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Luna Liu (20101019 Manuscript)

Luna Liu (20101019 Manuscript)

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FÖ0307 Environmental and social responsibility marketing 100921 Individual course Project Proposal

Corporate Responsibility A comparative analysis of Asian suppliers in the electronic industry
Phase 1- Literature Review of Private-Public Partnerships


Corporate Social Responsibility (CSR), NGO-business Collaboration, Public Private Partnership (PPP), Stakeholders Theory

Supervisor: Cecilia Mark-Herbert, Swedish University of Agricultural Sciences, Department of Economics

Address Student¶ Name
LIU, Luna



Studentvagen 32:23B, Uppsala 0765-828-618 luna.formosa@gmail.com

The Foxconn Technology Group is a Taiwanese owned company. the study aims at describing how the PPPs and NGOBusiness collaborations applied in the corporate code of conduct which could be expected in handling a human relation crisis situation. In spite of both Apple and Foxconn are committed to adopt EICC as their corporate responsibility. Hence.Abstract Between January and May 2010. there were 13 young workers constantly committed or attempted suicide at the two Foxconn production facilities in southern China. such as iPone and iPad of Apple Company and so on. and as playing the biggest and leading electronic supplier for many popular products. shocked the public and highlighted the serious discussion of Foxconn Management concerning the CSR issues as well. 1 .

........ 7 Method and Approach ......... 4............. ................. Introduction........................... ................................................. ..... ...... 7 Analysis of Literature . . .... ...... . ........................................ 7...................... 2.... ... 5................................. ................................................ ......................................... 13 References ......................................................... ................................... 6............................... ................ .. 18 2 .............. ....................................................................................................... ......................... 3 Aim ...... 3................. ................................. ....................... 7 Conclusions and Suggestions .......... ...............................Table of Contents 1................ 15 Appendix .......... ............

India and Czech Republic. there were ten Chinese migrant workers died. the supplier. Hence. Foxconn Technology Group mentioned will raise workers¶ wages. China. Contributed of diverse discourses and strong networks alliance with other NGOs at the international level.´ However.1 Problem formulation Following a string of suicides at its Chinese factories. the knowledge will help the research to develop structures and questions of the future approaches in the second phase of the study. The suicides at Foxconn have highlighted the issue of highly stressful working conditions in the global electronics industry. Introduction 1. Due to the civil society and media highly spotlighted on Foxconn. basically Taiwan as a young democratic country shares higher democracy. while three survived their injuries. the author has more knowledge of the difference political and stoical contexts between Taiwan and China. it ³has responded with psychologists. Foxconn has committed to turn up the works salary. Comparing with China which is still has o ne-party system and seriously restricted political and discourses regulation regarded as undemocratic country. The report is a close investigated on the concerns of low wage. Due to the author is from Taiwan. and asking employees to promise not to kill themselves. and feel the obligation to learn through the discussion and the implementation of CSR and PPPs to push Taiwanese suppliers to improve their CSR managements overseas and in Taiwan as well. The report is investigated by Students & Scholars Against Corporate Misbehaviour (SACOM) and some NGOs based on Hong Kong and Asia. there are still a number of violation of labors happened in Taiwan as well.1. However. has factories in Taiwan. recently there is an investigation of the case released on 12 of October. With the geographic advantage. with permission from the Apple Company. freedom of speech.´ Besides. Taiwanese companies have been asked to take more responsibility to respond the appeals from the civil society concerning social and environmental issues. excessive overtime 3 . These severe tragedies have the public concern at international level on how and why Foxconn has been shaken by the suicides and the bad press. and has installed safety nets on buildings to catch would-be jumpers. swimming pools. According to press from Foxconn. so far the Foxconn company denies the accuses outlined by the report. punch bags. do these reactions could improve the actual working conditions in China? The Faxconn Tech Group. is a Taiwanese Company. and association and so on. In terms of Foxconn¶s attitudes.

