You are on page 1of 23

JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO.

1, 2011 1

The Challenges of Corporate Social


Responsibility Practice: A Case Study of
Taiwanese Investment in China
1 2 3
Kwek Choon Ling, Ho Wai Kee, Kwong Chee Kueng
1,2
School of Management, Faculty of Management and Information Technology, UCSI
University
3
Technical Operations, Allianz General Insurance Company (Malaysia) Berhad
kwekcl@ucsi.edu.my
______________________________________________________________________________

Abstract

China is one of the world’s biggest and fastest growing economy countries. China is opened
up to foreign trade and investment in 1978 and becomes one of the most important
destinations for cross border direct investment. The challenges for a foreign investor to
address in her quest of going global is the continuing commitment by business to behave
ethically and contribute to the economic development while improving the quality of life of
the workforce and their families as well as the community and society at large. A string of
suicide among the workers at Foxconn’s plant in Shenzhen has raised question about the
condition of million workers in China and the corporate social responsibility practice of the
foreign investor in China. The objective of this paper is to use the corporate social
performance model to identify the weaknesses in corporate social responsibility practice of a
multinational corporation, Foxconn. The case-based research methodology is used to address
the research problem. Scope of investigation covers the management style of the corporation
and employee management of the corporation. This research which is conducted based on the
Corporate Social Performance model will address the strategy that could be adopted by the
multinational corporation in responding to the social responsibility and social issues. Based
on the case study analysis, Foxconn is adopting reactive strategy in management style and
accommodative strategy in managing the workers.

Keywords: Corporate social responsibility, corporate social performance, Multinational


Corporation
______________________________________________________________________________

1. INTRODUCTION

China is one of the world’s biggest and fastest growing economy countries. According to the
2010 A.T. Kearney Foreign Direct Investment Confidence Index, China remains the top-
ranked destination by foreign investors, a title it has held since 2002 (Kearney, 2010).
Foreign direct investment (FDI) in China rose 14.3% year-on year in the first five months of
2010. The manufacturing sector is the favourite segment for FDI as it attracts about 47.3% of
the total overseas investment in China for the first 5 months period in 2010 (Agence France-
Presse, 2010). However, the inflow of FDI in China has posed some challenges for the
implementation of CSR practices among multinational corporations (MNCs).
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 2

Corporate Social Responsibility (CSR) has already become a challenge that MNCs have to
face in an emerging market where every business decision may be tagged as exploitation of
local workers. The tragedies at Taiwanese high technology firm, Foxconn has further
illustrated the CSR challenge in terms of foreign corporation industrial relationship with local
workers. Foxconn is the largest manufacturer of electronic and computer components
worldwide and Foxconn is mainly manufacturers on contract for other companies like Apple,
Hewlett-Packard and Sony. The corporation has raised wages by 67% for its hundreds of
thousands of workers in China after 11 suicides, 10 of them in southern Shenzhen city
(Agence France-Presse, 2010). Foxconn’s present situation is inextricably linked to the
‘blood and sweat’ of migrant workers. The treatment to the workers by the Foxconn has
posed challenge to its CSR principles of which emphasize on contribution to society well-
being, valued employees, pay workers a fair and reasonable wage, provide safe and
comfortable living infrastructure for the workers and ultimately to allow migrant workers in
becoming true “citizens of the enterprise” (Sacom, 2010).

What are the underlying problems with the CSR practices in respect of employee relation
issue in Foxconn that lead to the string of workers suicide tragedies in its Shenzhen main
plant? In responding to this question, the objective set for this paper is to identify the
weaknesses in Foxconn's CSR practices in respect of employee relation issue by using
Carroll’s corporate social performance (CSP) model. Furthermore, the authors attempt to
propose appropriate suggestion to overcome the above weaknesses identified. With this
objective, the study contributes in the following points: the study attempts to identify the
challenges faced by MNCs when managing its CSR practices in respect of employee relation
in China. The finding could be meaningful reference on CSR-employee relation issue to
MNCs who wish to invest in China.

