Critical Evaluate “Stress” & “Ethics” of Foxconn
A string of suicides occurred at Taiwanese-owned Foxconn in China in recent years has drawn great media attention (BBC, 2010). 20 Chinese universities worked as a team to pursue the story behind the Foxconn which they described as “labour camp” (Chan, 2013). As the major manufacturer of Apple, Foxconn should undertake the due obligations but Apple also cannot avoid its responsibility. A case study “Apple’s efforts fail to end gruelling conditions at Foxconn factories” is presented to scrutinize and evaluate the causes that result in the industrial injuries.

Students and Scholars against Corporate Misbehavior (SACOM) suggests that overtime working, poor leadership and absence of working relationship drive the assembly line employees to commit suicide (Heffernan, 2013). However, The Guardian （media source） highlights that the working conditions at Foxconn factories is the main problem. Therefore, “ethics” and “stress” are chosen as the entry points to find the “apple of discord”.

Initially, ethics will be introduced for understanding the moral principles and its effectiveness. Resnik (2011) describes the ethics as the “norms for conduct that distinguish between acceptable and unacceptable behaviour”. In business environment, Hanson (2010) believes "business ethics is the study of the standards of business behaviour which promote human welfare and the good". However, when two moral principles have conflicts, ethical dilemmas will exist. For Foxconn, the ethical dilemma is whether to place the firm’s benefits ahead of employees’ personal well-being (Hinks, 2012).

Referring to Josephson (2012), there are 12 ethical principles of business executives to build criteria. As Abraham Lincoln describes “character as the tree and reputation as the shadow” (Josephsoninstitute.org, 2010), it is vital to analyze the conditions at Foxconn by 12 ethical principles listed below: 1. HONESTY 2. INTEGRITY 3. PROMISE-KEEPING 4. LOYALTY 5. FAIRNESS 6. CARING – CONCERN FOR OTHERS 7. RESPECT FOR OTHERS 8. LAW ABIDING 9. COMMITMENT TO EXCELLENCE 10. LEADERSHIP 11. REPUTATION AND MORALE 12. ACCOUNTABILITY

In relation to the Foxconn factories, the first will be discussed is that “punishments remain a key management tool” (Appendix 1). Appropriate and legitimate punishment can be effective to prevent people’s undesirable performance such as absenteeism and other substandard behaviors (Milbourn, 1996). Nevertheless, the informal punishment which lacks ethical values may break the ethical principles. According to the case study, Sacom claims that the employees of Foxconn are punished to clean toilets, sweep lawns and write “confession letters”. Besides, Chen Meifang, who takes a day off without permission, is asked to “move 3000 boxes a day for 10 days which makes her suffer from the backache and unable to sleep” (Appendix 1). Referring to Mibourn (1996), punishment will result in fear, anxiety, psychological tension and misbehavior. Foxconn doesn’t consider the mental and physical consequences of its action on staffs which is a breach of caring and benevolent (Principle 6). Simultaneously, the other punishment such as exposing “confession letters” to public is unrespectful to human dignity and personal privacy (Principle 7). However, the intention of Foxconn is to regulate behaviour and give warnings. Therefore, the punishment for Chen Meifang is to remind her not to take the liberty to go out and is as a warning to others. Nevertheless, Hyles (1994) indicates that punishment makes up for wrong while discipline avoids from wrong. Foxconn utilizes punishment to correct workers’ behaviour after it happens, which is high-cost and less effective. Consequently, the ethical usage of discipline is recommended instead of the punishment to prevent doing things wrong.

The next phenomenon will be argued is overtime work at Foxconn in spite of Apple’s 60-hour limit. “Long hours are a badge of honor in entrepreneurship game” because it can make big margin of profit in limited time (Stillman, 2013). Foxconn takes “advantages” of long hours to make more profit regardless of the business ethics. On the basis of Sacom’s findings, Foxconn’s employees work up to 80 hours in April and overtime even rises to 100 hour a month during the Christmas days (Appendix 1). Hence, “promise-keeping” (Principle 3) and “law abiding” (Principle 8) should be considered for the overtime business behavior. Apple announces that “its suppliers achieved 95% compliance with the 60-hour working week specified in its code, up from 91% from March” (Appendix 1). However, overtime still exists in Foxconn and there is no indication of decreasing the working hours for employees. Apple fails to keep the promise of reducing overtime hours below 60 hours which may lose trust from customers. Moreover, China Organization (2009) states that Labor Law of China regulates “The State shall practice a working hour system wherein laborers shall work for no more than eight hours a day and no more than 44 hours a week on the average” while the working hours in Foxconn is far beyond the standard hours. However, there is no exact trade-off between ethics and profit (Caulkin, 2003). Meanwhile, business ethics will also bring more profit for the company since ethics will contribute to business reputation and customer loyalty which is very important to business sustainability. Therefore, for long-term development, Foxconn should balance the relationship between ethics and profit efficiently.

