ASSIGMENT

BUSINESS ETHIC

CASE STUDY OF FOXCONN TECHNOLOGY GROUP

By :
Riyanto C1B014019
Asiathul Masitoh
C1B014052
Fauzan Ade W
C1B014099

MINISTRY OF RESEARCH, TECHNOLOGY AND HIGHER EDUCATION

JENDERAL SOEDIRMAN UNIVERSITY
ECONOMICS AND BUSINESS FACULTY
PURWOKERTO
2017

CHAPTER I

BACKGROUND

Ethical behavior in business activities is something that is important for the

 survival of the business. Unethical business would be detrimental to the business itself,
especially when seen from a long term perspective. A good business is not just a
profitable business, but a good business is the business that not only have a good
profitable business but also morally. Good behavior in a business context, is appropriate
behavior with moral values.
One of the case studies we will describe here is an unethical behavior that
conducted by the Taiwanese company Foxconn, where Foxconn is considered do
improper business. Many of the committed violations ranging from inhumane
management style that resulted in the emergence of excessive stress so that the
employee committed suicide en masse.

CHAPTER II

DISCUSSION

A. Profile company Foxconn Technology Group

 Foxconn Technology Group is a multinational company located in Taiwan which is
headquartered in Tucheng, Taiwan and is part of Hon Hai Precision Industry Co. Ltd.
Foxconn is the largest maker of electronic components in the world, including printing
circuit boards. Foxconn is famous because of its dominance in the special outsourcing
sector, making it popular among European, Japanese and Americans companies which
wants to reduce their labor costs without sacrificing the quality. Famous products
manufactured by Foxconn including the iPhone and iPad. Foxconn is the largest exporter
in China and the second largest exporter in the Czech Republic. Foxconn has a workforce
of 900,000 workers across China. The corporation will expand the workforce to 1.3
million people in late 2011.

B. Unethical behavior conducted by Foxconn

Recently, civil society and the media spot Foxconn because it is not
outstanding or have benefits. however, because of seventeen young workers who died
from suicide between January and August 2010 are forcing the world to reflect on the
fate of front-line workers at Foxconn
and other factories.

The suicidal performed by workers in foxconn is the result of workload and working
conditions which is inhuman and other than that many unethical behavior business done
by foxcon causing excessive stress and ended up with suicides by several employee. Other
factors causing the stress experienced by workers Foxconn is as follows:
1. Wages, Hours of Work and Overtime Asforced
The result of the labor that have low wages force workers in the foxconn
factory to take overtime even if the amount exceeds the rules set by the
government, the basic salary is not enough for employees who lives in big city,
from June 2010 onwards, the basic wage Foxconn frontline workers increased from
CNY 1200 (Rp2.316.878) per month in Shenzhen, the minimum wage in Shenzen
fact CNY 1100 per month. In other words, the basic wage front-line workers at
Foxconn only CNY 100 more than the minimum wage. eventually they were
forced to work with a very high working hours to meet their daily living costs.
In China the limits to hours of work are 49 hours per week to 6 days, while a
large part foxconn employees spend working hours of 60 hours (10-11 hours per
day) of work per week, including weekends and holidays, even they could only
have day off every one day of each month and have to work for months without a
day off when chasing a target production.

2. Physical condition and working environment

At Foxconn factory most of the workers had to stand up to do his job. Worse
case is, they have to stand like a soldier. For the workers that to be able to sit, they
should also sit in a straight line. They only have 30 minutes to eat in one day, other
than that they have to work in the factory hall hallways where it’s stuffy and dusty.

Foxconn workers indeed was given a place to stay by the company but the
place are less worthy place where they have to share 1 room with 19 other people,
with bunk beds. Also from the security side, the workers are not given any personal
protection. Though their work related or contiminated by chemicals such as
benzana and electronic dangerous equipment tool.

3. Climate organization
i. Military-style management
One of the management style that applied military employment systems,
causing stress on employees. In order to maximize productivity, workers at
Foxconn were made to work like a machine. They have to work continuously
for more than 10-11 hours a day. They can not stop for a moment.
 ii. Inhuman punishment
The manager and supervision yelled at workers for small errors or
because of slow production. Many of them are just trying to get used to the
scorn of management. Regardless of being scolded, some other form of
punishment used among workers who make mistakes or violate the rules of
the plant, they will receive a punishment such as cleaning the toilets and
waging cuts. More than that, the details of those cases will be posted on the
bulletin board.

4. Violation of underage employees and Abuse of Student Internships

Foxconn is the main supplier of Apple products in China, admitted employing
children, with the youngest is 14 years old. Yet according to the regulations in China,
the minimum age of workers is 16 years of age. Based on the statement Foxconn,
workers who are under the age of 16 years. They are employed at the Foxconn
factory in the city of Yantai in eastern China. In June, Foxconn stopped to recruit
new workers in Shenzhen. Instead, foxconn opened a job vacancies that were filled
by thousands of student interns.
Internships have always been part of the curriculum of vocational schools. To
prevent the exploitation of students, there are rules to protect student interns for
example in clause 5, the Regulation stipulates that an intern working hours should
not exceed 8 hours a day. In fact, the student interns at Foxconn are regular workers
on the production line. None of them can be exempted from overtime. Because they
are legal workers with apprentice status, they are not protected by the Labor Law
and Labor Contract Law, so that students do not obtain a social insurance intern.
However Foxconn and vocational schools are responsible for roughly and excessive
exploitation of the student intern.

C. The solution in the Problem Solving

Foxconn has done much to overcome the tragedy of suicide workers. Such as
installing window Netting at the factory and flats of employees, but unfortunately,
there haven’t been a commitment to structural reform, for example by replacing its
management system to be more humane. Based on the findings above, there are
some solutions that we provide are:
1. Foxconn should increase the basic wage for workers in accordance with a
proper living standard in each region the company operates.

2. Foxconn should stop employing minors and abuse internship worker in

accordance with applicable regulations.
3. Foxconn have to adjust working hours and overtime hours in accordance with
applicable regulations.
4. Foxconn should make improvements in the workplace for workers and provide
appropriate work equipment based on safety standards
 CHAPTER III
CONCLUSION

Foxconn in running the business, did a lot of violations of business ethics in its
employees. Some violations of business ethics do foxconn ie, remuneration is less
feasible. Additionally In China limits on working hours are 49 hours per week to 6
working days whereas most of the foxconn employees spend about 60 hours (10-11
hours per day) work per week including weekends, even they could only day off
every month and had to work for months without a day off when you're chasing
production targets.
Foxconn also apply management style in the style of military working system.
Workers at Foxconn works like a machine and it should work continuously for
more than 10-11 hours a day. Foxconn also apply inhuman punishment to the
workers who make mistakes or violate the rules of the plant, will receive damages
such as cleaning toilets and wage cuts.

In addition foxconn also doing ethics business violations on student

internships with excessively exploiting the students.

Reference
www.secom.hk (accessed on april 10, 2017 at 02.30 pm)

www.bbc.com (accessed on april 10, 2017 at 02.00 pm)

www.wikipedia.ac.id (accessed on april 10, 2017 at 04.00 pm)