The remainder of this article is structured as follows: in the first section, a discussion on
theoretical concepts related to Corporate Social Responsibility, Corporate Social
Responsiveness and Corporate Social Performance Model; in the second section, a
presentation of the methodology; in the third section, the authors analyse the CSR practice in
respect of employee relation at Foxconn’s plant in Shenzhen, China, identifying the
challenges; and finally, in the last section, the authors conclude the findings and suggestion.

2. LITERATURE REVIEW

2.1 The Impacts of Foreign Direct Investment in China

The FDI in China by MNCs in past several decades have brought big increase in every
imaginable indicator of economic performance (Rawski, 1999, p.139). The dynamic
economic growth stimulated by MNCs also created numerous social issues that resulting a
gap in terms of desire objective between MNCs and China local society especially in terms of
the commitment of the MNCs to its social responsibility to China. Some of the social issues
had eventually leaded to recent labour unrest incidents like string of suicide in Foxconn and
workers strike in Honda (Foroohar, 2010).
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 3

2.2 Foxconn Technology Group

The Foxconn Technology Group (Foxconn) is a Taiwanese Owned multinational business


group anchored by Hon Hai Precision Industry Company Ltd (Foxconn Group Profile, 2007).
Foxconn established its first manufacturing plant in Shenzhen, China in 1998 and now the
corporation is operating with 20 plants and employs more than 800,000 workers in China.
The Shenzhen plant in GuongDong Province with total workers of 400,000 is the largest
plant for Foxconn in China (Chan, 2010).

Foxconn is now the Fortune 500 corporations and also the world’s largest contract
manufacturer of Computer, Communication and Consumer-electronics ("3C"). The
corporation manufactures popularly demanded electronic gargets like iPhones, iPads and
other electronic for corporations such as Apple Inc and Hewlett-Packard Co. (China Daily,
2010). The mission of the company in integrating the expertise for mechanical and electrical
parts and an uncommon concept is to provide the lowest "total cost" solution by advancing in
nanotechnology, heat transfer, wireless connectivity, material science and green
manufacturing to increase the affordability of electronics products for all mankind has gain
appreciation from the worldwide customers (Foxconn Group Profile, 2007).

Based on Foxconn inaugural Corporate Social and Environmental Responsibility 2008 Report
(CSER); the report outlines the commitment, plans and aspirations of Foxconn to be the
CSER leader in the 3Cs industry. The corporation also reported the implementation of a wide
range of initiatives to improve on its performance across the spectrum of corporate
responsibility issues. The reports also highlighted the proactive working relationship with its
stakeholders and other interested groups on CSER issues (Corporate Social and
Environmental Responsibility Report- Foxconn Technology Group, 2008). The
understanding on the concept of the CSR, its evolutions as well as the CSP modal are
essential in order to provide a platform to evaluate the effectiveness of the CSR practice in
Foxconn.

2.3 The background of Corporate Social Performance

Keith Davis (1960, p.70) relates the CSR to “businessmen’s decisions and actions taken for
reasons at least partially beyond the firm’s direct economic or technical interest”. Davis
(1960) also argued that the corporation being an economy unit in the society has a broad
obligation to the community of which it is operates in terms of economic development as
well human value development. Sethi (1975) defined social responsibility as the corporate
behaviour that goes beyond social obligation but rather to commensurate to the social norms,
value and expectation. Sethi (1975) also argued on the necessary to distinguish between
social responsibility and social responsiveness to corporation in relation to corporate social
performance.

