Ethical Practices at Foxconn

Apple is considered as one of the powerhouses for production of consumer electronics. The current ethical dilemma faced by Apple is Foxconn case that has challenged the company to ensure it raises its ethical standards (Xu and Li 372). The damages attributed to Foxconn involvement has resulted in Apple facing backlash for its the inability to control Foxconn unethical working conditions for its employees. By utilizing Trevino and Nelson’s Ethical Culture Model (ECM) and Brown, Trevino and Harrison’s Ethical Leadership Model (ELM), Foxconn case study identified issues such as unethical working environment. Propositions have been made on how Foxconn can improve its current immoral environment and ensure it reinstates the former glory of Apple by being not only its significant parts supplier but also honoring Apple code of ethics to its suppliers. The paper is organized into three sections. The first section the paper will introduce Apple’s supplier Foxconn ethical issues that over the years have been under limelight – the increased reports of the employees’ suicides. Section two explores Foxconn unethical working conditions through two cultural theories and the effect on the company production. The third section of the paper illustrates in detail the proposed solutions on how to deal with the eminent issues in the company to reinstate Apple’s former glory of the best company in electronics production.

Introduction

Apple’s ethical module stays ahead of the competition through the provision of exceptional consumer electronic products while at the same time upholding the company’s ethical standards; Apple Inc. ensures that its workforce displays the required appropriate code of conduct. The company bases its success on upholding innovation, demonstrating integrity and the production of high-end consumer electronic products and services. To maintain their ethical model, Apple Inc. has drawn four main principles that define the corporation. These are compliance, respect, confidentiality, and honesty in their operations. The company has gone to the extent of drafting their code of business that dictates their business operations within their headquarters in the United States and other countries such as their assembly factory in China. The company has also updated their website on the policies concerning direct conflict of interest, corporate governance, and steps to follow while reporting unaccepted code of conduct in the organization. The company has an active Business Conduct Helpline that employees can use to shed light on specific instances of misconduct, such as misconduct in the finance committee. Foxconn is a plant that deals with manufacturing of Apple electronic parts. Foxconn is the single largest employer in mainland China with an approximate 1.3 million people on its payroll. In 2017, Apple’s unethical working conditions have been primarily noted in Foxconn. A story in print by the New York Times has revealed that there is unethical management system at Foxconn. All the employees working at the Foxconn identified to have a gate pass, where they have to clock in at specific times and observe strict working schedules (Lucas, Kang, and Li 100). The working conditions in the company have attracted scrutiny with the company compound being state protected and considered one of the most secretive and sealed-off premises. Additional research has also revealed that the working conditions have been deteriorating (Xu and Li 372).

Therefore, Foxconn has been linked with a total of twelve suicides by jumping off the Foxconn building. At Foxconn, workers are expected to engage in an exhausting twelve hours shift with no rest periods. The workload pressure has led the management system to ban socialization and interactions at Foxconn and workers were forced to endure long periods of active work that have turned them more into machines than humans (Xu and Li 372). The Foxconn management team had banned interaction at the workshop facilities and if a worker is found communicating with another, they would be shouted at, and their names entered in the black book, which in most cases led to them being fined. The undercover reported that Apple, laid off more than ten thousand jobs without warning when there was a financial downturn in the sale of the Apple products. Additional reports have also shown that workers at Foxconn quit their jobs at an alarming rate of fifteen thousand workers per month, due to the immense pressure from the management (Lucas and Li 102). Additionally, the administration forced employees to work an average of a hundred and twenty hours per month as opposed to Apple’s set time of seventy hours per month. This termed as unethical working practice exercised by the management at Foxconn. Foxconn unethical working condition has provoked a lot of public outcry and in recent times, Apple Inc has been under public scrutiny to explain Foxconn working condition.

Factors Contributing to Apple Unethical Practices at Foxconn with Consideration of Ethical Culture and Leadership Model

Analysis of the unethical practices conducted at Foxconn will be performed with an exploration of two ethical leadership and cultural models.

Trevino and Nelson’s Ethical Culture Model (ECM)

Brown, Trevino and Harrison’s Ethical Leadership Model (ELM)

Apple reputation has drastically been bruised over the last couple of years, primarily, due to its suppliers. Foxconn registered as one of the leading suppliers who has put Apple on the spotlight when the number of workers committing suicide has increased over the last few years. Apple management has been placed under pressure by the public to explain why at Foxconn the working conditions are considered horrible. Some of the working environments that have been affected are company management systems, human and labor rights, direct impact on the environment, safety, and health (Xu and Li 373).