According to Zeiger (2000), a lack of ethics will lead to four effects on business environment which are legal issue, employee performance, employee relations and company credibility. For Foxconn, the main issues it faces would be the employee performance and company credibility. The poor ethical working environment will reduce employees’ morale as well as increase careless errors and even retaliation. With refer to 2009 National Business Ethics Survey, the more the supervisors behave unethically, the greater percentage of employees retaliate (ERC, 2009). Interlinking with Foxconn, the 728 injuries up to May 2012 and 14 deaths of suicides in the year to November 2010 can strongly prove the negative effects of the unethical environment. Simultaneously, Foxconn may lose business credibility since now it is known for “military-style” and unethical working environment. According to Sacom (Appendix 1), the unethical mistreatment has already influenced Foxconn’s customers including Amazon, HP, Dell and Nokia. To conclude, Foxconn conducts the consequentialist theories which are based on the result without considering whether the act is good or not (BBC, 2013).

As Hopkins (2002) states “CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner”, Foxconn should address concern with the CSR and sustainability for the environment and prospects of the firm. Carroll’s CSR Pyramid (Figure 1) portrays four types of responsibilities. As one of the fundamental responsibilities of CSR, Carroll (1991) expresses that “the ethical responsibility consists of what is generally expected by society over and above economic and legal expectations.” Foxconn breaks the Labour Law of China for overtime work which even doesn’t achieve the legal responsibility so it is only at the base of the pyramid--economic responsibility. Therefore, in concern of the CSR, Foxconn has to practice the rest layers of responsibility with the ultimate goal of reaching the top.

Figure 1

The poor ethical working environment brings us to query whether the Foxconn staffs are under pressure at working period. Work-related stress is labelled as a "global epidemic" by The United Nations' International Labour Organization (Maxon, 1999) so it is vital to analyse the “gruelling condition” in the perspective of “occupational stress”. Cooper (1994) describes that “stress results from a misfit between individuals and their environment”. Hence, it is physical and mental “person-environment fit” that matters and the causes of stress should be evaluated necessarily. Greenberg (2013) argues that there are 5 determinants of stress which are occupational demands, conflicts between work and nonwork, stress from uncertainty, overload and responsibility for others. In terms of Foxconn, the main causes might be the occupational demands and overload.

Figure 2

The occupational demands have several categories which are shown in the Figure 2. The first will be discussed of occupational demands is the punishment as an unethical performance of Foxconn. The punishment such as cleaning toilets and writing “confession letters” can be regarded as violations of human rights and dignity. Except for the mental punishment, the physical punishment, for example, “moving 3000 boxes a day for 10 days” can also relate to “working in the unpleasant physical conditions”. Those occupational demands will make the staff work under stress and meanwhile, the stress will also react upon the punishment. Vinkersa (2013) discovers that stress will lead to altruistic punishment. It can be supported by the phenomenon in Foxconn that when the line managers work overtime daily without payment and are scolded by their superiors, it will cause them to “unconsciously vent their anger on the production workers” (Appendix 1). Consequently, with stress and punishment interacting with each other, a vicious circle will therefore be created, leading to an increasingly severe situation of ethics and stress.

Additionally, the living and working conditions in Foxconn will also increase workers’ stress. The World Health Organization (2013) highlights that the absence of a healthy working and living condition will pressure on employees. In Foxconn, 20 or 30 workers share three-bedroom flats stocked with bunk beds in the dormitories and they are only allowed to sit a third of the seat for work. The cramped conditions will make people feel depressive and “keeping in one position in a cramped condition can cause blood clots, which can travel to the heart or the brain causing a heart attack or a stroke” (Batra, 2000). Those psychic and physiological reactions will make people impatient and finally lead to stress. Simultaneously, the forbidden usage of “power-hungry electrical items such as kettles or laptops” cuts accessible way to the convenience and entertainment. Hence, the inconvenience will make the overworked staff more dysphoric and a lack of entertainment limits the way for staff to release their stress.

In accordance with The America Institute of Stress (Figure 3), workload of 46% comes to the first main causes of stress so it is important to address great attention of overload in Foxconn factories. Kirch (2008) believes the work overload occurring when the demands of work surpass people’s ability to handle them in the limited time. Rahim (2001) classifies “role overload” into quantitative overload and qualitative overload. Quantitative overload is defined as excessive work to be dealt in a time period while qualitative overload refers to work that is too difficult to be finished on time (Cooper, 2013). For Foxconn, assembly staff’s job design is low skilled so the overtime workload for them can be regarded as quantitative overload. Specifically, the production-line employees work overtime of 78.5 hours for April and the number even reaches to 80 hours when the new iPad is released. Overtime work has been considered as the main cause that contributes to stress of Foxconn staff. It can be supported by the Figure 4 which draws the relationship between the unadjusted risk ratio for stress response and the number of hours of overtime per month (Sato, Miyake & Thériault, 2009). The Figure 4 illustrates that the risk ratio increases when there are 40-49 overtime hours per month. Additionally, the risk ration is at peak when the overtime is 100 hours per month. For Foxconn, the assembly workers overtime work for approximately 70-80 hours per month which should be significantly evaluated according to Figure4.

