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Foxconn Company Ethics Analysis: a Consumer Electronics Nightmare

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Since its founding in 1976 by Steve Jobs and Steve Wozniak, Apple Inc. has grown to become a multi-billion dollar technology company known globally for their high-quality design and incredible attention to detail. Currently ranked as the fifth-largest Fortune 500 company, the tech giant has recently reported the largest annual profit in history with a net income of $53.4 billion (Titcomb, 2015). Apple has become a household name, known for products such as the Mac, iPod, iPhone, iPad, Apple Watch, Apple TV, and various other software and gadgets. Many users of Apple products, however, are completely unaware of the harsh manufacturing environment in which their devices originated.

As one of the world’s largest manufacturers of electronic devices, the Taiwanese technology group known as Foxconn exports top-selling gadgets such as iPhones and iPads to tech companies around the globe (McLaughlin, 2010). Due to low production costs, Apple is among industry giants like Dell, HP, Nokia, IBM, and Sony that outsources labor to Foxconn factories across China, Europe, India, and Mexico (Brook, 2010). Outsourcing mass amounts of labor raises many ethical and controversial questions about the well-being and treatment of factory workers. Undoubtedly, steps must be made to ensure employee safety—both physical and emotional.

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China’s largest Foxconn factory, referred to as Foxconn City, is located in the city of Shenzhen where hundreds of thousands of Chinese workers are deprived of the fundamental human rights and living essentials on a daily basis. These impoverished and often abusive working conditions have caused many Foxconn employees to attempt suicide, the majority of which by jumping from dorms or work buildings (Cheng, 2011). The first reported death at the Shenzhen facility occurred on June 18, 2007, when an employee was found hanging in one of the company bathrooms. The highest count of attempted suicides occurred in 2010, resulting in the death of 14 employees and media frenzy surrounding Apple and the China- based Foxconn factory.

Thomas Lee, a photographer for Wired.com, says that most employees are migrants from rural communities that seek employment at Foxconn because of the economic opportunities. Lee goes on to stating that the working conditions are “similar to production line work environments in other Chinese factories,” observing that ” Foxconn has safer and cleaner facilities than those he’s familiar with from other factories (Brook, 2010).” Working conditions at Foxconn are reported similar to other factories throughout China; however, Foxconn employees are regularly expected to work overtime without any form of compensation. These employees are not only significantly underpaid, but feel they are prisoners in an environment which creates a continuous exposure to hazardous, harmful materials.

During a press conference held at All Things Digital on June 1, 2010, Apple CEO Steve Jobs addressed the Foxconn suicides and reassured attendees that the facility was under investigation. “Foxconn is not a sweatshop,” Jobs exclaimed according to TG Daily, “You go in this place and it’s a factory but, my gosh, they’ve got restaurants and movie theaters and hospitals and swimming pools. For a factory, it’s pretty nice (Maisto, 2010).” The 1.4 mile-square complex also houses dormitories, a bank, a grocery store, and even police and fire departments which make Shenzhen’s Foxconn facility completely self-reliable. Following the deaths of 12 employees during the first five months of 2010, a rush of negative media attention began swarming the Foxconn facility. As a result, Foxconn chairman and CEO Terry Gou immediately began taking practical steps in resolving the sudden spike in employee suicides. Gou first called for the construction of suicide nets, which were placed alongside the exterior of dormitories to catch workers who would otherwise leap to their death. The company also staged solidarity rallies, established crisis hotlines and mental health counseling, and increased wages by an average of 20 percent in an attempt to rid the negative spotlight put on the company by the global media (Brook, 2010).

Looking toward the future, Gou announced that plans were in place to bring work to migrants. Rather than living in on-campus dorms or commuting long distances to Foxconn City, smaller factories would be constructed so that people could be with their family and work at the same time. Gou believes that, by allowing employees to work in proximity to friends and relatives, there will be a positive change on suicide numbers and depression. Several companies whose products were manufactured at the Foxconn facility came forward to express their regrets regarding the 2010 suicides and insisted that working conditions were under further investigation (Maisto, 2010). Due to the overwhelming demand for their products, however, Apple has been closely linked with Foxconn and since been under intense public pressure. Despite the controversy and media coverage surrounding the ordeal, Apple has experienced no loss in consumer demand.

