Q Case 4.1: The Human Cost Associated with Our Electronic Gadgets The June 14 headline read: “New Foxconn Worker Commits Suicide, First in 2012.” While the proclamation of a worker suicide is tragic in its own right, the “First in 2012” may be even more troubling. The headline implies that suicides at Taiwan-based Foxconn Technology Group are, or at least were, typical and expected. It was a rash of suicides that brought Foxconn into the public light. It was reported that between 2008 and 2010, 19 Foxconn employees “attempted suicide or fell from buildings in manners that suggested suicide attempts.” The electronics supplier has been accused of forcing its employees to work long hours under challenging working conditions for low pay. Though wages have been raised on more than one occasion and working hours curtailed, problems at Foxconn have continued. In January 2012, approximately 150 Foxconn employees occupied the roof of their factory and threatened mass suicide over working conditions and wages. Local police and fire representatives talked down these employees after two days. All but 45 of the protestors returned to work. In June 2012, Foxconn was again in the news for an employee uprising. Employees rioted following an argument with a local restaurateur. Several new employees involved in a restaurant altercation raced back to their worker dorms shouting “they are beating us,” inciting 100 of their coworkers to rush to their defense and throw bottles at the police and company security. Four employees were arrested as a result of the incident. Foxconn’s responses to its unwanted notoriety have also brought it adverse press coverage. Pictures of the suicide nets the company installed around many of its buildings to dissuade (or save) potential jumpers are taken as evidence of a continuing problem. The company’s requirement that employees sign an anti-suicide pledge was the subject of late-night TV jokes in the United States. Foxconn’s cancelation of death benefits for suicides, in response to an employee suicide note stating that he jumped to help his family financially, was largely viewed as cruel. While Foxconn has been in the news, few in the United States know about this global supplier of electronics. Founded in 1974 by billionaire Terry Gou, Foxconn is a low-cost manufacturer of computer, communication, and consumer electronics products. Foxconn controls its costs by providing low pay (from a United States perspective) to large numbers of low-skilled workers. Foxconn is the largest single private employer in mainland China with a staff of over 1.2 https://prod.reader-ui.prod.mheducation.com/epub/sn_c8a2/data-uuid-4fd8314817a84b7e9580b3fda6a125c8 1/3 Page 100 3/22/23, 3:10 PM Case million working on multiple company “campuses.” The number of employees at the company flagship plant in Longhua roughly equals the population of Kansas City, MO. Though Foxconn may be best known for producing products for Apple, they in fact manufacture merchandise for all of the major United States electronics firms, including Dell, Hewlett-Packard, IBM, and Motorola, and their output accounts for approximately 40 percent (or $60 billion) of the world’s consumer-electronics revenue. While Foxconn builds high-tech items, its processes are notably low tech with much of its production being completed by hand. Foxconn facilities are set in compounds that the company compares to college campuses. These facilities contain not only factory space, but also dormitories, cafeterias, restaurants, malls, medical care providers, entertainment and sports venues. Dormitory rooms typically house seven to eight workers. Like a college, Foxconn charges their employees for their housing and meals. The company’s compounds are enclosed, separated from their surroundings by fences and walls. Once on campus, employees never really need to leave. The life of a Foxconn worker is hard to compare to what one would expect in the United States. Thoughts of a work compound may bring up images of a company mining town, exploiting or at least restricting the freedoms of workers. Foxconn compounds were in fact built to help the plight of the Chinese worker. Company founder Terry Gou saw workers in Shenzhen factories living in shanties or even sleeping under their workstation. Gou was determined to improve conditions for his employees. His compounds were intended to give workers a better place to live than they could afford on their own, ensure they were well fed, and protect them from city crime. Foxconn, by Chinese standards, is a good place to work and its positions are highly coveted. Factory work, in general, is seen as a way to escape the poverty of rural China. Young workers seeking a way into the middle class are leaving their family farms and moving to the cities for these jobs. Foxconn wages are among the best in China, and Foxconn continues to address mandatory overtime and child labor abuses. When one hears of 19 employee suicides since 2008, shock over the poor treatment of employees may be the appropriate emotion, but could further examination of the data show a different side of the story? The suicide rate at Foxconn is less than one-tenth of the national suicide rate in China. In the United States, workplace suicides are labeled as such only if they occur at work or during work time. As Foxconn employees live on campuses, any suicide is naturally related to the company, potentially inflating their numbers. It is also worth https://prod.reader-ui.prod.mheducation.com/epub/sn_c8a2/data-uuid-4fd8314817a84b7e9580b3fda6a125c8 2/3 3/22/23, 3:10 PM Case noting that the suicide headline reported at the beginning of this case involved a new employee. Also, the riot that took place on a Foxconn campus was sparked by new employees. At the Longhua complex alone, typically 5 percent of the workforce or 24,000 employees quit each month, all requiring replacement. Consequently, there is a steady stream of new employees emigrating from rural China to Foxconn’s factory cities. These workers are leaving their families, friends, and lives behind, entering, perhaps friendless, what is presumably a new and unfamiliar setting. Workers have died at Foxconn, but to what degree are these deaths due only to the working conditions and pressures of the job? Are other factors like the isolation, distance from family and friends, cultural factors, or even individual mental illnesses also contributing to this complicated and tragic situation? Questions 1. Think of the initial impressions you formed of Foxconn as you read the case. To what degree did stereotyping influence your thoughts? How much did additional information about the firm change your initial impressions? 2. While the manual labor of assembling electronics is challenging for Foxconn employees, the workers may also face the emotional burden of being away from family and isolation from the outside world. How might management recognize and help employees constructively cope with these challenges and emotions? 3. How has Foxconn engaged in impression management? Have their efforts been successful? Sources: Written by Dr. Michael Dutch, Greensboro College, Greensboro, North Carolina (2012). Adapted from company website, http://www.foxconn.com; Victor Luckerson, “Another Worker Has Died at an iPhone Plant in China,” Time, http://time.com, accessed March 9, 2016; government website, “The World Factbook,” https://www.cia.gov, accessed March 9, 2016; “Foxconn Technology,” The New York Times, http://www.nytimes.com, accessed March 9, 2016; “New Foxconn Worker Commits Suicide, First in 2012,” Electronista, June 14, 2012, http://www.electronista.com; Peter Cohan, “23 Died Building Your iWorld: Time to Boycott Apple?” Forbes, January 26, 2012, http://www.forbes.com; Charles Duhigg and David Barboza, “In China, Human Costs Are Built into an iPad,” The New York Times, January 25, 2012, http://www.nytimes.com; Malcolm Moore, “‘Mass Suicide’ Protest at Apple Manufacturer Foxconn Factory,” Telegraph, January 11, 2012, http://www.telegraph.co.uk; Angela Moscaritolo, “Foxconn Employees Threaten Mass Suicides,” PC Magazine, January 10, 2012, http://www.pcmag.com; Joel Johnson, “1 Million Workers; 90 Million iPhones; 17 Suicides; Who’s to Blame?” Wired Magazine, February 11, 2011, http://www.wired.com. https://prod.reader-ui.prod.mheducation.com/epub/sn_c8a2/data-uuid-4fd8314817a84b7e9580b3fda6a125c8 3/3