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Essay Paper – Foxconn Case

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    Introduction to Paper

    In 2010, Foxconn, the largest contract manufacturer in the world, had been under serious scrutiny for a series of suicides occurring at the Shenzhen location. Although the underlining reasons for the suicides are quite complicated, and related to a number of factors such as society, management, and operational issues, based on our analysis, we believe many of the communication tactics that have been used by the company, could be improved. This paper provides a basic overview of the company, a description of the series of suicides leading to media scrutiny, an analysis of the ommunication problem, an example of the solution and recommended steps for implementation.

    Company Background

    Gou Taiming founded Hon Hai Precision Industry Company Ltd, the anchor company of Foxconn Technology Group in 1974. Mr. Taiming’s vision was to provide the lowest “total cost” solution to increase the affordability of electronics products everywhere . Foxconn is the largest contract manufacturer of electronic components for such companies as Apple, Dell, HP and many others.

    Many companies outsource manufacturing to Foxconn for its cost efficiency, high quality standards and confidentiality. Foxconn is headquartered in Taiwan, with its largest manufacturing plant located in mainland China in Longhua, Shenzhen. The Shenzhen location, which opened in 1988, employs close to 420,000 workers. The site is often referred to as Foxconn City, as it offers a walled campus, factories, dormitories, downtown complex, restaurants and other amenities. Some employees live outside of the campus, but most live in the employee dormitories.

    The workers often live in dormitories of eight to ten people per room . Foxconn has been under media scrutiny for some time due to the employee suicides that were committed in their factories. As a result, Foxconn has been criticized for poor working conditions, very low wages and very long hours. Wages reported range from $132 and $300 a month, and working hours often go beyond 12 hours a day .

    The Problem

    Foxconn’s Responses to the Suicides In 2009 and 2010, the company has been under serious scrutiny for a series of suicides occurring at the Shenzhen location.

    A total of 12 workers committed suicide in 2010, causing media involvement as well as investigations from nonprofit organizations such as the Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM). The series of suicides began after one worker, Sun Danyung, 25, jumped from his 12th floor apartment in 2009, after losing an iPhone prototype . As a result of the death, Foxconn released two statements to the media. The first statement from Foxconn said its security chief (who allegedly searched and beat Mr.

    Danyung to try to find the lost iphone prototype, before Mr. Danyung committed suicide) has been suspended and turned over to the police . The second statement came from Foxconn executive Li Jinming, who said in a statement that Sun’s death showed that the company needed to do a better job helping its employees with psychological pressures. “Sun Danyong graduated from a good school. He joined the company in 2008. He had an extremely bright future. The group and I feel deep pain and regret when a young person dies like this. After Sun Danyung, 12 additional suicides occurred at the Shenzhen plant. Foxconn failed to provide official statements to the media regarding the first five deaths of 2010. The sixth death of 2010 however, spurred Foxconn to respond to an interview with YanCheng Post which took place on April 20th, 2010. The Director of Media, Liu Kun stated in the interview, “The tragedy that happened in the past two months shows some loopholes in our management system. Although it is hard to manage 420,000 employees in one campus, this couldn’t be an excuse. After the seventh death occurred, Media Director, Liu Kun again went to the media. This time, he was interviewed by CCTV, China’s most official media channel, and was quoted saying, “Regarding this 7th jump, we are very pleased to see, we have put in our best efforts, we had done some pre-assessment and made pre-intervention. ” After the eighth death occurred, Foxconn took additional measures but not in the media. To combat suicides at the plant, Foxconn decided to offer 24 hour counseling services to employees and announced plans to hire 2000 psychologists.

    In addition, Foxconn decided to hire Buddhist monks from Wutai Mountain to carry out religious rituals to purify its Shenzhen plants and to console workers. They were also offering a stress-release center with piped-in music where workers were invited to hit a punching bags with a picture of their supervisor . The ninth death received no response from Foxconn, at least not publicly. However, after the 10th death occurred, CEO Gou Taiming officially spoke out in Taiwan denying his company is a sweatshop. At this point, protestors were rallying outside the Foxconn facilities.