Sony Ericsson. 6. Apple and other electronics brands should reform their purchasing model. and Motorola: 1. An investigation on work pressure of workers and working conditions. and high levels of industrial injuries««to make up the µloss¶.´ Therefore. Worker degradation did not stop. even though it is still below the living wage standard that they advocate. Dell. including management methodology should be conducted by Foxconn and independent scholars. In this sense. Foxconn should end the abusive use of student workers. 2. Apple should enter dialogue with labor NGOs on the working conditions and long term improvement. 3. Foxconn should consult workers on relocation plans to make the process transparent. Nokia. etc. no social insurance. Sony. SACOM has a list of demands for Foxconn and its buyers including Apple. Unfortunately. as the report mentioned that³«sweatshops are characterized by massive labor law violations such as underpayment. Foxconn has mobilized a lot of resources to address the tragedy of worker suicides. Foxconn must honor its promised wage increase and offer basic wage at CNY 2000 to all workers in China. The brands should raise their unit price to ensure that workers have a living wage. 9.work and harsh management. Apple and other buyers of Foxconn should deliver codes of conducts to all workers and ensure that they can understand their rights. production targets keeps surging. tasks are broken down into more precise and tedious steps. and workers have to compete with each other for production bonuses. it has not committed to structural reform. Foxconn should provide more supportive services to workers. 4 . workers are treated inhumanely like machines. management everywhere has developed different tactics to boost productivity in the factory. 5. It merely returned in more insidious forms. Brands should work with Foxconn to conduct labour rights training for workers with monitoring from labour nongovernmental organizations (NGOs). 8. 7.´ Therefore. 4. In the past few years. Foxconn should work with the existing trade union to launch democratic elections in accordance with the Trade Union Law in China. the tragedies presented by the media and mentioned on the criticisms in terms of "workers are ordered to stand during the work shift. 10. based on the research findings. The report also focuses on Foxconn¶s wage increase proposal. HP.

the study will try to analyses from the view of NGO concerning the mechanism and challenges of implementation of CRS based on PPP theory. At phase 3. failures. and arguments of the context. That¶s brought up the concern of the study. the study will focus on the news. the study will continue to perceive discussion of stakeholder regarding NGOs in the PPP. The study tries to clarify the definition. the study has started to do a literature review of PPP theory. esp. the former managers alto suggest Foxconn should re-construct the management strategies. The current paper at phase 1 could help the researcher get inspiration for the rest study. successes. Foxconn. 1. Concerning the enforcement of CSR under PPP context. 7. This is the main part is dealing with in the paper. At phase 2.3 Basic information -About the Global Economy 5 . Therefore. During the period. investigation and reports concerning the Foxconn case since May to December in 2010 and an ongoing case. what kind of mechanism could improve the working conditions gradually in the supplier in Asian context? On the other side. 9 and 10 on the report. the author would like to do some semi-interviews and questionnaires from different stakeholders. which has good reputation concerning the implementations of CSR. there are some calls for concerning the implementation and expectation of CSR from different stakeholders in this case. concerning the current issues and crises. the study will do a comparative study between Foxconn and other supplier. from the NGO¶s side. 1. 6. Hence. such as Fujitsu. the NGO-Business Partnership. esp. the study will divide into 3 phases as following: At phase 1. there are some articles written by some former managers pointed out that. 8. In fact.2 Limitation Concerning time limits.According to the above point5. for the previous top managers for Foxconn. and the company Apple have mentioned they¶ve integrated the CSR into their management. although the supplier. the enterprise culture and the visions should related to CSR more.

