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Copy of FoxConn

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Eric Tan

on 5 November 2014

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Transcript of Copy of FoxConn

Military-like style
Inefficient actions to the production lines are regulated
In 2010 the company has come under scrutiny by the media
Negligence to employee psychological
welfare and harsh environmental culture
Psychological stress to employees
-> multiple suicides in 2010.

Case Study:

A leading Taiwanese electronic
manufacturing company
Major clients such as Apple, Microsoft
Consists of nearly one million employees with 25 factories in China and various other countries.
Always meet the high volume demands of their clients.
What kind of resources creates Foxconn value?
Known for hiring massive low-cost and unskilled labour, Foxconn also employ high skilled workers & employee who specialized in its field.
Hires employees in Houston, Texas to provide high-end data servers for its clients.
Research and development are also being done in Foxconn.
Ranking 13th in the United States for number of patent awarded.
Enables Foxconn to boost production faster than anyone.
Makes the company intangible and highly valued by its many clients (Apple for example), despite being criticised by the media.
Was Foxconn responsible for a series of worker suicides?
Yes, with direct responsibility.
Firm must constantly monitor the business landscape and adapt to it accordingly.
Terrible working condition (24ppl/room).
Lack of morality: exploiting labour over improving worker welfare.
11-13 working hours with possible lunch break cancel
1) From the Resource-based view, what kind of resources creates Foxconn value?

2) From an institution-based view, was Foxconn responsible for a series of worker suicides?

3) Gou recently suggested that the government - rather than firms such as Foxconn --- should assume the social responsibility for employees. Do you agree or disagree?
What kind of resources creates Foxconn value?
Undeniably one of the most important company in the electronic manufacturing industry.
Credibility and trustworthiness.
Dares to invest in billion dollars equipment (HP)
Provide specialized materials (Iphone 4)
High level of accumulated knowledge
Willing to compromise net earnings to
gain the trust from clients -> future orders.

Was Foxconn responsible for a series of worker suicides?
Military-style of management which is too harsh
Days off are rare & surrounding areas are polluted
Employees often exceed working hours but are paid with low salary
High work effort + low pay + short resting time + unpleasant environment -> psychological stress -> series of suicides.

Government rather than Foxconn should assume the social responsibility for employees?
Strongly disagree, Foxconn should stop pushing the blame and take responsibility
Foxconn is not considering themselves as the root of the problem.
They are denying their social responsibility to the provincial government.
“Business should focus on business, and social responsibility should be the government’s responsibility” - Gou, Foxconn's CEO

Foxconn’s management team should take these matter into their own hands the government to work on the best possible solution.
The government should implement codes and regulation regarding company’s responsibility towards its employees .
If social responsibilities are taken care by companies like Foxconn, a better work environment for the employees will be created.
Thank you for listening
Financial: Able to invest big money when in need to buy equipment for iphone and HP production
Physical: Biggest factory mainly basis in China, Brazil. High-end server in USA
Technological: Has a total 88.200 patent applications, ranked number 13th in the United States for the number patented.
Organizational: Military-like tough culture

Tangible resources and capabilities
Intangible resources and capabilities
Human: Massive low-cost unskilled labour
Innovation: Have the ability to quickly produce new model of technologies, constantly possess the latest machine to produce new product
Reputational: • Trustworthy among its consumer such as Apple and HP
• Always keep the deadline and target achieved
• Bad reputation in its social and environmental report on CSR

• Big Capital
• Specialized and Expert Human Resources
• Years of Knowledge and Patent
• Massive human labor
• Goodwill

(R) Rare
• Equipment for producing the products
• Strong relationship with big clients
• The main company to mass-produce popular device (Ipad, Iphone)
• Years of Knowledge and technical know-how

What kind of resources creates Foxconn value?
Foxconn's VRIO Framework
What kind of resources creates Foxconn value?
(I) Imitability
• Hard to imitate thanks to years of accumulated experience and knowledge.
• Possesses many patents in product manufacturing
• Equipment for production tend to be specialized for a particular product.
• Vertical integration: all aspects of manufacturing is done in-house, hard to identify process

(O) Organitazional
• Well organized and well exploited Resources and Human Labour
• Effective strategic management process for worker efficiency
• Every resources are used to its max potential
• Max production are achieved through company military style culture while compromising the triple bottom line (Social and Environmental aspect)

What kind of resources creates Foxconn value?
Valuable: Yes
Rare: Yes
Costly to Imitate: Yes
Exploited by organization: Yes
Competitive implications : Sustained competitive advantages
Firm performance: Persistently above average

FoxConn's VRIO's framework conclusion
Foxconn has strong resources that creates their unique value, making them a leading electronics manufacturing company
Strong competitive advantages.
Failed to meet the social needs of their employees due to their tough work culture
Is to blame for multiple employee's suicide in 2010.
Attempted to push the suicide incident to the China government, showing poor responsibility from the CEO of Foxconn: Gou
Full transcript