    According to reports, on May 24, 2010, Gou said the outside world did not know the facts surrounding the string of suicides. He said, “a lot of information cannot be currently disclosed and we are simply managing to handle the issue. ” Gou also added that Foxconn has a total of more than 800,000 workers so it is extremely difficult to manage such a workforce. However, he said that they are confident the situation will soon be stabilized. Gou also mentioned that if there were problems with working conditions, they would have been found earlier .

    Finally, after the 11th death, Gou Taiming made a media appearance. During the appearance, Gou bowed three times for respect, pleading for more positive media coverage and to avoid the contagion. Gou said, “I cannot guarantee that similar deaths will not happen again, but we are doing our utmost to look after and care more for our staff. ” No less than 12 hours after Gou gave his statement for the 11th suicide jump, the 12th death occurred. Response from the Government & Foxconn’s Clients The string of deaths and media scrutiny has drawn attention to the labor practices at Foxconn.

    As a result, Wang Yang, the governor of Guangdong province of China has called for improved conditions for the workers. Wang said that the government must work together with the company to “take effective measures to prevent similar tragedies from happening again”. Wang called for measures such as increasing sports and leisure activities for the workers, and improving communication between worker and employer. Shenzhen government held a press conference on May 26,2010, stating the government was shocked and felt pitiful. The Shenzhen government formed a task force of three deputy mayors to investigate the issue.

    In response to the Foxconn suicides, Sony released a statement saying that it “has begun taking steps to re-evaluate the working environment at Foxconn. ” Apple, Dell, Nokia and Hewlett Packard issued similar statements. Apple’s chief executive, Steven P. Jobs, said that he was troubled by the suicides .

    Analysis of the Communication Problem

    Based on the analysis of the case, Foxconn failed to effectively communicate in four ways: •They failed to acknowledge the problem – operational management problem. oThey were late in responding. •They were reactive not proactive in the media. They never stated their action plan in the media on how to fix the problem. •Finally, they never had a direct dialogue with the employees or their families publicly. Foxconn initially tried to trivialize the incident and did not acknowledge that the company had a problem. Going over the time line for the Foxconn suicide cases, initially, Foxconn did not acknowledge that there was a problem within the company leading employees to commit suicides. As a result, Foxconn responded to the first suicide case in 2009 by saying the company had to work harder to help employees deal with psychological pressures.

    In 2010, Foxconn failed to communicate publicly for the first six deaths that occurred within a two month period. By the eighth suicide case, Foxconn began to react by creating a psychological service center, hiring counselors, setting up help lines, and bringing in Buddhist monks. By the 10th suicide case, the CEO of the company, Mr. Gou, finally spoke publicly about the incidents in Taiwan, and actually tried to make light of the incident by stating, “10 even the jump”. In an exclusive interview with Bloomberg Business-week, Gou conceded that he didn’t immediately grasp the significance of the suicides. I should be honest with you,” he says. “The first one, second one, and third one, I did not see this as a serious problem. We had around 800,000 employees, and here [in Longhua] we are about 2. 1 square kilometers. At the moment, I’m feeling guilty. But at that moment, I didn’t think I should be taking full responsibility. ” Foxconn constantly came across reactive not proactive in the media. Foxconn should have realized early on that there was an underlying problem in the company causing the suicides.

    Although Foxconn commented on the first suicide in 2009 when interviewed by the media, the company did not proactively speak up regarding any of the six suicides that occurred within a two month period in 2010. Only when there was an intervention by the media and a public outcry did Foxconn release an official statement to the press. The company should have been proactive in providing a solution to the underlying problem causing the suicides and having this information clearly communicated to the media and the employees.