2.3.1 The Evolution of CSR

The selection of corporation responsibility priority between profit-oriented or social-oriented


has been the main challenges faced by corporation managers in business decision making.
Traditionally, the sole responsibility for the corporation was to provide a maximum financial
return to the shareholders. The sole concentration on profit pursuit by most corporations had
changed for the past 30 years in view of the increased pressing demand by the society onto
the corporation in ensuring its conformity to the laws and ethics requirements (Carroll, 1991).
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 4

In 1963, Joseph McGuire (cited in McGuire, 1963) has proposed a broader view on Corporate
Social Responsibilities where corporation does not only economic but also legal obligation
and certain responsibilities to the society which extend beyond these obligations (McGuire,
1963). Eells and Walton (cited in Ells & Walton, 1961) had highlighted that the CSR should
be taken as the ethical principles that ought to govern the relationship between the
corporation and society. Hay, Gray and Gates (1976) further suggested that the CSR as the
business decision made by corporation should go beyond profit orientation but also aiming at
mobilizing economic resources to address social issue like social problems, poverty and
racial discrimination. In conclusion, the corporate responsibility towards the compliance to
the value, expectation and interest of the society had laid down the fundamental of modern
definition on CSR.

2.3.2 The Evolution of Corporate Social Responsiveness

Till the 70s, the CSR concepts mainly focus on the notion of business obligation and
motivation that remains philosophical principles where there is no clear guidance for
corporation to determine what are the social issues that the corporation should become
concerned and involved (Clarkson, 1995). The CSR concepts have overlooked the action and
performance of the corporation in maneuvering the concepts into the proper corporation
strategy and plans (Carroll, 1979). The absence of proper definition on how corporation
should identify and address the relevant social issues to the corporation has lead to the
necessity of a more practical managerial oriented concepts of Corporate Social
Responsiveness that emphasize on how the corporation and its managers should behave in
reacting and responding to the social issues on a timely and effective manner.

The Corporate Social Responsiveness generally emphasized more on actual tangible activities
that contributes to the social responsibility rather than rely upon simplified and philosophical
utterances. The corporate social responsiveness also puts strong emphasis on the needs for
tools, techniques, organizational structures, and behaviour system most appropriate to
identify and measure in an empirical manner towards the business-and-society issues. The
systematic approach in uncovering the social issue as well as identifying both the internal and
external constraints on organizations such as inflexibility or corporate structure, the lack of
social measurements capabilities as well as hefty cost associates with CSR activities will
enable the corporation to device the appropriate actions and programs to overcome the issues
in a more efficient manner (Federick, 1978).

2.4 Corporate Social Performance

The concept of Corporate Social Performance (CSP) has become the focus of the studies
among researchers on the past few decades which aims in prescribing, identifying, measuring
and anticipating how corporation responses or reacts to the social aspects created by the
management behaviour (Buchholz & Rosenthal, 2004).

2.4.1 The Concepts of Corporate Social Performance

There are many researchers provide valuable input in enriching the CSP concepts. Carroll
(1979) introduced the three dimensional CSP model as in Figure 1. The model provides a
valuable framework integrating the social responsibility, social responsiveness, and social
issues for the overall analysis of the responsibility of the corporation to the society (Wartick
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 5

& Cochran, 1985). The underlying interaction nature of the CSP model among the principles
of CSR, the process of social responsiveness and the policies development to resolve social
issues provide a distinctive perspective on corporation strategy towards achieving its
obligations to the society (Wartick & Cochran, 1985). Wartick and Cochran (1985) defined
CSP as a continuous interaction among the social responsibility principles, the responsiveness
process to social issue and the relevant policies and programs developed to resolve the social
issues. Wood (1991, p.693) enriched Wartick and Cochran CSP definition by redefining the
concept of CSP as “a business organization’s configuration of principles of social
responsibility, processes of social responsiveness, and policies, programs, and observable
outcomes as they relate to the firm’s societal relationships”.