esp. not by selling its own brand products. (Rivoli. due to features of the life cycle of current electronic products mentioned in this case are very short. was founded in Taipei.´ (Clapp & Dauvergne. especially. she saws the gradually improvements of labors and environmental concerns since 1999. the protests toward World Economic in coming 2000. the book The Travels of a T-shirt in the Global Economy: An Economist Examines the Markets.´ The study would not cope with the sustainability and degrowth discourses of products in terms of the influences of global economy. Foxconn is currently the world¶s largest contract electronics manufacturer. The perspective of the study regards is being more positive of the implementation of CRS and PPP in the field. Taiwan in 1974. and in part by economic factor«.As Julia Rotter & Nurgül Özbek (2010) illustrated ³ due to globalization. societies. literature on PPP has become quite an extensive field. Power and Politics of World Trade.. since the United Nations Conference on Environmental and Development(UNCED) in Rio de Janeiro in 1992. in the first five months of this year as of 27 May 2010. and cultures. The company is poised to take in over 50 percent of global electronics manufacturing service industry revenue by 2011. many global firms began to µgreen¶ themselves. Foxconn declares itself ³the most trusted and preferred partner in all aspects of global electronics outsourcing to help customers de-risk their business. 2005) -About the Foxconn Hon Hai Precision Industry Company. the study would not go too much further discussion of this part. the study is based on the illustration that ³we are now in an era of globalization.´ And ³in response to criticism of their poor environmental practices in the late 1980s and early 1990s. it is important to investigate how it interfaces with global environmental changes. managements and consumption values in strong sustainability.´4 Tragically. With a lack of outside forces to regulate them. As professor Pietra Rivoli mentioned on her first-hand investigation. particularly in developing countries. This enthusiasm by industry for self-regulation is driven in part by an attempt to improve their public images. they have embraced self regulation via voluntary initiatives. better known by its trade name Foxconn (Fushikang). meaning that it makes most of its money as a made-to-order manufacturer. Under the leadership of founder and CEO Terry Gou. a startling 13 young workers attempted or 6 . 2009) The perspective of current globalized economy. As a process that touches on many aspects of ou r economies. Reflecting and arguing the negative and positive sides of global economy. however.

to virtually all Foxconn¶s image-conscious customers. Dell. Aim With the understanding and premise of PPP and NGO business Collaboration. (2) Motivational factors & benefits arising from PPPs and NGO-business Collaboration.committed suicide at the two Foxconn production facilities in Shenzhen City in southeastern China. IBM. (Chan and Pun. Concerning the stakeholders. Public-Private Partnerships: NGO-Business Collaboration. (2) Motivational factors & benefits arising from PPPs and NGO-business Collaboration. for further study concerning the implementation of CSR in Asian contexts. and the NGO-Business collaboration. the study has basic and broader comprehension of PPP theory. Additionally. 3. and would like go further to see the role and discussion of NGO in terms of NGO-business Collaboration. then this study is based on the literature review mainly on articles and books from academic management journals and website. HP. and a crisis of corporate responsibility. ³the discovery phase reorganizes the managerial view of stakeholders. the aim is to describe three main topics that had been brought up: (1) Strategic involvement of NGOs. the study will give brief explanations of the stakeholders. Base on such premise. This study is basically inspired by a previous research done by Julia Rotter & Nurgül Özbek (2010). Samsung. PPP. the analysis is conducted on three main topics that had been brought up by the researchers for the common interests and concerns: (1) Strategic involvement of NGOs. Enhancing the importance of CSR and PPP concern. the research papers and literatures recommended by the course supervisor have been taken into account. including Apple. (3) Success and Challenges factors. But before making the analysis the four main topics. 7 . (3) Success and Challenges factors. moving them form outside the sphere of business to giving them a central role in it. bringing a public relations crisis. 2010) 2. this study firstly tries to describe the case of Foxconn and some arguments from the NGO¶s aspects. Analysis and Discussion After reading through the articles and materials. Hitachi and other electronic giants. Nokia. Method and approach In the first phase. 4.

cultures. resources. generally the PPP is regarded as ³a voluntary or collaborative alliance which implies cooperation between tow (or more) actors be it public. especially ³how an organization chooses to define its stakeholders is an important determinant of how stakeholder relations are considered in sustainability decision-making and how stakeholder reactions are managed. 2006.12). competencies whilst committed to common tasks which would achieve their specific individual goals´ (www. regarding managing sustainability. From Julia Rotter & Nurgül Özbek µs study ³this type (the definition of UNDP) of cross-sectoral alliance can be used for example as a way to emphasize on a Corporate Social Responsibility (CSR) commitment. but are sharing risks. Dell as the global computer company. as the United Union Development Program (UNDP) mentioned. responsibilities. Marc J. and environmental impacts on these groups throughout the value chain. has grouped its stakeholders into four categories: (Marc. social.´ With such concern. Epstein reminds readers to identify the stakeholders. non-governmental organizations (NGOs) or any group of individuals which could fundamentally have different objectives. Laszlo. values. 2008) Figure1: Dell Stakeholders Model (Marc. stakeholders value for business comes to represent the market internalization of a social and ecological dimension that was viewed«´ (P.It requires managers to identify key stakeholder groups and assess the company¶s economic. Chris 2008) Besides.179. 2008) Concerning the definition of PPP. private. here I¶d like to borrow the stakeholders model of Dell (Figure1) mentioned by him. this study would also like to rely on this UNDP definition as well (Julia & Nurgül. p. 2010) 8 .´ Hence. In effect. UNDP. structures.

