The Foxconn Suicides

A Case of Organizational Behaviors Project

Lectured by : Mr. Irfan Habsjah

Prepared by :

HESTY OKTARIZA
014200900073
MGT 2009 Class 3

President University

2010

About
Foxconn Technology Group is a Taiwanese multinational company with its main plant operating in Shenzhen, China. Foxconn is hands down the largest manufacturer of electronics, computers and computer components in the world. They produce items such as the Mac mini, iPod, iPad, iPhone, Dell Computers, HP motherboards, Wii, Xbox 360,, Playstation 3, Amazon kindle, and Cisco Equipment which are just the few name of their clients. This behemoth company employs a small army of employees, over 300,000 in its Shenzhen campus factory alone. The Group's principal activities are manufacturing, processing and selling computer, communications and consumer electronic (3C) products. Products include computer terminal, computer, electronic calculator and peripheral equipment, as well as thermal modules and consumer electronic products. Operations are carried out in Taiwan and other countries. The Group exports its products to Asia, the United States of America, Europe and other countries. Foxconn Business Philosophy Since 1974, Foxconn had always been guided by three Foxconnian visions; Through the most efficient "Total Cost Advantages" to make comfort of electronic products usage an attainable reality for all mankind; Through the proprietary one-stop shopping vertical integrated eCMMS model to revolutionize the conventional inefficient electronics outsourcing model;
Case Analysis of The Foxconn Suicides

Through the devotion to greater social harmony and higher ethical standards to achieve a win-win model for all stakeholders including shareholders, employees, community and management.

Issue on Organizational Behavior :

Why have suicides spiked at Apple iPad supplier Foxconn in China?

A ninth employee killed himself Tuesday at the Chinese electronics supplier Foxconn, which makes the Apple iPad and Sony Ericsson phones, turning attention to working conditions at the firm's huge complex. By Peter Ford, Staff Writer / May 25, 2010 , Beijing A spate of suicides among Chinese workers making the Apple iPad, Sony Ericsson phones, and other electronic items has drawn fresh attention to working conditions in the factories supplying consumers worldwide with must-have gadgets.. At 6.20 on Tuesday morning, 19-year-old migrant worker Li Hai threw himself to his death from the roof of a building at electronics manufacturer Foxconn in the southern boom town of Shenzhen. He was the ninth company employee to kill himself this year. Two other would-be suicides have survived their injuries. Foxconns massive complex, employing more than 400,000 people, has a reputation for strict discipline, says Geoffrey Crothall, spokesman for the Hong Kong based China Labour Bulletin, which monitors working conditions in China. Its a tough place to be and you have to be tough to survive.Terry Gou, founder of Foxconns Taiwanese parent company Hon Hai Precision Industry, insisted Monday that his firm does not run a blood and sweat factory.
Case Analysis of The Foxconn Suicides

Pays social security, offers cheap housing

By Chinese standards, Foxconn is not a bad employer. The company pays social security contributions for its employees, offers cheap housing and food, and pays overtime at the legal rate. It has no difficulty attracting young migrant workers from the countryside. Company officials, professing bafflement at the recent suicides, recently took reporters on a tour of the newly built dormitories and swimming pools that Foxconn offers its workers. But a report in the respected Southern Weekly newspaper in Guangzhou, China, earlier this month, written by an intern who spent a month working undercover at Foxconn, painted a grim picture of alienation. Workers are required to stand at fast-moving assembly lines for eight hours without a break and without talking, the journalist reported. Workers, sharing sleeping accommodations

with nine other workmates, often do not know each others names. They do not have much time to get to know each other. The basic starting pay of 900 RMB ($130) a month barely enough to live on can be augmented to a more respectable 2,000 RMB ($295) only by working 30 hours overtime a week. Todays migrant workers have higher expectations than their parents, but reality has not changed, says Liu Kaiming, a workers rights advocate with the Institute for Contemporary Observation in Shenzhen. They cannot bridge the gap between their dreams and reality. The string of suicides this year at Foxconn is not all that shocking in terms of numbers, since it is not grossly abnormal compared with the national suicide rate, according to Michael Phillips, head of the Beijing Suicide Research and Prevention Center and the leading foreign authority on suicide in China. He puts the national suicide rate at about 15 per 100,000, based on incomplete data. By comparison, the US rate is 11 per 100,000.
Case Analysis of The Foxconn Suicides

Apple connection
The episode has drawn widespread attention in the local press, however, because of Foxconns work for Apple, says Mr. Crothall. The companys Taiwanese origins may also be a factor, he suggests, pointing to the way that the state-run news agency Xinhua and official Communist party organ the Peoples Daily have been out front in the reporting of the suicides. The company has taken a number of steps to try to halt the suicides, ranging from setting up a helpline and offering rewards to employees who point out their colleagues unusual behavior to hiring counselors and bringing in Buddhist priests to exorcise the factory and pacify the spirits of those who died. Dr. Phillips, however, worries that a copy-cat effect has set in, with each suicide prompting another, which will be hard to break. In the longer term, argues Mr. Liu, companies such as Foxconn must be encouraged to make their factories places with social networks, with sentiment, where people feel they can fit in. Crothall believes the solution might be simpler. If you raised basic wages to a decent level workers would not feel the need to do excessive overtime, he suggests. Then they would have more time to socialize, to be with their friend and just generally to have a life, which at the moment they dont have.