Trevino and Nelson’s Ethical Culture Model (ECM) explores the need to ensure a company is capable of managing both the formal and informal systems at the workplace to produce the desired result (Bulgarella 9). Therefore, depending on the level of alignment, a company has the capability to develop the ethical culture. The moral platforms include management systems, performance of the employees, training of the employees, decision making process and employees selection system. The informal platform in the company entails norms, rituals, language, stories, and role models in a company. The demand for the Apple products has over the years increased due to their high quality. However, this has resulted in Apple employees being put under intense pressure to ensure they meet the current demand.

Foxconn management has ignored the Ethical Culture Model (ECM) as they emphasize the need to ensure there is stability in the formal and informal sector in the company. The management at Foxconn has provided horrible working conditions, which have resulted in many employees considering and some committing suicide. The employees at Foxconn explain they are not allowed to take long breaks and expected to work for 120 hours per month, as opposed to 70 hours recommended by the Apple management. When employees represent their grievances to respective managers, they are shunned away and often embarrassed in front of other employees to ensure the rest of the workers are discouraged from airing their grievances. Therefore, based on the management conduct, most employees are not comfortable working in their current conditions, which results in the demoralization.

Brown, Trevino and Harrison’s Ethical Leadership Model (ELM) dictates honesty in the workplace, trust on the leaders shown by the employees, interactional fairness and socialized charismatic leadership (Brown and Linda 600). Therefore, based on the model the leaders can gauge their effectiveness in administration, employees’ satisfaction, and dedication to their respective work posts, and how willing they are to report cases of misconduct or grievances regarding their current working conditions to the management (Haidt and Trevino). At Foxconn, the administration has treated an entity that the employees need to avoid at all times (Xu and Li 374). Therefore, based on the poor relationships witnessed at Foxconn between leaders and the employees, the leaders are not capable of discharging their duties as expected. Most of the employees at Foxconn are not comfortable due to the stressful working conditions, which in turn translates to employee’s satisfaction to be low.

The significant reasons attributing to Foxconn unethical working conditions include:

1. The hiring process at Foxconn is not fair which results to specific individuals getting the job posts as opposed to equal employment opportunities as proposed by Apple management.

2. The leadership at Foxconn is in denial on the current unethical conditions presented at the company.

3. Foxconn is one of the suppliers of Apple and thus there is reduced accountability from Apple parent company on the conduct of its supplier (Foxconn).

4. Workers at Foxconn are not fairly compensated despite the aggressive performance management systems employed by the company.

The identified issues are in unison with Ethical Culture Model (ECM) and Ethical Leadership Model (ELM), and there are proposed measures to ensure the problems identified at Foxconn are solved, and Apple manages to recover its reputation. The proposed rules to deal with the recognized unethical working condition at Foxconn include:

1. Unbiased hiring process by the management.

2. Ensure the compensation plan by the management is fair.

3. Provide the best working conditions with flexible working hours.

4. Encourage better leadership at Foxconn where employees can communicate with their employers with ease and encouraged to perform their best.

Proposed Measures to Deal with Unethical Working Conditions at Foxconn

Formal Systems

i) Hiring Process

Foxconn needs to provide a fair and equal hiring opportunity for all applicants in the company different job posts. To enable this, Foxconn needs to publish its human resource requirements on their website. Ethical Culture Model (ECM) encourages the need to ensure the employees are given an equal opportunity at the workplace to perform their duties effectively. When employees feel they meet the requirements of the employers, they receive the opportunity to be part of the company competent team and are willing to work their best to achieve the vision and goals of the company. A company that allows transparency in its hiring process ensures it reaches a global coverage regarding sourcing the human resource (Bharathy and Azish 13). Ideal candidates who think they have met the company’s requirements are invited to apply on the company’s website despite their country of origin (Bulgarella 10). These applications are then to be reviewed by the human resource department at Apple Inc., and the shortlisted candidates are sent an email to invite them for interviews. The interview is conducted by the human resource department, in the presence of some members of the management committee to determine the ideal candidate for their position. Thus, there are no strings to pull while seeking employment; all the recruitment process follows the required hiring procedure in the company.

