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Ethics Analysis of Foxconn International

Ethics Analysis of Foxconn International

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Published by juststitch
Apparently, we need lessons on ethical thinking as this was the countless number of ethics essay we had to write throughout the three years in NBS.

This paper looks into the dealings of Foxconn International, a key manufacturer and supplier to Apple Inc. This paper was also part of the reason why we selected Apple Inc. for our strategic analysis paper.
Apparently, we need lessons on ethical thinking as this was the countless number of ethics essay we had to write throughout the three years in NBS.

This paper looks into the dealings of Foxconn International, a key manufacturer and supplier to Apple Inc. This paper was also part of the reason why we selected Apple Inc. for our strategic analysis paper.

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Published by: juststitch on Jun 15, 2011
Copyright:Attribution Non-commercial

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06/10/2013

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1 |Page 
NANYANG BUSINESS SCHOOLAB311 STRATEGIC MANAGEMENT
INDIVIDUAL ETHICAL REASONING ANALYSIS
Seminar Group 2Instructor:
A/P LAI SI TSUI-AUCH
Done by:
CHAN ZHE YING
Word Count:1,136
 
2 |Page 
A.
 
ETHICAL ISSUE(S) & DILEMMA
The Foxconn
suicides can be viewed from an ethical lens because China’s labour costs have been
kept low for years, while expectations kept increasing. Global companies are tapping on the low-wage labour market in China to keep costs low, but many fail to fully understand or accept themoral implications. These problems are complex because they result in benefits for some andharms for others, because the exercising of the rights of some usually results in denying the rightsof others.
1
 The main ethical issue from the Foxconn case would be: whether it is ethical for Mr. Terry Guo,to place the firm
’s benefits ahead of the personal well
-being of the employees. Being
the world’s
largest contract manufacturer of computers and electronics
2
 
 – 
serving huge companies such asApple, Dell, Sony and more, Foxconn may not be able to serve its clients if it is unable tomaintain its aggressive cost-management policies.However, Guo and the management of Hon Hai Precision have a moral obligation to addressthese issues and criticisms. The ethical dilemma (and decision) Guo faces is whether he should
 place the group’s interest of being the top supplier to most of the world’s electronic brands by
keeping wages low, ahead of the well-being of the factory workers.
1
Hosmer, L.T, 2009.
2
The China Post, 2010.
 
 
3 |Page 
B.
 
KEY STAKEHOLDERS AND JUSTIFICATIONS
The
factory workers
are one group of key stakeholders which Guo should consider in thedecision making process. The well-being and morale of the workers are clearly affected due to thelow wages and work environment. An troubling prospect is that workers may be motivated bymoney to commit suicide, as the employment contracts compensates RMB100,000 the families of anyone who dies on site. The amount is 50 times of the monthly pay of an average employee.
3
If this issue is not adequately addressed, more suicides could ensue.Guo must also consider the
shareholders
of Hon Hai and Foxconn. When news of the suicides
 broke, share price of Hon Hai fell as much as 5.1% in Taipei, while Foxconn’s
share priceexperienced an 8.5% drop on the Hang Seng Index.
4
Such negative publicity has possibly led to a
decrease in investor’s confidence in the company’s ability to handle the situation
, which resultedin a drop of the share prices.Finally, Guo should think about the
clients
which Foxconn serves. Foxconn is able to be thesupplier to major electronic companies is because it has managed to keep its costs low. If Guodecides to increase the wages and provides more facilities to the workers, Foxconn mayinadvertently be forced to pass on some of the increased costs to its clients, which may ultimatelyresult in Foxconn losing its clients to its competitors offering lower costs.
3
BBC News, 2010
4
Culpan, Tim and Lee, Mark, 2010
 

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