Dt. 10.07.

2017

FOXCONN TECHNOLOGY
GROUP
MANAGERIAL ANALYSIS AND COMMUNICATION (MAC)

PRESENTED TO
PROF. GIRISH K AGRAWAL

PRESENTED BY

ANASMITA GHOSH (P38066)

HANIL ACHARYA (P38075)
JIMMY MALHOTRA (P38078)
KARAN GARG (P38080)
SHIVANGI MAJREKAR (P38103)
 CASE STUDY ANALYSIS OF FOXCONN TECHNOLOGY GROUP CASE
1. Case Analysis:

The Foxconn Technology Group is one of the leading players in the global Electronic
Manufacturing Services (EMS) industry. Foxconn was committed to provide its clients the lowest total
cost solution which included joint-design, joint-development, manufacturing, assembly, and after-sales
services. Some of their noteworthy clients included Apple, Nintendo, HP, Nokia, Sony and Dell. Foxconn
employed about 800000 workers and had risen to capture 26% market share with its core competence
of keeping its prices low. In 2008, the growth rate was 14.5%, but growth rate declined in 2009 due to
increase in labor cost and competitive markets. Also the series of suicides committed by the Foxconn
workers had a negative impact upon the reputation of Foxconn thereby leading to dropping of stocks of
Foxconn in the market.

There was no single factor which contributed to these suicides, but a whole host of factors
which contributed to this phenomenon of suicide at Foxconn.

The adverse working conditions and rigorous work pressure faced by the workers contributed to the
high suicide rate amongst the workers. In addition to the dismal working environment, many workers,
especially migrant workers, faced difficulties in the form of social and economic discrimination.

Other difficulties that workers faced and were complimenting to the rise of suicides were the
situation under which workers joined Foxconn i.e.

1. Prevailing vulnerability of the particular segment: The migrants were already in vulnerable
condition as they are low-skilled and have limited earning opportunities in rural agencies.
Hence, they are compelled to migrate to city, even though the hukou policies were prevailing.
2. Working at young age: As it is evident that the average age of workers in Foxconn was 21.1, that
major work force in in teen age and in post adolescence age. Emotional stability at this age is
generally found to be unstable. Also, emotional and psychological maturity is not developed so
as to cope with the work pressure.
3. Lack of emotional support in form of friends & family: As the majority of workers are migrants,
they are already away from their family. Also, with restrictions of any conversation at the
production line, it hindered formation of bonding amongst the workers. Also, harsh behavior of
seniors over juniors, along with high surveillance, it did not allow the workers to create a
cultural strength amongst themselves.
4. Unequal benefits between migrants and locals: As with the rules of hukou company had to
provide less benefits to the migrants than that to locals. As a result, the workers already working
on minimum wages, were remained devoid of the benefits that other local workers would get.
This led to higher dissatisfaction of migrant workers.
 5. Alienation: With the manufacturing process divided in so many segments and monotony of
work, workers feel alienated and get a sense of exploitation and being controlled.

2. Objectives:

The suicide of employees of Foxconn was a huge problem as it was a huge blow to the human
capital of the company and also to the market reputation of Foxconn. The Foxconn needs to
simultaneously address the issues leading to the worker suicides as well as the decline of the profit
margin of Foxconn. Hence, the Foxconn management team must work keeping the following objectives
in mind:

1. To maintain its position in the EMS market as leading manufacturing factory.

2. To maintain the reputation in the public as well as the clients.
3. To increase the profit margin which is on a downfall in recent years.

3. Key stakeholders:

1. Foxconn Employees
2. Foxconn Management
3. Foxconn Clients

4. Problem Statement

How to device and implement equitable and financially feasible reforms in labor policies in order
to alleviate the adverse/harsh working conditions of the migrant workers at factory of Foxconn
Shenzhen plant, in the backdrop of Chinas socio-political policies restricting migration.

5. Criteria

Provide safe and healthy work environment and make some reforms in favor of migrant
workers:
Any decision taken by Foxconn must be such that at least the basic physical and mental needs of
the workers are met in an appropriate manner. This may include better provision for basic amenities
such as proper ventilation in the work space, access to laundry services etc.

This problem must also be considered from a human rights perspective in the sense that the dignity and
autonomy of the workers cannot be compromised. Respect for the workers must be preserved, so some
basic labor law policies within Foxconn must be changed and reformed so that the social and economic
shortages of the migrant workers are met.

Operational expenditure must be kept at a minimum

While considering any kind of reforms Foxconn will have to see to it that there is none or
minimum rise in the operational cost of the factory.