Foxconn Technology Group (A) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION

Foxconn Technology group was founded in 1974 by Terry Gou, specializes in computers, consumer electronics, communications, digital content, sales of high-tech enterprises and auto-parts. Foxconn is considered as the largest and the fastest growing multinational company in the Electronic manufacturing services EMS industry. Foxconn is one of the largest IT base industries and provides lowest total cost solutions to its partners. Foxconn Technology group and its subsidiaries comprise of 800,000 employees, which include half of its employees from, Longhua Science and Technology Park.

Foxconn is the leading electronics manufacturer that supplied Hewlett-Packard, Samsung, Cisco, Apple and other world known brands. Moreover, the company is recognized as a leader in innovative, creativity and technical advancement and hold approximately 25,000 patents worldwide. In the year, 2009, the company achieved revenue of $60 billion accounting for 26% of the EMS market. However, slow growth rate and the high competition in the technology industry leads the company to face multiple issues and challenges. Furthermore, issues arise in the company such as harsh working conditions, low wages of the employees, no personal space, lack of freedom of speech and health related issues due to the improper working environment.

PROBLEM STATEMENT

According to the case, numerous issues and challenges arise in the Foxconn, which leads the company to face revenue and profits downfall and brought Foxconn into the center of the public limelight. One of the major issues is the series of employees’ suicide at Foxconn Technology group in 2010. Moreover, the issues include long working hours, discrimination among rural and urban employees, lack of diversity, forced to work overtime, low-wage rate, high turnover rate and centralized management culture.

Furthermore, the suicide was mainly committed by the young employees due to high work pressure and demotivation by the senior employees. Apart from that, the rising operating and financial costs decreased the company’s first quarter 20% net profits in 2011. Therefore, it is highly important for the management team to develop a strategy, to adopt a series of remedial and ethical practices. Moreover, the company should overcome the issues that arise in chain social responsibility, human resource department, occupational safety and social policies.

Q. What is Foxconn’s business model? Is it sustainable? Why or why not?

Foxconn’s leadership approach was founded on the basis to sustain a constant focus on Component Module move and services. The company has a vertical integrated one-stop-shopping business model from design and manufactures to logistics across the globe. Moreover, the company’s business model comprises of five components such as speed, technology, quality, flexibility and cost-efficiency. Furthermore, the company delivers lowest total cost solutions to its partners and subsidiaries.

However, the company has an imbalance employment model because the goal of the business and its employee’s dot not create value for both the parties and workers, in order to meet the desired end of the company. Moreover, Mr. Gou broke down the production process into the simple task, monotonous working conditions, which led the employees to face issues such as long working hours, forced to work overtime and low-wage rate. Furthermore, Mr. Gou prefers the company’s benefits more than the employee benefits.

Q. What is the profile of Foxconn workers? Why are Foxconn jobs in high demand?

Foxconn Technology group and its subsidiaries comprise of 800,000 employees in Longhua Science and Technology Park. The average age of the workers is 21.1 with the youngest being only 15 years old. The majority of the employees do not possess a high school education, and most workers are migrating from the different cities such as Henan, Hubei, and Hunan.

The majority of the workers on the assembly line are low-skilled workers. Moreover, the Foxconn jobs are high in demand because the company offered more than other manufacturers and recognized one of the best places for low-skilled workers. In addition, the employees are provided with legal contracts and offer subsidies for meals, housing, insurance and free dormitories.

Q. What is happening at the country level? Is this Foxconn’s fault?

Labor practices were poorly regulated and structured in China, with low labor costs. Moreover, the All-China Federation Trade Union (ACFTU) failed to protect workers from unnecessary events and accidents. Furthermore, due to poor compliance in most regions of the country, 15% of the urban employees and 70% of the rural employees are hired without written contracts. Apart from that, there is no law imposed by the government on the occupational safety and social welfare..................

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