(d)global governance and standardization. and other actions that constrain a target¶s behavior Upset the status quo. NGO±business±government interface. Julia Rotter & Nurgül Özbek (2010) illustrated that ³in all the articles covered. boycotts. (b)dyadic partnership (NGO±business).1 Strategic involvement of NGOs 9 .´ For concerning the functions of NGOs especially from a research with a long term and holistic perspective. and NGOs as one of many corporate stakeholders.Concerning the discussion of NGO-Business Collaboration. the overall perspective towards NGO-Business collaboration shows a common understanding that it is an ongoing trend among corporations and non-profit organizations as well. (e)national-level governance. Arno Kourula & Salla Laasonen (2008) classified the NGOs into three categories according to their focus: NGO±business interface. Six main themes they gave are identified: (a)Activism and NGO influence. data on numbers of people affected) Express empathy and sympathy Show pictures of how others are suffering Express the dangers of the situation continuing Table 1: Examples of advocate actions and strategies (London . take people out of their comfort zone Treat others fairly and equitably Make fair decisions despite others¶ disagreement Give others a chance to voice their opinions Organize resources to help others Deliver services Ensure fair treatment of others Stand up for others¶ rights by expressing a clear opinion Act altruistically Champion the cause of people who cannot speak for themselves Provide information about others¶ hardships (for instance. (c)crosssector partnership (NGO±business± government). especially the extremely vital function of NGOs (2010): How they do it (advocacy strategies) What advocates do(advocacy actions) Take public action Cognitive Explain their viewpoint publicly Are not afrai d to be viewed as outspoken Emotional Pursue a cause doggedly (do not give up easily) Put their reputation on the line Warn targets about potential losses Do not take ³no´ for an answer Warn of the dangers of inequitable treatment Behavioral Stand up for what they believe is right Participate in demonstrations. and (f)stakeholder management. 2010) 4. Thus it is a fact that alliance can be conducted at all strategic levels and both parties can gain in the long run at all kinds of these involvements as long as it is chosen carefully according to the goals set mutually to be achieved. Manuel London provides the researchers an over view of definition of advocacy (Table 1). The involvement level of the collaboration may be defined in several ways. In terms of social advocacy.

the study provides a case study gave by Marc Epstein.. 2008) Figure 2: BHP Billiton value drivers (P.35. Epstein. Marc J. from the case study on BHP Billiton (Figure 2). 2008) Furthermore. 2008) 10 . he demonstrated the advantages of implementation of concerns from PPP fields: (Marc. Epstein shows the reader the values from the company and societal which will help the study to improve the function and expectation of CSR.In order to enhance the benefits and advantages of Strategic involvement of NGOs. He gives us a clear picture. (Figure 3) Figure 3: BHP Billiton: beyond the business case Epstein.