ii) Reward Structures

Despite there being long hours of working at the company with extensive research to be done, many employees say that the benefits of working for Apple Inc. outweigh the drawbacks. The employees report that in comparison to other companies, Apple Inc. provide good compensation in all the job positions, but they require workforce ensure they earn the proposed high salaries. Apple Inc. has also adopted a system of providing their employees with a discount on every purchase they make on their products which needs to be employed by Foxconn. This feature also needs to be extended to the retired employees as a mean of a reward structure they have implemented in their policy. Ethical Culture Model (ECM) explores that when the employees are fairly compensated for the assignments, they are willing to dedicate themselves to the company’s objectives (Bulgarella 7). Thus, Foxconn needs to not only provide the required financial rewards to the employees but also ensure they have decent working hours and flexibility.

iii) The Working Environment

Apple Inc. has redefined the working environment, setting up a standard that most companies would only dream about. Apple Inc. does not only provide an ethical working standard because it is required by the law but takes a step further in their design front. Foxconn, as a supplier for Apple, needs to embrace Apple’s current working environment and corporate ethics standards to ensure the best results are guaranteed. A futuristic design at Foxconn is expected to encourage innovation in the place of work, which is the objective of the company to ensure creativity is enhanced at all times. Foxconn hoped to provide all the requirements regarding tools, machines, and equipment in the working environment that has boosted their employees’ creativity in the designing and manufacturing process. When workers are given an occasion to work in a creative environment, they are encouraged to grow and develop to be excellent employees.

iv) Compensation at Apple Inc.

Apple Inc. describes their compensation policy to reward the human resource who work in certain industrialized or administrative positions and perform specific errands and duties. The company achieves this through the stipulation of cash compensation that comprises annual bonuses in addition to the base pay to these specified workers in the company. To ensure their compensation, Apple Inc. files state the compensation reward that is to be given out regarding bonuses at the end of each of their financial year. Foxconn needs to embrace the proposed Apple’s compensation plan to ensure all the employees at Foxconn feel sufficiently appreciated for their efforts with ease which is essential for company’s development.

Informal Systems

Foxconn has an opportunity to transform the current employees’ satisfaction levels by being more attentive to the needs of the workers. At the company, the employees complain of crazy work schedules. To motivate them to work and ensure they perform their best at their locations, Foxconn management needs to be more attentive to the employees and ensure their needs are well addressed (Bharathy and Azish 14). Employees are the backbone of a company, according to Ethical Leadership Model (ELM), Foxconn has an opportunity to allow both leaders and managers to build lasting relationships with the staff and ensure they encourage the employees to perform their best and have a better working culture (Xu and Li 376).

Conclusion

Apple Inc. is a reputable organization, and the technology they have brought to the consumer electronics market has been considered the best in the industry. The measure that Apple has taken in ensuring that they maintain a healthy working environment, concern the laws, and observe ethical issues is excellent. However, there have been several reports regarding the violation of moral code such as the poor working conditions at the Apple’s main supplier, Foxconn. Foxconn has an opportunity to become the best supplier of Apple products by ensuring the current working conditions are improved. Some of the discussed measures to ensure the company has the best working environment include improved compensation, clear reward system and working conditions for the employees, and well-defined hiring processes.

Works Cited

Bharathy Premachandra and Azish Filabi. “Under pressure: Wells Fargo, misconduct, leadership and culture.” Business Integrity through Research (2018): 1-28

Brown, Michael E., and Linda K. Treviño. ”Ethical leadership: a review and future directions.” The leadership quarterly 17.6 (2006): 595-616.

Bulgarella, Caterina. ”A Two-Factor Model of Ethical Culture: A Conceptual Frame for Ethical Systems” Business Integrity through Research (n.d.): 1-15.

Haidt, Jonathan, and Linda Trevino. ”Make business ethics a cumulative science.” Nature Human Behaviour 1.0027 (2017).

Lucas, Kristen, Dongjing Kang, and Zhou Li. ”Workplace dignity in a total institution: Examining the experiences of Foxconn’s migrant workforce.” Journal of business ethics114.1 (2013): 91-106.

Xu, Kaibin, and Wenqing Li. ”An ethical stakeholder approach to crisis communication: A case study of Foxconn’s 2010 employee suicide crisis.” Journal of Business Ethics 117.2 (2013): 371-386.