The model, in the form of a three dimensional cube integrate Corporate Social Responsibility,
Corporate Social Responsiveness on the social issues and the specification of the philosophy
of response by corporation (Carroll, 1979; Clarkson, 1995). Carroll’s CSP model was
developed based the four parts of CSR pyramid that attempted to reconcile the corporation’s
economic orientation with its social orientation by including the idea of economic and legal
obligations and ethical and philanthropic responsibility. The Carroll’s CSP model is still to be
considered the most widely recognized model to present the CSR (Galbreath, 2009; Matten &
Crane, 2005). Carroll’s CSP model will be used for the discussion in the remaining section.

Figure 1. The Corporate Social Performance Model

Source: Carroll, 1979, p.503

2.4.2 The Dimension of the Corporate Social Performance

Carroll’s CSP model is divided into three dimensions namely social responsibility category,
social issues involved as well as philosophy of social responsiveness.
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 6

2.4.2.1 Social Responsibility Category

The first dimension of the CSP model defined the CSR responsibility of a corporation. The
CSR responsibility must embody the economic, legal, ethical and discretionary obligations of
the corporation to the stakeholders and the society. The four categories demonstrate a
continuum with economic concerns on one end and social concerns on the other. All the four
categories are inter-related and not mutually exclusive (Carroll, 1991). The Carroll’s four
categories of CSR are popularly used by scholars who conduct research on social issues
(Wood & Jones, 1996).

The economic responsibility is the first and most important responsibility of corporation in
view of the legitimate obligation in providing financial return to its shareholders. The
corporation institution is the basic economic unit in society of which has the responsibility to
produce goods and services that demended by the society and sells them at a profit
(Friedman, 1970). Generally, the characteristic of the economic responsibilities will be the
corporation operating in a manner consistent with the objective of maximizing earning per
share. The main objective of the corporation is to ensure profitability and strong
competitiveness. The corporation needs to maintain a high level of operating efficiency in
order to ensure costing is low in return for higher margin. In short, the corporation will be
considered as a successful corporation if it is consistently profitable (Carroll, 1991).

As corporation exists at the pleasure of the society; its behaviour and methods of operation
must fall within the guidelines set by society. Similar to government, corporation has a social
contract – an implied set of rights and obligations. The contract is general remains as the
source of business legitimacy despite it may change as societal conditions change
(Donaldson, 1983). Hence, the legal responsibility highlighted the requirement of the
corporation entity in compliance to the ‘social contract’ between the society and the
organization of which the entity is expected to fulfill its economic mission within the
parameter of the government and law requirements. The corporation is required to comply
with various federal, state and local regulations as well as law of overseas country where it is
has footprint (Carroll, 1991).

Although the first two categories embody ethical norms, there are additional behaviours that
are not necessarily codified into written law but nevertheless are the value and expectation
demanded by the society. There is in accordance to the underlying principle of corporation
acts as a moral agent within society (Ozar, 1979; Rawls, 1971). Business corporation to
certain extend is similar religious institutions where they owe responsibility to society to
reflect and reinforce values. Donaldson (1982) has commented that corporations have the
capacity to use moral rules in decision making and control not only overt corporate acts but
also the structure of politics and rules. Scholar like Preston and Post (1975) had argued that
there is a genuine responsibility of the corporation in contributing to the host society in term
of social well being. Therefore, corporations must meet the conditions of moral agency of the
society and must behave ethically in a manner consistent with society’s standards, values,
norms and expectations. There is a generally accepted rules that the corporation is considered
fulfilling the ethical responsibility as long as the corporation exceed and over the legal
requirements, to do what is right, just and fair and avoid create harm to the society (Carroll,
1991).

Discretionary (or volitional) responsibilities demonstrate that the company should exercise
judgement and choice accurately and voluntary in doing business that assume social roles
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 7

over and above the society expectation, not required by law, and not even generally expected
of business in an ethical sense. This includes activities or programs that promote human
welfare or goodwill, be a good corporate citizen that contributes resources to the society that
aims to improve qualify of life (Carroll, 1991). In summary, a CSR corporation should strive
to make a profit, obey the law, be ethical, and be a good corporate citizen (Carroll, 1991;
1999).