corporate monitoring. and Tools. Influence: proactive confrontation with alternative models / systems that take business share. Revenues: CS-based with membership fees and donations. demonstrations. Revenues: Dominantly business-based.´ 11 . they mentioned ³it has to be acknowledge that there are also many costs and risks involved. NGOs developing / buying for profits Producing Change Working in a minority position inside an industry to create basic reform by taking business share Commercialization Ideology: business is viewed critically. Control: Shared or NGO control. (Julia & Nurgül. Revenues: Mixed. Influence: force. Julia and Nurgül summarize the success of a PPP relies heavily on expectations. negatively screened social investment fund Cooperatives. Revenues: CS-based with membership fees and donations. program related Investments. Danger Confrontation/ Collaboration Spectrum Irrelevance Ideology: business is viewed guardedly. Danger. public opinion campaigns.4. NGO accountability frameworks. Influence: must give inducements to change. Promoting Change Work in CS to influence business Facilitating Change Working with the business for mutual gain Co-optation Ideology: business is viewed positively. Confrontation/Collaboration Spectrum. employee ownership. may have some business involvement. commitment and clear guidelines but also heavily on ethical issues. Control: Usually shared business ± NGO and often government. and pressure for change.3 Success and Challenges factors From an overview research. holism. 2010) And through the literature review focuses on the benefits and success factor. Strategy. Insider/Outsider. Steve Waddell gave the reader a comparative aspects concerning the characteristics for the civil society business strategies: Table 2: The Confrontation to Collaboration Spectrum (Waddell. often business emphasis. Insider/ Outsider Spectrum Control: CS control with no business involvement. Joint business-NGO boards like the GRI. NGO scientific research Tools Boycotts. have been mentioned in the following table (Table 2). there are 5 main factors. Control: CS control. positively-screened social investment funds.2 Motivational factors & benefits arising from PPPs and NGO -business Collaboration While concerning the NGO-Business Collaboration in PPP. business community advisory committees. Influence: must give inducements to change. contracts. NGO Advisory Groups / Boards / Committees. demand. lobbying politicians. 2006) Characteristics of the Four Civil Society (CS) Business Strategies Forcing Change Strategy Mobilize NGO to force change and stop corporate actions Marginalization Ideology: business is viewed negatively. which are not to be underestimated. micro-enterprise funds 4.

y Furthermore. and tension between autonomy and accountability ± members may be accountable to their stakeholder groups. then the effective operation on their partnership may be difficult to achieve´. points to the potential problems and pitfalls associated with collaboration and. where a closer contact between the partners is required. and being truly committed to achieving a mutually desired and acceptable outcome. 1998). by association. It comes very much to the fore in strategic alliances when the cooperating firms continue to be independent organizations and a new situation appears in which an interaction is established between two firms with different organizational cultures. and 3) operational personnel. therefore. 2006) From this above research. Similarly. which may lead to lack of trust between the parties and to conflicts which may arise when the time comes to make decisions (Buono. ³the characteristic spirit or attitudes of a community. Where there is mistrust and hostility between some or all of the partners. it has shown that ³the partners must work extremely hard at understanding each other. in terms of discussion on ³collaborative activities within and between organizations.´ (Trafford & Proctor.According to Kanter (1999). or people (Webster. the relationship will never 12 . From the insights of Trafford & Proctor (2006). than in contractual alliances (Schultz. represented by continuing contact among: (Trafford & Proctor. while concerning Ethos. Otherwise. 1991). cultural conflicts are more common in joint ventures. effective collaboration requires connections at three levels across collaborating organizations. 2) middle managers to develop plans for joint activities. which may mean checking back before committing to a decision. they reminded the challenges of the partnership should be concerned due to ³partnerships create a new form of accountability between their members which rests primarily on trust. with partnership´ includes: loss of control ± the inability to take action if things seem to be going wrong or differently from expectations: shared decision-making may be problematic. who carry out the day-to-day work of the alliance. developing common objectives. This usually implies different leadership styles and different objectives. y y multiple goals ± stakeholders are likely to want to achieve their own particular goals which may not relate to the stated purpose of the partnership. 1992). 2006) 1) top management to develop broad goals and monitor progress.

