MGT507 Assignment1 (3,000 words)

1.
The suicides case at Foxconn factory in China drew media attention and despite of the
fact 18 suicide is lower than the suicide rate among the general population in China, but the
deaths still have raised questions about working conditions at Foxconn. The firm has become an
object of criticism about the working conditions and Foxconn after-suicide response were
heedfully observed by news media, its employees, and several of its customer.
However, the change to the situation at Foxconn is not easy. The challenge in bringing
about change to the situation at Foxconn is listed as following
1. It is the challenge for Foxconn in bringing about change while maintain their core
competitive advantage, assembly efficiency and lower-cost expertise.
Foxconn technology group is the worlds largest contract electronics manufacturer, who
have the prominent point in providing the lowest total cost of electronics products for their
clients. Factor typical to this business are high volume and thin margins. Thus, Foxconn heart is
optimizing the level of production and controlling the cost.
In order to optimize the level of production, workers at Foxconn are made to work like
machines. They are obligate to wake at 6:40 a.m. and work 12-hour or more than that - if
workers cannot meet the daily quota. Talking, standing up, stretching, drinking water at the
station were forbidden (Kamenetz and Kamenetz, 2013). They cannot stop for a second. I think
we are even faster than machines, a worker at the Longhua campus pointed out (Students &
Scholars Against Corporate Misbehaviour, 2016). In addition, the employees had to adopt a
particular working posture for maximum efficiency. Who cannot do or made a mistake will be
punished by being made to stand at attention for hours or endure a public humiliation of
reading statements of self-criticism. All of these is to maximize productivity.
To control the cost, Foxconn did not invest any capital in their employees. Since the first
day at Foxconn, the new employees get very short onboarding program, no tour of physical
facilities, and were put to work immediately with little genera company information because
Foxconn want to safe its cost and time. Hence, some of new employees do not even know what
each building was, nor the meaning of the English acronyms that could be seen written
everywhere, such as FIH [Foxconn International Holdings] and the JIT [just-in-time] Hub
(Hefferman, 2013). They also not invest any money to improving well-being of their employees.
The living condition at Foxconn is very poor. For example, one employee talked about the
dormitory that the first night sleeping at Foxconn dormitory is a nightmare, the whole
dormitory smells like garbage when I walked in, outside every room was full piled up with
uncleared trash, when I opened my wardrobe, lots of cockroaches crawl out from inside and
the bed sheets that are being distributed to every new worker are full of dirt and ashes, and the
hospital in the factory, there is only one doctor on shift handling 4-5 patients at the same time
(Wrenn, 2012). Not only the physical look, but the dorm management system is very poor also.
No grouping of the employees who speak the same language or do the same shifts make it hard
to develop personal relationships. This mean that employees do not have anybody to talk to

and consequently easily lead to suicide.

However, investment in improving employees well-being at Foxconn requires lots of
money since they have huge labor force, with some 1.4 million workers in China alone (Perlin,
2013). And because of Foxconns ultimate corporate principle is profit maximization, so their
increased investment means they have to keep pressing down its labor cost to maintain its
competitiveness in the industry. Thus, it is the challenge for leader of this huge company in
improving work environment and employees well-being while maintain their core competitive
advantage, assembly efficiency and lower-cost expertise.
2. It is the challenge for Foxconn in bringing about change while its leadership style is
still the same as well as lack of ability to solve the root cause of suicide problem.
It is obviously clear that Terry Gou use autocratic leadership style in management at Foxconn,
in which leader dictates policies and procedures, decides what goals are to be achieved, and
directs and controls all activities without any meaningful participation by the subordinated
(Lussier and Achua, 2012). At Foxconn, technicians from the engineering department time
every task and, if workers can meet the quotas, the targets are increased (Hefferman, 2013).
Employees do not have right to participate in set their own daily production quotas and werent
allowed to rest until they met their quota. One current line manager told that there is constant
pressure among all workers. We must meet the quota every day at the maximum quality said
the man There are several layers of management with the pressure coming from above
(Wrenn, 2012). In the book From the wolfs burrow into the tigers den written by Qing Tong,
a former manager at Foxconn said that all traces of individual personality among workers must
be erased to achieve Terry Gou's mantra time is money and efficiency is life (Malone, 2013).
Additionally, quotations from Foxconn's CEO, Terry Gou, adorn the walls: "Growth, thy name is
suffering," and "Execution is the integration of speed, accuracy and precision." Then there was,
"Achieve goals or the sun will no longer shine (Hefferman, 2013)." All of these indicate that
Terry Gou is the autocratic leader, who care only his wanted result - does not care about how
they feel, how much pressure they get, and as result, they committed suicide.
The style of leader is not only a problem for Foxconn, the problem-solving skill of leader
is also Foxconn problem. Considering from the case study, Foxconn only fix the facing problem the symptoms. They do not resolve its real root causes. For example, in stead of fix at the root
cause, Foxconn forced employees to sign no suicide pact and installed anti-suicide net. This
increased employees pungent to Foxconn and raise the questions about Terry Gous leadership
competencies. Thus, it is the challenge for Foxconn in bringing about change while its
leadership style is still the same as well as lack of ability to solve the root cause of suicide
problem.

