ABSTRACT
The report is about the problems faced by the labor of Wen Wai factory in Shenzen, Guangdong, China. Wen Wai factory is an outsourced partner of renowned toy makers AmeriTrade Toys of US.. Three problems as identified in San Francisco Daily News and article in December, 2003 the research explored issues including the duty time obligation, low wage rate issue and unhealthy food served in the factor. After analyzing the problem the recommendations are made in the final section of the report to solve the issues faced by the labor of the factory. The focus of the recommendations is to ensure that labor laws by the local authorities are implemented in the factory..
INTRODUCTION
The Ameri Trade Corporation is renowned toys manufacturing company of US (America Trading Company, 2013). The company outsourced its manufacturing of Tundra Truck in 2001 to Wen Wai Industries in Shenzen, Guangdong, China. This outsourcing was done with the purpose of minimizing cost of production and to meet the challenges of 2001 recession. But after two years of outsourcing its operation, the report of San Francisco Daily News revealed labor exploitation by the outsourcing partner of Ameri Trade Corporation. The condition directly impacts on the brand equity of Ameri Trade because of not giving the proper rights to the workers. This report, on request of senior management of Ameri Trade Corporation attempts to discuss and analyze the problems faced by the workers in the factory. The recommendations will be given to improve the workers condition in factory and ensuring implementation of set labor standards and accurate reporting.
PROBLEM ANALYSIS
In the light of this case study there are three major problems have been identified. The concern of all the problems is regarding the rights of employees that are not given according to the rules and policies for worker rights in China. The problems are stated below.
- THE DUTY TIME OBLIGATIONS
Workers were obligated to work from 7:30am to 10:00pm constituting 84 hours per week versus the 40-hour work week set by local authorities. According to the labor law in the city the working hours for the week is 40. Unhealthy and excessive working conditions were also destroying their health and fitness.
- LOW WAGE RATE ISSUE
In Shenzen, Guangdong, China the minimum wage rate per hour for the factory workers is $.33. The workers of the factory earned only $.24 per hour versus the minimum wage of $.33 per hour. The company was breaking regulations of the labor law which was designed by the government. . Pay is an important factor that motivates the employees and low wage rate influences the motivation of employees (Bratton, & Gold, 2009). This factor being highlighted in the news report was big shock to the Ameri Trade Corporation that claimed to continue the community welfare tradition set by founding owners.
- UNHEALTHY FOOD DESTROYING THE HEALTH OF WORKERS:
The workers living in dormitory barracks and the factory-provided food given to workers was declared unhealthy by an external auditor or food inspector. The unhealthy food was destroying the health of the employees and the dormitory barracks were not giving them proper privacy. Also no medical allowances were given to the workers in case of any medical issue.
- MANIPULATED AUDITORS REPORT
Managing the human resource or the labor is one of the most challenging jobs for the management. Organizations that are able to manage the human resource better, are more likely to be successful (Carpenter, Bauer, & Erdogan, 2009). The biggest concern rose from the fact that Wen Wai Shenzen factory provided labor statistics and auditors reports that claimed complying all regulations. This caused breach of labor laws and contract conditions.
RECOMMENDATIONS
- The duty time for all the workers of the factory should be according to the labor law of china or the time set by the local authorities. In condition of extra working hours every labor should be paid for each single hour according to the over time wage rate set by the local authorities. Senior management considering matter should condition cancellation of contract in case of non- compliance. The automatic attendance registration system should be implemented in the factory where labor would be registered along with their time in and time out by placing a thumb on the thumb recognition machine. The data of machine will be conducted by the senior management to check the accurate working hours of labor.
- It is the responsibility of management to obey the laws of the government regarding any activity. The low wage rate was discouraging workers of the factory and that could affect the resulting product of the company. The management should make sure provision of at least the minimum wage rate set by the local authorities which is $.33 per hour .The senior management needs to keep an eye on the labor wage rate being offered by the factory and whether this is according to the hours registered in the attendance machine or not. The senior management should conduct a statement of labor cost from the factory to find out that the factory is paying the labor according to the labor laws of local authorities or not.
- The separate quarters must be provided to every three to four workers group to maintain the privacy at some extent and for better comfortable environment. The management of the factory should also carefully deal with issue of unhealthy food. It is important in protecting the company’s image in the market. The medical facility should be given to the labor force for giving them a cover of satisfaction. The senior management should hire a food inspector in that city to survey a factory once in a month to check the quality of food and give the report to the senior management every month.
- Management should reconsider contract and adding clause that the company will conduct quarterly visit to the factory. Further, the audit report to be develops by auditor of AmeriTrade Toys of US.
CONCLUSION
The problems faced by the factory workers were creating some serious concerns regarding the lives of the workers. It was also creating a negative impact on the company’s brand image because it was published in the news article. The senior management needs to take immediate actions to solve the labor issues of duty time obligations, low wage rate structure and unhealthy food etc. The recommendations are made in the report to help the company’s senior management to take the appropriate measures in solving these serious concerns at earliest before visiting factory.
References
Bratton, J. & Gold, J. (2009). Human Resource Management: Theory and Practice, 4th edition. Basingstoke: Palgrave Macmillan.
Carpenter, M., Bauer, T., & Erdogan, B. (2009). Principles of management. New York: Flat World Knowledge.