Figure 3

Figure 4 (Society of Occupational Medicine, 2013)

Meanwhile, with comparison to Foxconn‘s Brazilian factory, it pays twice as the salary of Chinese workers and receives 30 days’ leave annually while Chinese Foxconn staff only received 5 days (Appendix 1). As the Metro New reports, people who are under stress should have holidays every 62 days otherwise they will burnout (Graham, 2011). Burnout is “a syndrome of emotional, exhaustion, depersonalization and reduced personal accomplishment that can occur among individuals who do ‘people work’ of some kind” (Maslach and Jackson, 1986). Having holidays every 62 days means having holidays at least 5 times annually while Foxconn’s 5 days off is far less than the 5 holidays a year. Therefore, the long time working with few holidays aggravates the stress of the Foxconn workers.

Nevertheless, not all stress has negative effects on human-beings. The Yerkes–Dodson law (Figure 5) should be introduced to critical analyse the impacts of different stress levels on human performance (Hogan, 2013). The curve illustrates that as the stress level increases, human performance goes up first and reaches the optimal level and finally goes down. Therefore, the stress before medium level which is defined as eustress can contribute to better performance and vice versa (Scott, 2012). Linking to Foxconn workers, the overtime work has pushes them into the stages of overload or even burn-out, which decreases their working performance. Furthermore, the low performance will not maximize the productive efficiency. It is because that maximum productive efficiency occurs at a minimum total cost and minimum waste of resources usage (Anderton, 2008). As a key resource of production, the labour should perform at the optimum level to contribute to productive efficiency otherwise it is also a kind of resources wastage. Foxconn wants to improve the amount of production in a time period by work overload but meanwhile it also increases the costs of production since the workers are too stressful to perform productively.

Figure 5 (Schwartz, 2012)

Consequently, it is recommended that Foxconn should evaluate the stress level for workers in different hierarchies to provide the optimal stress level for maximum productive efficiency. Besides, the stress management team should be established in Foxconn. To illustrate, workers are different from each other and it is complex for Foxconn to set different stress level according to each worker’ s characteristics, so workers will react differently to the same stress level even in the same hierarchy. Therefore, it is necessary to build stress management team to identify and slightly adjust stress level for different people in response to the turbulent environment (Helpguide.org, 2013).

To summarize, several further conclusions are drawn through analysis the case study within the ethics and stress aspects. Referring to a quote from Debby Chan Sze Wan “the findings demonstrate that Apple and Foxconn have not turned over a new leaf” (Appendix 1), it illustrates that Apple and Foxconn don’t resolve the problems radically although Apple claims that it has tried to improve the conditions for Foxconn. Superficially, it seems that Foxconn has the main responsibility to improve the gruelling condition for its workers. However, the origin of the problem results from Apple. Ross Eisenbrey, the Vice President of the Economic Policy Institute, indicates that “Apple is certainly to blame because Apple is in control of the situation” (Johnson, 2012). It implies that Apple has the power to decide the capacity and release time for its product so what the assembly factories can do is to finish the products before delivery time. Therefore, Apple should also be responsible due to the large given capacity of product within limited time. Beside, “Comparison of Labour Rights and Workplace Conditions at Foxcom” (Appendix 2) indicates the various differences of Foxconn factories in China and Brazil. Thus, the culture issue should also be considered further because of the diverse national situations.

Reference
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Appendix 1
Apple's efforts fail to end gruelling conditions at Foxconn factories
Abuses continue at electronics assembly firm with staff working up to 80 hours' overtime a month, says Hong Kong rights group * The Guardian, Wednesday 30 May 2012 20.17 BST