2.
Business operate in a dynamic world where the only thing for certain is that things will
change. In order to properly make the change at Foxconn, it needs to understand the external
environmental forces pushing for reform and driving the need for change at Foxconn.
1. Increase of customer awareness about the conditions in which products were
produced.
Consumer nowadays are more aware of the conditions in which products were
produced. They also want information about how, and where, their products were made
because they are more concerned with working condition and well-being of the workers
(Briner, 2000). The research indicates a growing consumer demand for information about how
and where goods are produced. A study by professors at the Massachusetts Institute of
Technology and Harvard showed that some consumers even those who were focused on
discount prices were not only willing to pay more, but actually did pay more, for product that
carried signs about fair-labor practices (Epstein and Rejc, 2014). If the product comes from
exploiting the workers, such as forcing them to overtime or underpaying them, they tend to
deny it significantly (Chen, 2014). For Foxconn case study, if Foxconn ignore the suicide cases
scandal and consumers get the information from the mass media or NGOs, that at present tend
to construct the sweatshop issue in China by the perspective of developed countrys consumer,
about the poor working and living condition, it may erode client trust and significantly decrease
public image. Consequently, client may stop or reduce their orders or trade down to Foxconn
competitors better imaged factory which may have an adverse impact on its business and
financial results. Decrease in number of clients and/or average value per order will negatively
impact Foxconns financial performance as reduced revenue, which creates downward pressure
on margins and also negatively impacts net revenues, operating income and earnings per share.
Thus in order to survive in the business and keep the same financial performance as it was,
Terry Gou should bring about change to the situation at Foxconn.
2. Increase of migrant labor workers in China because of lack of urban labor workers.
Increase of using migrant workers in factory not only happened at Foxconn, but it also
happened at all factories in China, especially factories in manufacturing regions. According to
the Chinese governments, own statistics, migrant workers have increased to more than 250
million just over 60 million in the last 20 years. Many non-government organizations place this
number at a more realistic 350 to 400 million (Mahoney, 2015). Shortage of labor and raising
labor cost in urban area drives the manufacturing firms, like Foxconn, to recruit the labor force
from rural areas. And because most of them are long-way from home, young, no high educated,
and no working experience, so company have to treated them different from urban labors for
example: pre-departure orientation program; close monitoring; relationship-building activity;
and recreation facilities. Foxconn management team realized this issue, that correlates with the
series of suicides, after suicide cases already happened. Terry Cheng, an executive vice
president said that Providing employees with basic necessities including a safe and convenient

place to live at the work site might have been sufficient in the past, but this arrangement no
longer satisfies the needs of the young migrant workers of today (Peng and Peng, 2014). After
this turnabout statement, Foxconn extend new high-rise dormitories, restaurants, banks,
recreational facilities and a hospital in Shenzhen campus (Barboza, 2010) in order to improve
the living condition of migrant workers.
However, if Foxconn neglect the increased migrant workers, the suicide situation may
occur again. Consequently, Foxconn will face difficulties in recruiting new employees. And in
the worst case that Foxconn is unable to recruit employees sufficiently to maintain its current
business and support its projected growth, Foxconns business and financial performance may
be adversely affected.