2.4.2.2 Social Issues Involved

The second dimension of CSP model is to relate the corporate social responsibilities to the
corresponding social issues or topical areas. It is important for corporation to identify
constantly the social issues that business needs to address as the issues changed over a period
of time following changed of society mentality, education level and society structure.
Besides, the evolution and cross border expansion of the business involving different cultures
and norms and laws also poses a necessity requirement on corporation to constantly identify
the social issue encounters. A timely identification of social issues concerns the corporation
based on the considerations of corporation resource ability to match the corporation needs
with the social needs, the seriousness of the social needs, the commitment and the interest of
the top executives, public relations value of social action as well as the governmental
pressure will directly determine the successfulness of the corporation in resolving social
issues (Holmes, 1976).

There are many influencing factors in determining the success of a corporation namely
economic, political and legislative factors of which are beyond the corporation means.
However, there is another important factor that within the control of the corporation could
affect the corporation survival and success. The factor is the approach of the corporation
manager in managing the stakeholder expectations. The stakeholder approach is about the
managerial behaviour taken by the corporation in response to the groups and individuals that
have, or claim, ownership, rights, or interests in a corporation that could affect the entity
(Clarkson, 1995; Freeman, 1984). The Stakeholders can be primary or secondary. Primary
stakeholder groups comprise of shareholders (owners/investors), employees, customers,
investors, suppliers, government, and community with whom the corporation may have a
formal, official, or contractual relationship (Clarkson, 1995). The primary could be further
breakdown by internal and external stakeholder groups. While internal stakeholders comprise
of employees and investors, external stakeholders include customers, communities, suppliers,
government, and natural environment (Galbreath, 2006). Secondary stakeholders are media
and special interest groups towards whom a corporation does not have any engagement or
contractual obligation (Clarkson, 1995).

A corporation’s survival and success depends on the ability of its managers to create wealth,
satisfaction or opportunity for its. If any of the primary stakeholder groups become
dissatisfied and withdraw its support from the corporation whether totally or partially will
seriously and adversely affect the corporation operation (Clarkson, 1995). This requires
corporation to identify and integrate crucial social issues, specific to each primary
stakeholder, with organizational policies and practices. An effective stakeholder management
has become more important for corporation that involving in cross border investment in view
of the diversity stakeholder issues in local as well as global platforms.

Corporation policies and practices toward the well being of the employees are an important
CSR indicators for corporation especially those with cross nation operation. The complexity
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 8

arising from differences of societal standards and expectations regarding working conditions,
benefits and compensation structure are to be considered the challenges to the MNC. An
employee-oriented company will commit resources to promote employee welfare (Hooley et
al., 2000). At a minimum, employers are expected to respect employees’ rights (Donaldson,
1989). In a survey of 3,500 Americans, 85 percent of the respondents opined that better
treatment of employees is a high indicator of corporate citizenship (O’Brien, 2005).
However, workplace issues such as poor working conditions, lack of equal opportunity, and
‘sweat factory’ have frequently caught the attention of media, regulators, and the public.
Catering to such issues enhances CSR towards employees

Among the stakeholder of corporation, ethical treatment of employees has to be considered


the most important aspect of an organization’s CSR (Brammer et al, 2006). The
implementation of the CSR at the workplace that emphasize on workforce welfare, physical
and psychological aspects will not only create satisfied and happier workforce but also a
productive one. The contented and productive workforce will directly contribute to the
corporation success. To certain extent, the society responses toward the treatment to the
workforce will also an important factor for governmental intervention and social rejection by
the local as well as international community (Holme, 2010).