the key questions 13 . contacts. 1999. they conducted that ³sustainability and CSR seems to be the key underlying issues that motivates most companies to engage in PPP. from the indictors and suggestions demonstrated by the researches. open communication. p. risk management.´ But generally.´ Besides. at the phase of 2nd and 3rd. The key to making partnerships work comprises common sense. the study. and a good plan and strong leadership. which can determine the success or failure of a PPP. as well as a democratic and participatory process in decision making (ADB. There seems to be a power struggle as well as barriers regarding knowledge transfer and learning environment. Planning. response to external pressure.3) ´ . in fact. the right environment. Nutavoot reminds the researcher.27).furthermore. Conclusions and Suggestions: From the conclusion from Julia Rotter & Nurgül Özbek (2010). Those are followed by more specific and technical attributes such as expertise.´ (Pongsiri. A clear legislative framework specifying the roles of the public and private sectors.truly succeed. the private sector needs to consider its social responsibility. they pointed out that ³in order for a PPP to be successful. Nutavoot Pongsiri provided an important observation of several cases namely ³partnerships require effective government regulation. trust. which may be present in a successful partnership venture. 1999. Public-private partnerships should be seen ³in partnerships.´ The success factors outlined. 2002). p. reputation. transparency. Trafford & Proctor remind researchers to look at five helpful research indicate ³Communication. Openness. From Nutavoot¶s viewpoints. which should be based on a stable and trusted system of enforceable laws concerning property rights. especially with focus on the environmental and ethical business practices of the private sector. disputes and liabilities. PPPs may ³achieve cost reductions at the price of democracy and equity (Rosenau. while the public sector needs to create the appropriate legal and regulatory structures.´ Therefore. Ethos and Direction. commitment and clear rules have to lie at the heart of a PPP together with the acknowledgement that it is a developing process. etc. positioning.´ 5. based on the current literature review at the 1st phase. trust. their relationships and the areas for co-operation is essential for building their sustainable partnerships.

be presented in a successful or failed partnership venture. Ethos and Direction.should be brought up will include Communication. Planning. 14 . Openness.

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org.com/greatspeculations/2010/07/19/apple-can-muscle-through-chinese-laborissues-up-to-296/?partner=relatedstoriesbox . by Jul.tw/node/52338 . Foxconn Expands Mexican Plant Jason Mick (Blog) . 2010-10-02 China to Publish Foxconn Suicide Probe.htm.coolloud. Global Capital.June 15.com/China+to+Publish+Foxconn+Suicide+Probe+Foxconn+Expands+Me xican+Plant/article18719.forbes. 2010-10-10 Foxconn suicides: Time for fair trade electronics? Would you buy a fair trade iPhone? http://www. 2010 http://www. and the State (The Asia-Pacific Journal: Japan Focus) http://japanfocus. 19 2010) http://blogs. 2010-10-08 17 . 2010-09-30 Apple Can Muscle Through Chinese Labor Issues Up To $296 (from Forbes.Suicide as Protest for the New Generation of Chinese Migrant Workers: Foxconn.dailytech.org/-Jenny-Chan/3408.

Electronic Manufacturing Services (EMS) firms and Original Design Manufacturers (ODMs) including contracted labor that may design. and that business operations are environmentally responsible.1 The Code encourages Participants to go beyond legal compliance.Appendix: 1. For the Code to be successful. The Electronic Industry Citizenship Coalition is committed to obtaining regular input from stakeholders in the continued development and implementation of the Electronic Industry Code of Conduct (EICC). 18 . market. manufacture and/or provide goods and services that are used to produce electronic goods. Participants must regard the code as a total supply chain initiative. must operate in full compliance with the laws. a business shall declare its support for the Code and actively pursue conformance to the Code and its standards in accordance with a management system as set forth in the Code. At a minimum. 2009. rules and regulations of the countries in which it operates. The Code may be voluntarily adopted by any business in the electronics sector and subsequently applied by that business to its supply chain and subcontractors. To adopt the Code and become a participant (³Participant´). Fundamental to adopting the Code is the understanding that a business. EICC) The EICC code of conduct provides ³guidelines for performance and compliance with critical CSR policies´ and covers five main areas: ‡ Labor ‡ Health and Safety ‡ Environment ‡ Management System ‡ Ethics The ELECTRONIC INDUSTRY CODE OF CONDUCT states that the Electronic Industry Code of Conduct establishes standards to ensure that working conditions in the electronics industry supply chain are safe. in order to advance social and environmental responsibility. About the EICC: (Version 3. Considered as part of the electronics industry for purposes of this Code are Original Equipment Manufacturers (OEMs). that workers are treated with respect and dignity. in all of its activities. drawing upon internationally recognized standards. participants shall also require its next tier suppliers to acknowledge and implement the Code.

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