3.
After analyzing both internal and external condition of Foxconn, you should translate to
do something. Thus, in order to make the change from root cause and be the fundamental for
the afterward, Terry Gou and leadership team should start with changing the organization
culture from task-oriented culture that focus on a task to people-oriented culture that more
prime focus on the interaction with other people. Applying people-oriented culture at Foxconn
could not only drive away the suicide case, but also retrieve the image of Foxconn from the
company that only focuses on the tasks result and does not take an interest in people in its
organization to be the company that care for their employees in all levels.
To drive cultural change, I have decided to use John Kotlers 8-step change model for
implementing organizational change at Foxconn because this model is uncomplicated and easy
to follow. However, duo to the fact that I do not have deep information used in making the
precious decision and planning, hence I will explain my change plan in the non-enumerate and
non-pragmatic way. My change plan that suggests to Terry Gou and the leadership to drive
cultural changes shows as following.
Cultural change goal: People-oriented culture
1. Sense of urgency
Creating a sense of urgency is about helping people see the need for change, to deal
with an issue that is holding company back. Without urgency Foxconn risk becoming
complacent and losing leading status and reputation as the world's largest electronics
contractor manufacturer by revenue (Hr.uq.edu.au, 2013).
Terry Gou and leadership team should set up board meeting presentation and town hall
to create sense of urgency. This is about opening up an honest and convincing dialogue about
the opportunities and issues that are relevant to the situation at Foxconn. And to make people
be able to see, feel and then embrace the need for change, the leadership teams have to speak
with their employee both logical and emotional. To speak to logic, they have to gather
information on current situation and expected consequent. To speak to peoples emotions,
they should use demonstrations or stories to ensure people see the problems. Furthermore,
developing an understanding of the reason for change in the first stages can provide a sound
base for action in other stages.
Once leadership teams have created the urgency for change. Foxconn need to build a team to
guide forward on change.
2. Guiding coalition
Building a power coalition is about making sure you have the right group of change
leaders to help achieving the outcomes you need from the change initiative. Without a team
with the expertise to assist, the change effort can stop or cause to stop making progress.
In this step in the change process Foxconn should form a culture change committee

that involve as many people as they can, at many levels and across many parts of the
organization, to enable them to completely understand the suicide issues that company is
dealing with and help bring them a better understanding of plausible ways forward.
The building team compose of relevance people from a variety of sources, job role,
status, expertise, and representation from different levels of the organization affected by the
change or who can help with the change (Hr.uq.edu.au, 2013).
1.
Terry Gou
2.
Human Resource manager
3.
Employee Relations units
4.
Finance manager
5.
Operation management manager
6.
Information system manager
7.
Line manager s representatives
8.
Labor levels representatives
Moreover, the guiding coalition is involved in many processes of change implementation
1.
Setting the vision for the change
2.
Communicating for buy-in
3.
Getting rid of the change obstacles
4.
Creating short-term achievements
5.
Carrying on multiple change projects
6.
Integrating new approaches into the organization culture
After having build coalition, Foxconn can use the received input to create right vision and
strategy for the change
3. Vision and strategy
Once the need for change and building coalition has been marked, the change leaders
need to explain the purpose of the change - what are we trying to achieve? If the vision is not
distinctly described, the change effort can come to be confusing and take the company in the
wrong direction.
In Third Step, get the vision and strategy, the building coalition has two important task.
1.Creating a clear vision that show illustrate a picture of where we want to go
2.Developing a strategy to go there
The example vision: We will embrace the employees participation as a way of doing
business, and because of our commitment and integrity, we love coming to work, ready to
meet the needs of our company, our clients, and each other. After setting the vision, the
guiding coalition need to detail the change strategy plan. The change strategy plan consists of
(Hr.uq.edu.au, 2013):
1. The content of the change- strategy, structure, systems, technology, business
processes, products, services, or culture
2. The people aspect of the change- peoples emotional reactions to the change changes
in mindset, behavior, and culture that your future state requires, how to engage your
people in design and implementation, and how to ensure commitment and capacity to

change
3. The process component of the change- a high-level roadmap to get you from where
you are today to where you need to be to achieve results from your change (Anderson &
Anderson from the Change Leaders Network on Building Your Change Strategy: How to
Ensure that Your Effort Is on the Right Track,).
Having create vision and strategy, then next step is to communicate the vision and strategy.
4. Communicate
Although you have been communicating continuously already since the first step, but
people expect to get more detail about the need for change, vision and strategy.
In this step, the guiding team have to analyze changes stakeholder by listing all
stakeholders and predict their response to the change, then develop appropriate message or
forum that match each group of different stakeholder.
As you communicate with people about the vision and strategy you will gain invaluable
information about the change, opportunities and potential pitfalls. As the change vision get
more buy-on, company can use this input to developing a detailed implementation plan.
Then more from communication and planning to fifth step
5. Empower employees
In order to implement change that will last, it is important that people across the
company are really encouraged to take ownership for the propose change and make changes in
their own areas because people will tend to make less barrier to change when they own the
change (Fao.org, 2015). The guiding coalition pay an important role in continuing to empower
employees actions and eliminate obstacles.
In fifth step, the guiding team should build a program that encourage and rewards the
employees that take part in helping implement the change and provide employees with
opportunities to impact change processes. For example, rewarding employees that attend the
meeting of changes goals and contribute the good ideas. And because of in this step you may
face many obstacles to work through and overcome such as current system or policy
constraints, so the member in building coalition such as HR, Finance, IT can assist the change
leaders to remove obstacles based in systems, practices, regulations and policies.
Action is obvious in the organization during this step, so move up to sixth step.
6. Short-term wins
Without visible proof that the change effort is making progress, impacted individuals
and groups throughout the company can be critical that the initiative is absorbing too many
resources and sceptics become increasingly difficult to convince (Hr.uq.edu.au, 2013).
In this step, the guiding coalitions with key stakeholders need to determine what is the