    Foxconn actually tried to solve the problem by providing solutions to immediate issues like forming a suicide hotline or putting up nets around the building to prevent people from jumping from the buildings. These suicide preventive measures were communicated to the media, but by this point it was too late, as the company’s reputation had already been tarnished. Foxconn never stated its action plan in the media on how the company was going to improve conditions for employees. The CEO of Foxconn failed on a multitude of levels, as he ever provided concrete examples of how he will improve conditions to solve the problems Foxconn has been facing and when he finally responded, his response was ineffective. Not only did he consistently show his ignorance on the matter of bad work ethics within his company, but he also made controversial remarks which caused a stir in the media. Firstly, the CEO should have been the first person to have addressed the suicides as soon as they happened. Instead, the CEO did not speak up until after the 10th suicide had taken place, only to address the press with an opening statement of “10 even the jump. Furthermore the CEO also made statements like Foxconn employees total more than 80 million, so the staff is very difficult to manage. Finally on the 11th suicide, the CEO did bow three times, but not for the suicide, instead pleading the media to cover some of the bright sides of Foxconn. Even during this press conference, the CEO actually stated “I cannot guarantee that similar deaths will not happen again, but we are doing our utmost to look after and care more for our staff. ” Twelve hours after Mr. Guo gave this speech the 12th suicide at Foxconn took place.

    Finally, Foxconn never had a direct dialogue with the employees or their families publicly. Foxconn should have directly addressed the issue with the employees. No article states that the company or the CEO officially apologized to the families of the victims or to the employees. In Chinese culture, forgiveness and acknowledgement of ones mistakes is paramount. The CEO of Foxconn at some point should have apologized to the families of the victims to acknowledge that the company was responsible to a certain extent for the cause of the victims committing suicide.

    Furthermore Mr. Guo should have met with the employees stating that there was a problem within the company and reassured them that the company is working to resolve the issues.


    Foxconn Conference Design Implementation Based on the analysis, we recommend a press conference done by Guo Taiming to show the company is deeply apologetic for the situation and is working towards improving conditions. Foxconn should have taken initiative to explain to the public what had happened on its Shenzhan campus and what the company plans to do to prevent more deaths in the future.

    Though it is too late to give the conference after the 11th death occurred, Foxconn still should have addressed the public at that point. To be effective, we suggest the conference is implemented in the following way: 1. The president, Guo Taiming, representing the board members, should attend the conference and make a statement to the public. From the employees’ and public’s point of view, he takes full responsibility of the company’s actions. His involvements will show to the public the company’s willingness to change. 2.

    National and local media, including TV, Newspaper and Website, should be invited for the conference. CCTV, Shenzhen TV, Guangdong TV, Guangdong Daily, Shenzhen Daily, Gongren Daily, Investment Times, Sina. com, Sohu. com are the most important media should all be invited. 3. Invite 8-10 front-line employees to attend the conference. Employees should sit around Guo, instead of opposite to Guo. This seating arrangement will signal to the audience that Foxconn wants to sit with the employees and work with them to solve the problem.

    This will also give a perception to the public that the employees still trust Foxconn. Guo Taiming should bow to the public three times to show his deepest sorrow and empathy to the families who lost their members. Bowing three times is the most serious Chinese protocol to show “sorrow” and “regret” to someone. Without this gesture, he can hardly convince audiences that he is really sorry. 4. Every department, which is responsible for the reform project should briefly describe its plan of increasing employee satisfaction.

    Unlike other statements the company made previously, simply stating they would take action in the future, this time, in this official conference, Foxconn needs to provide a detailed plan and timeline on what actions they will take. 5. Add a question and answer session to have a direct dialogue with the media and employee representatives. Foxconn never took the initiative to have a direct dialogue with either its employees or the public, even after the 11th death, raising doubt that the company did in fact treat the employees humanely. In the conference, Foxconn should speak the truth to prove the factory is not a sweatshop.