Steve Jobs ensured attendees at the All Things Digital convention of Apple’s involvement in the case, stating: “We’re on top of this.” As a result, the concerned public was given an added peace of mind the next time they stepped foot inside an Apple store. Yet, employees were still far from satisfied with the working conditions. Evidently, Foxconn workers sought to sue iPhone contractor Wintek on account of chemical poisoning that was later discovered to have cleaned LCD screens. A year prior to this discovery, Wintek had made the switch from alcohol to n-hexane which dried more quickly and reduced streaks (Chen, 2010). Foxconn employees immediately took notice to the pungent odor, though were completely unaware that it would affect their health. In an interview with The Guardian, Wintek worker Xiao Ling said, “We hadn’t even heard of occupational illnesses before (Chen, 2010).” Furthermore, the decision to increase employee wages at Foxconn City later resulted in the Hong Kong-based Students & Scholars Against Corporate Misbehavior (SACOM) to report that they were unaware of such raises. On October 12, 2010, SACOM also said that overtime was still to be expected from employees without compensation, and “student interns employed as cheap labor accounted for 50 percent of the workforce in some departments (Brook, 2010).” What this tells us is that Foxconn is cutting corners, employing young adults who are willing to work for less than older adults.

On Sept. 9, 2011, an iPhone app called Phone Story became available on the iPhone App Store—it was taken down and banned just four days later due to child abuse and crude content. Phone Story, which can still be found online today, depicts the working conditions and suicides at Foxconn and “attempts to provoke a critical reflection on its own technological platform (Pineschi, 2011).” This story is full of irony because it depicts the history behind the device which serves as the games’ platform. The app was created to not only expose the truth, but to help fund organizations like SACOM, who go against modern day slave owner corporations such as Foxconn. In addition to putting up nets, the company has asked employees to sign an “I promise not to kill myself” contract in an attempt to combat the suicide attempts (Mick, 2010). As mentioned in the contract, Foxconn states that the company is not liable for paying the families of employees who choose to commit suicide. This may prevent some of the suicides, but does not serve as a long-term solution to the dangerous working conditions and effects on the emotional well-being of factory workers.

Since the implementation of various safety measures taken by Foxconn, growing concern over the sweatshop-style working conditions in China persisted (Chan, Pun, & Selden, 2013). When contemplating just how one of the most successful business leaders of our time was able to get away with manufacturing his products in a modern day sweatshop, I am left dumbfounded. With great success comes great influence, therefore, I am often left with questions as to why Steve Jobs couldn’t fight for the rights of his employees. Had I worked for Apple as an employee in the United States during this time, I would certainly feel a sense of disgust regarding the type of company I was supporting. I thoroughly believe that factory workers could meet the given demand, if not surpass it, without long shifts and exposure to hazardous work environments.

Given a situation where I am working for Apple, I would obviously pay close attention to the media coverage surrounding the Foxconn dilemma. Expressing my concern to the store manager and writing to the company leaders would both be options I may consider. Had both companies failed to abide by the promises they made public in the months that followed and I continued to feel negatively toward either of them, I would opt to resign from my position at Apple. Working for a company which you regret supporting on a daily basis could certainly take its toll on an emotional level. Various factors such as my ability to find work elsewhere, my current position in the company, and promotion possibilities all would play a role in the decision-making process. As I may disapprove on how business was conducted, I may continue to work for Apple given the benefits.

As a management consultant hired by either Apple or Foxconn, I would have to agree with Terry Gou’s notion regarding the construction of sub-factories in moderately to high-populated regions. The ability for employees to leave the work environment and spend time with family would produce dramatic results. Removing mandatory overtime without compensation would also be a great idea, thereby making it optional with added benefits. If this results in supply not meeting the target demand, hiring more workers to pick up on shifts may be the solution. Also, allowing employees to take frequent breaks and socialize would undoubtedly boost the overall morale. I would recommend Foxconn to recognize hard work and reward dedicated employees with additional benefits in areas they see necessary. This would not only provide workers with a goal, but encourage them to perform to the best of their abilities. By taking these recommendations into consideration, Apple would improve their self-image and provide a better quality of care for those manufacturing their products.

Companies worldwide rely on cheap labor offered by manufacturers such as Foxconn to produce large quantities of product to meet their global demand. Many organizations are completely unaware of how the inexpensive labor is acquired, nor the poor conditions workers are exposed to during the manufacturing process. These low-cost manufacturers of goods and services rely on low wages, unpaid overtime, and harsh working conditions to produce a profit. If companies decide to raise employee salaries, offer paid overtime, and provided a safe living and working conditions, they could succeed in business and continue to operate in an ethical way. According to reports made by CEO Terry Gou, it appears that Foxconn was only making small changes to shift the negative spotlight off themselves and to satisfy groups such as SACOM. Constructing nets alongside buildings is much like placing a Band-Aid over a wound; it temporarily covers up the issue rather than solving it and preventing future incidents. Given the opportunity to make a change and avoid the harsh conditions that come along with modern-day sweatshops, I would do so in a heartbeat.

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