most effective short-term wins to promote and celebrate. Celebrating short-term results, both
positive and negative, will provide useful information that help shaping the detail in the change
plan.
Though you achieved and celebrated short term wins, you need to continue to product more
change.
7. Product more change
Leadership is important in seventh step. In stead of declaring victory and slackening the
the change effort, the capable transformational leaders will continue driving deeper change.
They will launch more and more projects to drive the change deeper in to the organization
(Cfma.org, 2013).
The change process isnt complete until it became organization culture
8. Culture
The ultimate goal for creating major change is to make the change permanent. The peopleorient must be embed in the culture of Foxconn and become the way we do thing around
here.

4.
Measurement of organization change success should be considered during the planning
of change and before any change action is undertaken (Rick, 2014). Measurement is the action
that uses in controlling and eventually improving the change process. If you cant measure
something, you cant understand it. If you cant understand it, you cant control it. If you cant
control it, you cant improve it (Spitzer, 2007). The effective change metrics should be able to
motivate employees to perform desired new activities and provide guidance toward goal
achievement and alert managers to the need for mid-course correction if the change effort
strays from its intended path (http://www.smeal.psu.edu/cmtoc/cmtoc/research/nistcm.pdf,).
For the Foxconn case, not only a reduction in attempted suicide can indicate the success
of organization change. There are many other metrics that can use in indicating the success of
change at Foxconn, they show as below:
Change goal: To change organizational culture from Task-oriented culture to People-oriented
culture.
Metric used in measure the success of organization change at Foxconn (apart from a
reduction in attempted suicide):
1. 100 Hundred Percent of employees participate in setting their daily production quota,
working schedule, working condition and other issues that significantly related to
their job.
The first metric that I shall use in measuring the success of organization change at Foxconn is
the employee participation. Nevertheless, the employee participation can be measure in many
occasions for example, participation in setting their daily production quota, working schedule,
and working condition. Providing reasonable opportunities for employees to participate in
making-decision process that directly related to them can give the significant results to the
organization. For example: giving production-floors employees the opportunity to setting the
daily production quotas make the employees feel more involved and committed to the
organization tasks; their self-esteem, job satisfaction, and cooperation with the higher
authorities improve; and their stress that substantially carry off the attempt suicide also
reduce. Not only labor-level employees get the benefit from these, but the management level
also gain the benefit in return. Employee participation help reduce the working hierarchy, it
establishes better communication, as all employees mutually discuss all problems.
Measurement by employee participation can make the high management- level of Foxconn
change their management style from dictating policies and procedures, deciding what goals are
to be achieved, and directing and controlling all activities without any meaningful participation
by the subordinated to participate leadership in which they offer employees the opportunity to
influence decision-making, accepting feedback and input from each individual. These lead to
the heart of people-oriented culture that focus on the building the relation with employee
fairly, supportively, and respect the individual right (Skills2lead.com, n.d.).
In order to achieve in accordance with the target that settled at 100 Percent of employees

involve in setting their daily production quota, working schedule, and working. The guiding
team should help the organization remove the obstacle that block the employee participation
such current system or policy constraints and also provide the needed infrastructures and
resources such as new information system and financing.
2. Increase of employees who feel appreciated for the work they do, and they are a part
of a companys success.
The second metric that I shall use in measuring the success of organization change at
Foxconn is the employee satisfaction for the work they do and feel that they are a part of a
companys success. The reason that I choose this metric because there is many company that
the employee participation is only company attempt that never really happened. Employees
feel that they are not a part of company, not appreciated for the work they do, and eventually
full of stress because they hate coming to work.
This metric can make all Foxconns employee, both labor-level and management-level,
cooperate together to help building true participation and eventually become people-oriented
culture.
In order to achieve the target in increasing employees who feel appreciated for the work
they do and theyre a part of a companys success, the change leader must show the employee
how important of their job and participation, and how they are important to companys success