    The company should not argue with questioners, but instead show facts with pictures and videos and emphasize their reform plan. 6. The conference should be limited to one hour. If it is too short, Foxconn can’t show the sincerity; if it is too long, Foxconn might face too many difficult questions and turn into a blame session. Ideally, the conference should be broken up into two sessions the first 45 minutes should be assigned to Guo and the departments to speak and the last 15 minutes for Q&A. Official Statement from Guo Taiming, Foxconn Foxconn apologizes to employees and their families.

    The president, Guo Taiming addresses actions to improve employee satisfaction and urges young workers to treasure their lives. Shenzhen, China, May 26th, 2010, from Guo Taiming–I am truly saddened by the death of our employees. Representing all the board members of Foxconn and the whole Foxconn group, I want to apologize that Foxconn failed to meet a few of our employees’ expectations to the point that they chose to harm themselves. I also want to extend my sincere condolences to their families and friends, and to employees they have touched through their work.

    I admit that Foxconn is not a perfect organization in any way. We possess all the weaknesses that every assembly line factory possesses. The fact that we have more than 420,000 employees in the Shenzhen campus makes the management of the largest factory in the world even more difficult. We should have worked together with our employees who feel proud of working for Foxconn to resolve the problem we are facing. Unfortunately, we did not learn this lesson until after those young people chose to take their own lives. The board committee has decided to focus on the improvement of employee satisfaction as our highest priority.

    We will increase our employees’ basic salary by 30% effective immediately; we will recruit more employees to decrease the overtime hours to comply with country standards; we will hire permanent psychological consultants to ease employees’ stress; we will form a social department responsible for social events to enrich employees’ lives on campus; we will enhance our communication channel to reach each employee—and all board members will take turns to attend “Talk to employees” day to listen to the voice of the employees.

    We have the confidence that we can build a better Foxconn for all of our employees as the employees are Foxconn’s most important assets. I would like to close, by sharing some words with my employees. You are young, very young. You all hold bright futures for yourself, for your family and for the people whom you love. You all came to Foxconn for the pursuit of hope, not for the grief of your parents. You are just entering into society; you are about to reward your lives; you are the hope for everyone who loves you. Don’t give up your life! As long as you are alive, you have a chance to ake a change. Nothing is more important than your life. Nothing! Not money, not status, not face. Compared to your life, your only life, without life there is nothing worth fighting for. I am a dad. I can perfectly feel the sorrow for those parents who lost their beloved children would feel. Here, I promise to you and your families—I am working on creating a better system for you. I want to hear from you; I want you to help me make our factory better for everyone. Next time, when you feel stressed, unhappy, or unmotivated, don’t hesitate to approach me directly.

    My door is always open to you! Again, life is a beautiful journey. You just began this journey and still have a long way to go. Treasure your life. Value your life.


    Timeline of Suicides in 2010 First suicide: Jan. 23rd, 2010 Ma Xiangqian, Male, 19-year-old Second suicide: Mar. 11th, 2010 Li, Male, 20-year-old Third suicide: Mar. 29th, 2010 Male, 23-year-old Fourth suicide: Apr. th, 2010 Rao, Female, 18-year-old, failed suicide attempt Fifth suicide: Apr. 7th, 2010 Ning, Female, 18-year-old Sixth suicide: Apr. 7th, 2010 Sun, Male, 22-year-old Seventh suicide: May 6th, 2010 Lu Xiang, Male, 24-year-old Eighth suicide: May 11th, 2010, Female, 19-year-old Ninth suicide: May 14th, 2010, Male, 21-year-old Tenth suicide: May 21st, 2010, Male, 22-year-old Eleventh suicide: May 25th, 2010, Male Twelfth suicide: May 26th, 2010, Male

    Thirteenth suicide: May 27th, 2010, Male, failed suicide attempt Fourteenth suicide: Nov. 5th, 2010, Male, 23-year-old


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