Case Analysis :

5W & H of The Foxconn Suicide

WHAT happened? Spate of suicide. From the case above, its been eleven suicide attempts on which only two people survived. This notorious incidents has drawn worlds attention on the work conditions in the factories. WHERE did it happen? Foxconn campus at Shenzen province, China.
Case Analysis of The Foxconn Suicides

WHO were involved? Foxconn Technology Group and its employees are the two main parties which are involved. However, there are also some company such as Sony Corp, Dell, Apple, HP, Nokia and many other big companies because their relation as Foxconns customer. WHEN did it happen? This event involving Foxconn in 2009-2010 where the momentum regarding the suicide pick up dramatically in 2010. Below is the timeline of the events : which is affected with this case

WHY did it happen? Why did those workers commit to suicide? The obviously answer is addressing to management military-style work culture that showed the mistreating of employees

whose age are relatively young, so their psychological has not ready enough for too much pressure and jobs burden. Meanwhile, most of them have little education and have no skills so they have no choice but to do this kind of job. In regard to organizational behaviours point of view, people in highly emotional states will recall negative things, and it seems like Foxconn failed in managing emotion at the organization itself . Instead of took the official steps to alleviate the suffering of its employees, Foxconn ignore the stress that happened among its labor and let it being strain that fatally ended as suicides. To elaborate more about the reasons behind this incident, the following causes of stress can be considered as the possible answer :
Case Analysis of The Foxconn Suicides

Occupational demand. It is a fact that most of Foxconns employees are working on unpleasant phhysical condition. Workers are required to stand at fast-moving assembly lines for eight hours without a break and they don't even talk to the people working next to them, verbal abuse by superiors and self-criticisms they are forced to read aloud, They are working, sharing sleeping accommodations with nine other workmates, often do not know each others names. They don't do anything but working there

Overload task. The belief that one is required to do more work than possibly can be completed in a specific period is indicated the condition in Foxconn. The employees have to work long days and many of the staff were working at least six days a week do 100 hours of overtime per month.. So it was very common to hear of people being burnt out.

Responsibility on others and rule juggling.

There are also cultural and

economic factors to consider. China is in the midst of the largest and most rapid process of urbanization the world has ever seen. The creation of a "mass society" is often accompanied by adjustment difficulties, and the national suicide rate14 per 100,000is high by international standards. China's rural youth often can't rely on the support of parents, since that generation has little conception of the world their child is entering.

Lack of social support. Suicide clusters are a global phenomenon among young people, who are highly suggestible. The atmosphere in its Foxconn dormitories is like a large university, with the young workers living away from home for the first time and encountering the unsual new experiences. Several of the recent suicides seem to have been related to love affairs

gone wrong. What happened in Foxconn showed that employees got no support in terms of solving their emotional lability. The second question is, why the company enforce a harsh working condition? They claimed that the military conducted is aiming to ensure security at Foxconn. But still,perhaps the final answer is to maximize output by optimalized efficiency of its labor and create competitive advantage for their clients. HOW to solve the problem?
Case Analysis of The Foxconn Suicides

Nevertheless, suicide is too complex as an issue to rush to conclusions. While we wait to see what new facts emerge, for the time being Foxconn seems to be taking its responsibility to its workers' health seriously and deserves the benefit of the doubt. However, in my opinion there are two main steps needed to get over of the case above, both for the employees welfare and recovery of the companys reputation itself.
First, kind of short-term actions to prevent more suicide should be taken into

account. If they cant overcome it, then the deaths could strain Foxconn's relation with its high-profile clients as nobody wants to buy a product that's associated with a facility where people take their own lives. These efforts could be done by managing psychologycal side of the employees and compensating with the economical consideration. Based on the stress prevention approaches theory, Foxconn should provide tertiary prevention by treating symptomps caused by stressor and generate social support , for example having counselors, psychiatrists and Buddhist monks to offer psychological, emotional and spiritual support to the workers. Furthermore, in Foxconn if you want to earn more money you must work overtime. Since most of the employees can't afford the cost of living in Shenzhen with their salary. The high housing prices and living costs push them into more work day and night. Secondary prevention to avoid this problems comes from economical consideration, which is by raising the wages to decent levels so they won't feel they need to rely on overtime. That would give the employees time to socialize, relax and work through whatever issues they have.

 The second alternative solution is through long-term primary stress

prevention. By radically changes the military-style work culture and management system of Foxconn will improve not only the performance of the organization but also the notorious brand reputation in advance. This creates an added responsibility for companies in China to be not just an employer but also act in parenting their employees. Finally, as it quoted from the head of the Institute of Contemporary Observation "To work in a big company, (with a campus) as large as a medium-sized city, they need
Case Analysis of The Foxconn Suicides

the feeling of a family to handle the severe working pressure, the company cannot make these young people be just money-making machines.". Thus, Foxconn need to create a new atmosphere of its people management culture. From the solutions above, it is important for Foxconn to pick a quick and real actions to survive from the public blaming spotlight. I personally will prefer both of the solutions for ensuring the tragedy will not happen anymore in the future.

References
Foxconn Main Site (2007), see :

http://www.foxconn.com/CompanyIntro.html The Christian Monitor (May 25th, 2010), Why Have Suicide Spiked at Apple iPad Supplier Foxconn in China, see : http://www.csmonitor.com/World/AsiaPacific/2010/0525/Why-have-suicides-spiked-at-Apple-iPad-supplier-Foxconn-inChina The Wall Street Journal (May 27th, 2010), The Foxconn Suicide, see :
Case Analysis of The Foxconn Suicides

http://online.wsj.com/2010/05/27/The-Foxconn-Suicide.html Digital East Asia (May 28th, 2010), Foxconn Suicide : A Solemn Timeline, see: http://www.digitaleastasia.com/2010/05/28/foxconn-suicides-a-solemn-timeline/