NatalieGross

ngross2@uw.edu
INFO312:EnterpriseRiskManagementwithProfessorAnnieSearle
UniversityofWashington
Autumn2015
HonHaiPrecisionIndustryandWorkerRights
Ascapitalismcontinuestodominatetrendsofglobalizationinthetwentyfirstcentury,
riskmanagementandworkerexploitationaretwocurrentyetcontrastingissuesenterprisesoften
havetodealwith.InRisk:AVeryShortIntroduction,FischhoffandKadvanywritedefining
riskisanexerciseinvaluefocusedthinking(2011,p.41).Moneyistheprimaryindicatorof
success.HarvardBusinessReviewsannualpublicationofglobaltopCEOsisanexampleof
this.80%oftherankingisbasedonmoneyandfinancialwork,leaving20%forenvironmental,
social,andgovernanceperformance(HarvardBusinessReviewStaff2015).
AsiassecondtopCEOisTerryGou,founderofHonHaiPrecisionIndustryCo.,Ltd.
(HonHai),alsoreferredtoasFoxconnTechnologyGroup(Foxconn)(TheChinaPost/ANN
2015).Themoneythinkingvaluesboomingeconomics,wheretheends(money)justifythe
means(everythingittooktomakethemoney,whetherablessingoracurse):butisthisjust?To
focusonmoralityistolookatthemeans:humanrights.ForthispaperIwilldefinethehuman
rightsperspectiveasonewhichvaluesallhumanlivesofequalvalueregardlessofactualpower
structures.Iwillcitethe1948UniversalDeclarationofHumanRightsasdecreedbytheUnited
Nationsassupportforthishumanrightsperspectivestandard.Iwillassessandcomparepotential
risksforHonHaiinrelationtotheirbusinessobjectivesaswellasthehumanrightsperspective.
HonHaioriginatedinTaiwanin1974(CompanyMilestones).BeforeIcontinueIwould
liketoacknowledgemylimitsinthatIlackbackgroundinAsianculture.
Tomeasuresuccess,IwillbeginandendwithspecificbusinessobjectivesofHonHai,
aswellasmoralobjectives(Fischhoff&Kadvany3).HonHaismeasurementofsuccessisona

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qualitativelevelaswellasmonetary.Foxconnintendstoprovideinnovativetechnological
solutionsthatfulfillinformationandcommunicationneedsinpeopleseverydaylives(Vision
andStrategy).Additionally,theirbiggestmilestoneshavebeenofincreasingcapital,investing
andreinvesting,whichleadmetosaythatmoneyisofhighpriority(CompanyMilestones
2013).Forthesakeofthispaper,throughahumanrightslensesIwillfocusonArticles1
(dignity),4(slavery),and22(socialsecurity),whilerecognizingthatotherswillintersectwith
thetopic(UniversalDeclarationofHumanRights1948).Iwillidentifyworkertreatmentasa
risk,measureitsimportance,andthendiscussmitigationmeasures(Decker&Galer2013,p.20).
IspoorworkertreatmentariskforFoxconn?Tocontinue(tospellouttheobviousfor
examination)tothriveinacapitalistmarket,businessesneedtothinkaboutandprioritizethe
coststheygivetomarketing,shipping,andproductcreationandworkertreatment.Peopledoes
notincludelowlevelworkers,whodontgetforonethingtotestthetechnologytheyhelpto
make.
Foxconnscurrentstatedgoalsdonotexplicitlysupportworkerrights(Visionand
Strategy;BusinessPhilosophy2013).FoxconnandwellknowassociateslikeApplecameunder
fireafewyearsagoforworkersuicideatfactoriesinChina,sensationalizedbyinternational
media(Yarow2010;Moore2012).However,lessextremehumanrightsviolationsareawfultoo.
In2010,therewasastringof18deathsbysuicide(Nao2014).Anetwasputthatsameyear
aroundworkerhousingsotheycouldnotjumptotheirdeaths(Yarow).Forexample,when
workerXuLizhiinShenzhen,Chinadiedbysuicidein2014attheageof24,hispoetrywas
foundandsharedtoworldwideoutrageandsolidarity(Nao).Xudocumentedinthewordsofa
migrantworkerthemilitarystyledisciplineandsurveillance(Nao)whichexecutivequarterly