A Foxconn factory in Shenzhen. The workers are only allowed to sit down if they perch on the edge of the seat to keep them 'nimble'. Photograph: Imaginechina/Corbis
Gruelling workloads, humiliating punishments and battery-farm living conditions remain routine for workers assembling Apple's luxury electronics, according to one of the most detailed reports yet on life inside China's Foxconn factories.
The researchers claim that intimidation, exhaustion and labour rights violations "remain the norm" for the hundreds of thousands of Chinese iPhone workers, despite Apple redoubling its efforts to improve conditions.
Interviews with 170 workers and supervisors at Foxconn factories in the cities of Shenzhen and Zhengzhou from March to May this year found that punishments remain a key management tool.
The report, by the Hong Kong workers' rights group Students and Scholars Against Corporate Misbehaviour (Sacom), says workers at the world's 10th largest employer have been told to clean toilets, sweep lawns and write "confession letters", which are then pinned up on noticeboards or read out to colleagues.
Living conditions in Foxconn campus dormitories remain cramped, with 20 or 30 workers sharing three-bedroom flats, sleeping eight to a room in bunkbeds.
They are forbidden to use power-hungry electrical items such as kettles or laptops on pain of confiscation, says Sacom, which published the study to coincide with Foxconn's annual general meeting in Hong Kong on Thursday.
Where most assembly staff were previously forced to stand, stools have now been introduced for some workers. However, they are under instructions to sit on only a third of the seat, so that they remain "nimble" enough to do the work.
Staff reported their mistrust of a counselling hotline introduced after a spate of Foxconn suicides. One Guanlan factory worker who rang after conflict with his supervisor was advised to resign if he was unhappy. Another, who has since left Foxconn, rang to complain about unpaid overtime and the hotline diverted the complaint back to his irate supervisor.
There were 728 industrial injuries at Foxconn factories in Shenzhen in the year to May 2012, according the Shenzhen regional public register. This is a small portion of a workforce estimated at 500,000 in the city, but Sacom believes injuries are under-reported: "The management simply negotiate with the injured workers for a settlement. According to the respondents, cases of industrial injuries have an impact on the annual bonus received by middle management. Therefore, the middle management are very reluctant to report all the cases."
Foxconn did not respond to requests for comment.
Apple says it has made improving conditions at its factories a priority. An independent audit by the not-for-profit Fair Labor Association at the end of March, which set out a roadmap for improving conditions, insisted on a ceiling of 60 hours a month for overtime. Foxconn has gone a step further by promising a ceiling of 36 hours by next summer, in accordance with Chinese labour law.
Interviewed this week, Apple's chief executive, Tim Cook, said the company was addressing the long hours culture. "We want everyone to know what we are doing, and we hope that people copy. We've put a ton of effort into taking overtime down."
Apple said in April that its suppliers achieved 95% compliance with the 60-hour working week specified in its code, up from 91% for March. But Sacom's findings fly in the face of Apple's figures. Foxconn employees interviewed in April were still working up to 80 hours of overtime a month at Longhua. A payslip from the plant showed overtime at 78.5 hours for April.
In the runup to the release of the new iPad on 16 March this year, monthly overtime work for Apple production-line workers in Longhua was 80 hours a month, it was claimed.
Line managers work unpaid overtime daily, often up to four or five hours a day. About 10% of interviewees were supervisors or assistant supervisors. They claimed their administrative work was unpaid, and that shifts were usually followed by unpaid work meetings, at which frontline managers would be scolded by their superiors, causing them to "unconsciously vent their anger on the production workers".
The mistreatment is not confined to Apple workers, but affects those making products for other western companies including Amazon, Hewlett-Packard, Dell and Nokia, according to Sacom.
Chen Meifang, who like all interviewees used a pseudonym to protect her against retaliation by her employer, is a "tiny" female worker on the Kindle production line at the Longhua campus. She was denied a request to take leave on a Saturday. When she took the day off anyway, she claims her supervisor asked her to move 3,000 boxes a day for 10 days as punishment. On the first day, she suffered from backache and was unable to sleep.
An Apple spokeswoman declined to comment other than referring to an earlier statement: "We care about every worker in our worldwide supply chain. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made. Our suppliers must live up to these requirements if they want to keep doing business with Apple."
Sacom, founded five years ago to campaign for better conditions in factories making toys for Disney, is demanding the formation of genuine trade unions within Foxconn; a living wage for Chinese workers, whom it says are paid half the salary of workers in Foxconn's Brazilian factory, and receive five as opposed to 30 days' annual leave; and compensation for victims of labour rights abuses.
"The findings demonstrate that Apple and Foxconn have not turned over a new leaf," said a Sacom officer, Debby Chan Sze Wan.
A worker's tale
Liu Jingjing, 20, (not her real name) started at Foxconn's Zhengzhou factory six months ago. The work on an iPhone production line is demanding: at first Liu found her fingers and forearms ached every day. After deductions for accommodation and food, she earns just £90 some months. Late last year, as Christmas sales of the latest Apple phone were booming, she says overtime rose, with employees asked to work up to 100 hours a month – despite Apple's 60-hour limit.
She is one of those fortunate enough to be able to sit down on a shopfloor where staff usually stand. However, she says employees are only allowed to perch on a third of the seat – to keep them "nimble". Liu broke the rules. But because she did not sit in a standardised way she was punished by being asked to write a "confession letter". Recently, when she complained about a cut in overtime pay, her boss told her: "If you do not want to work here, you can get out."

Appendix 2