting it by putting in large number of job application. Government is supporting the company by promoting its recruitment advertisements and supporting it on building new factories.
The primary article has discussed the positive impact of having Foxconn in China, but it has also raises an issue about the possibility of China losing cost competitiveness due to the minimum wages increases in China. The author concludes that this issue can be resolved by making the nation more service oriented, rather than export oriented for manufactured goods. The words of the author on adverse impacts of increase in minimum wage rate looks ambiguous as the article does not take into account the market maturity that this phenomenon will bring in Chinese markets. The article is well supported by the secondary articles selected for this purpose.
Overall, the articles supporting the company maintain that Foxconn is a large employment provider in China. The company significantly influences, rather improves, the minimum wage rate of the workers in the country. Owing to these factors, it boosts demand in the nation, leads to GDP growth and brings about market maturity. The supporting arguments also state that the company gives a city feel to otherwise rural farmlands.
My personal value is that offering financial independence and raising the minimum standard of living of a hundred thousand people is a good cause that cannot be ignored and belittled. The evidences provided in the articles are good enough to conclude the benefits of having Foxconn in China. However, fallacies do exist when the impact of increasing minimum wage is being considered as an economic problem.
Arguments against Foxconn
The primary article by China Labor Watch argues that Foxconn’s indifference to the basic needs of employees cannot be ignored. The article highlights that though the company has generated significant employment in the country and boosted its economy, its severe human resources issues cannot be ignored. The reasons provided by the article are intense performance pressure on employees, requirement to work massive overtimes, demanding job profiles, strict timelines and insufficient wages.
In an investigation of Foxconn conducted by China Labor Watch, it was learned about the intense pressure under which Foxconn production line workers are forced to operate (China Labor Watch, n.pag.). The job profiles are demanding as employees are required to perform a separate task every seven seconds (China Labor Watch, n.pag.). Each of these tasks requires attention to detailing. Moreover Foxconn is focussed at quick churning, which adds on to the employee’s pressure. The article also highlights that the increase in wage rate is notional, as it cannot even support the labourers for basic living.
The arguments are supported by another two articles by Chibber and Greene. Chibber (n.pag.) refers to Foxconn as a hidden dragon. By ‘hidden’, Chibber means that Foxconn is one of those companies that manufacture goods on a large scale employing huge staff but managing to stay away from limelight. By ‘dragon’, the author means a company that treats is employees badly by making their lives difficult. The author supports his argument citing inhuman quote of the company’s senior management and the increasing number of protests and suicides by employees. Chibber (n.pag.) also quotes that US Fair Labor Association audit found "significant issues" among working practices in Foxconn. Greene highlights the issues with the company’s working conditions. Greene (n.pag.) refers to a report by Sacom that during peak seasons, employees are tied to the production lines with just one day off in 13 working days, or no rest day at all in a month. According to the report, the employees were encouraged to do overtime, way beyond the permitted standards. The report also highlighted other hygiene related issues with work, like need for a permit to visit toilet, complacency in establishing processes to protect employees against chemicals used during manufacturing and wages not enough to meet living expenses.
Overall, the articles against the company maintain that Foxconn has some serious employee unfriendly processes, which cannot be ignored. These processes lead to intense performance pressure on employees, requirement to work massive overtimes, demanding job profiles, strict timelines and insufficient wages. Even basic hygiene factors for employees are compromised with and ignored. These unfriendly processes are being manifested in the form of riots, protests and suicides being done by a major chunk of the company’s employees.
My personal value on this topic is that the focus on company profits should never supersede basic survival of its employees. Thus, there appears to be fallacies in the some of the reasons that attempt to justify the company’s act by giving it the credit of being the biggest employment generator in the country. Other than this, the arguments are mostly convincing. The supporting arguments are also backed by first-hand surveys conducted on Foxconn employees.
Discussion
Based on the analysis of articles, I personally feel that human resource should not be treated like any other factor of production. Employees are human and different from other factors of production like capital and land. Hence, they need to be treated differently. In spite of the employment, each human being has a right to basic hygiene needs that cannot be compromised with. Employees, unlike machine, have emotions attached to them and cannot be handled like robots. Apart from hygiene factors, the mental state of employees is also important.
Employees cannot be pushed into overtime, extreme work pressure and quick switch profiles with stringent timelines. It is very difficult to concentrate and deliver results when mind is occupied with anxiety, fear and tiredness. Human beings have a limit to their productive capacity and need a break. It is inhuman to ask employees to work without even a day’s break for weeks together.
Economy is composed of people. If a large portion of its people is unhappy, no nation can prosper. This information is omitted from the article that supports Foxconn’s presence in China. Some of the statistics of the pro-article are also deceptive. The article claims that Foxconn led to rise in wages for workers of more than fifty per cent. But, raising the minimum wage against other companies is not sufficient. It is important to raise the wages high enough for workers to sustain.
Conclusion
I would like to conclude that it is important for companies like Foxconn to take their employees seriously. It is imperative to fulfil their financial, hygiene and psychological needs to keep them happy. All these are basic human needs that should not be compromised with. If these issues are ignored, they become big and explode in the form of employee protests and suicides. Even at a smaller level, it does affect employee productivity. Thus, it is a loss to the company, its employees and the entire nation. It is important that government takes adequate steps to reduce such instances by conducting regular audits on employee practices in companies that employee people in large scale. Such hidden dragons need to be exposed and asked to amend their human resource practices.
Works Cited
Chibber, Kabir. “Foxconn: Hidden Dragon out in the Open”. Bbc.co.uk, 24 Sept. 2012. Web. 29 Oct. 2012.
China Labor Watch. “The Tragedy of the Foxconn Sweatshop”. Chinalaborwatch.Org, 2012. Web. 29 Oct. 2012.
Greene, Jay. “Riots, Suicides, and other issues in Foxconn’s iPhone Factories. Cnet.com, 25 Sept. 2005. Web. 29 Oct. 2012.
Hays, Jeffery. “Apple in China: Success, Criticism and Competition”. Factsanddetails.Com, Apr. 2008. Web. 29 Oct. 2012.
Powell, Bill. “How to Think About Foxconn”. Tech.fortune.cnn.Com, 11 Oct. 2012. Web. 29 Oct. 2012.
Thoma, Mark. “Eichengreen: China Needs a Service Sector Revolution”. Economistsview.typepad.com, 2010. Web. 29 Oct. 2012.