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reportsoverlook.Oneeventthatmadeittothemediawaswhenanplantaccidentcauseda
workertolosehalfhisbrain(Dicker).TheFoxconnscandalledtobetterconditionsinChinese
workplaces,andaGooglenewssearchwillpullupmanyarticlesofimprovedregulation
specificallyinChinesefactories.Whatdoesnotappearonmainstreamnewssourcesasmuchis
thefactthatFoxconnisclosingmanyChineseworksites,andopeningmanymoreinIndia
(Sinha).
Asopposedtothisbeingafailuretotreatpeoplefairly,Ibelievetreatingpeopleunfairly
islowriskforFoxconnintermsoflashback.AlargerthreattoFoxconnsgoalswouldbepublic
knowledgeofpoorworkertreatment:notthetreatmentitself.Withworkerswhohavenovoices,
companyprioritiesareunaffected.Topayandtreatworkersbadlythislowcostproducingis
tosaveresourcesthatwouldotherwisebespentmakingworkerliveslessmiserable(excusemy
tone);poorworkertreatmentdirectlybenefitsFoxconnsobjectivetomakemoney.
However,itviolatesmanyhumanrights.Thereisregulatoryriskincompliancewith
internationalstandardsofhumanrights,reputationalriskinthewidecirculation(Kan).Thisisan
operationalriskdefinedaslackofpropergovernanceandmanagementofbenefitplans
(Decker&Galer2013,p.63).Thereisnodignityinbeingthesubjectofexploitation,in
referencetoArticle1,whichstatesthatallpeoplearebornequalindignityandrights(UN
GeneralAssembly).
Tomitigatetheriskstohumanrights,Foxconnoughttotreatandtakeadvantageofthe
risk.AsIwroteinclassonSeptember30th,2015forINFO312,itpaystothinkthroughrisks
verycarefullyandmoveyourcompanyforward.Bynotmakingtheworkingconditionsa
priorityinthebusinessobjectives,thesefaultshaveoccurred.Onereasontohesitatefromthisis

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thethoughtthatthiswouldhurtFoxconnsassetsandtradevalue:anexampleofthisfearcomes
fromWalMart.Astheyincreasedwages,pricesstayedthesame,(Lutz;Covert).Toprioritize
conditions,however,thismustbeexplicitlystatedinthebusinessobjectives.Throughthehuman
rightsperspective,HonHaihassufferedenormouscontrolfailures.ThisisnottosaythatHon
Haispracticeswereorareunique.Thesescandalswereextreme,butevenlessharshconditions
violatemanyhumanrights.
WorksCited
"BusinessPhilosophy."HonHai/FoxconnTechnologyGroup.FoxconnElectronicsInc.,2013.
Web.19Oct.2015.
"CompanyMilestones."HonHai/FoxconnTechnologyGroup.FoxconnElectronicsInc.,2013.
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Covert,Bryce.WalmartsWageIncreaseIsHurtingItsStockPriceandthatsokay.TheNation.
TheNation,23Oct2015.Web.26Oct2015.
Decker,Al,andGaler,Donna.EnterpriseRiskManagement:StraighttothePoint.ERMSTTP,
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Dicker,Ron.ZhangTingzhen.TheHuffingtonPost.AOLTech,10Nov2012.Web.15Oct2015.
Fischhoff,Baruch,andKadvany,John.Risk:AVeryShortIntroduction.Oxford:OxfordUP,2011.
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HarvardBusinessReviewStaff."TheBestPerformingCEOsintheWorld."HarvardBusiness
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Kan,Michael.Foxconnbuildsproductsformanyvendors,butitsmudstickstoApple.Computer
World.ComputerWorld,24Oct2012.Web.22Oct2015.

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Lutz,Ashley.HeresHowMuchaWalMartPayIncreasewouldCostShoppersPerTrip.
BusinessInsider.BusinessInsiderInc.,18July2013.Web.10Oct2015.
Moore,Malcolm."'MassSuicide'ProtestatAppleManufacturerFoxconnFactory."TheTelegraph.
TelegraphMediaGroup,11Jan.2012.Web.28Sept.2015.
Nao."ThePoetryandBriefLifeofaFoxconnWorker:XuLizhi(19902014)."Libcom.org.
Libcom,29Oct.2014.Web.18Oct.2015.
PriceWaterhouseCoopers.APracticalGuidetoRiskAssessment*.WhitePaper.PriceWaterhouse
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Sinha,Pratik."'MakeinIndia':TheFoxconnWay?".AsiaProgressive.AsiaProgressive,7Oct.
2015.Web.22Oct.2015.
TheChinaPost/ANN."TerryGouNamedSecondBestCEOinAsiabyHarvardBusinessReview."
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UNGeneralAssembly.UniversalDeclarationofHumanRights.UnitedNations.UnitedNations,
10December1948.Accessedallthetime.
"VisionandStrategy:FoxconnsVisionandStrategyintheInformationAge."HonHai/Foxconn
TechnologyGroup.FoxconnElectronicsInc.,2013.Web.18Oct.2015.
<http://www.foxconn.com/groupprofile_en/VisionandStrategy.html>.
Yarow,Jay."AppleiPadMakerFoxconnMakesEmployeesPromiseNotToKillThemselves."
BusinessInsider.BusinessInsiderInc.,26May2010.Web.09Oct.2015.