2.4.2.3 Philosophy of Social Responsiveness

The third dimension of the CSP model addresses the philosophy, mode or strategy that could
be adopted by the corporation in responding to the social responsibility and social issues that
being identified in the second dimension. The degree of responsiveness of the manager could
be ranged on a continuum from no response (do nothing) to a proactive response (do much).
The degree indeed depends on how manager of the corporation appreciation of the moral
obligation towards the social issues (Carroll, 1979). Response strategies to manage the issues
include reactive, defensive, accommodative, and pro-active (RDAP) strategies. A proactive
strategy involves doing more than required to address social issues. In an accommodative
strategy, a firm will be less active compared to the proactive state in addressing social issues.
In a defensive strategy, a firm does only the legally minimum things to address social issues.
In a reactive strategy, the firm either fights against addressing social issues or ignores them
(Carroll, 1979; Clarkson, 1991, 1995; Wartick & Cochran, 1985). Generally, the proactive
strategy towards social issue will foreseen managerial attention and resource allocation
become high for such activities as compared to reactive strategy. Other researchers like Terry
McAdam has described four managerial responsiveness towards social issues namely (1)
fight all the way, (2) do only what is required, (3) be progressive and (4) lead the industry
that mesh well with RDAP strategies (Carroll, 1979; McAdam, 1973).

Generally, the managers of the corporation are the ‘moral actors’ within a business
corporation. They are the key person in deciding and executing discretionary business
strategy, action or program that either strictly profit oriented or social oriented. Generally, the
corporation Ethical and Discretionary (or volitional) responsibilities are those about which
society has no clear-cut message and not well defined for managers of the corporation as
compare with economic and legal responsibilities which well defined in corporation’s key
performance indicators and written legal laws. The ethical and discretionary responsibilities
are left to individual judgment and choice (Carroll, 1979).

In the absence of the rules, law or guidance, the every business decision made by corporation
managers will inadvertently influencing and shaping the role of the corporation in area of
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 9

CSR (Wood, 1990). Indeed, the management behavior of the corporation executive will bring
impacts and consequences to corporation as every business decision made by them will affect
the compliance to its societal role in CSR and hence influence the corporation reputation
(Berthoin, 1990).

Carroll (1987) has highlighted that there are generally three types of management behavior
that governs the CSR level of an organization, namely immoral management (management
actively opposed to ethical principles), moral management (management actively conformed
to ethical principles) as well as amoral management (a hybrid style between immoral and
moral management). The senior management has a leadership responsibility in embracing the
concept of moral management in order to initiate a transformation of the corporation
behaviour into any of the above three type of management behaviour. Ackerman (1975)
suggested three characteristics behaviours of a responsive corporation: (a) it monitors and
assesses environmental conditions (b) it attends to the many stakeholder demands placed on
it, and (c) it designs plans and policies to respond to changing conditions. These behaviours
are the important processes for handling information, people and group, and social issues and
events.

2.5 Justification of Adopting Carroll’s CSP Model

Caroll’s CSP model is useful to both academicians and corporate manager (Carroll, 1979).
‘For academics, the model is primarily an aid to perceiving the distinction among definitions
of social responsibility that have appeared in the literature’ (Carroll, 1979, p. 502). For
corporate manager, the CSP model could provide a conceptual insight to corporate manager
to the inter-relating relationship between economic performance and social responsibility and
hence to guide them systematically to think critically in addressing the social issues faced
(Carroll, 1979).

2.6 Suicide Tragedy in Foxconn

From January 2010 to May 2010, there were thirteen production line workers have committed
suicide by jumping from the factory building at Foxconn’s plant in Shenzhen. The tragedy
marks the death of eleven workers and two workers seriously injured (Sacom, 2010). The
death of the workers in Foxconn attracts huge criticisms on the unethical business practice in
the corporation (Chang, 2010). Compare to China’s overall suicide rate, the suicide rate at
Foxconn is not statistically aberrant but the rapid rate of the suicides is unusual (Dean, 2010).
It is important to find out the message sent by the suicide workers in this tragedy.

According to Foxconn, the similarities of these suicide incidents are, the deceased are aged
between 18 and 23, and they are all newly recruits of Foxconn. Further, they are all migrant
workers (China Hush, 2010). This new generation migrant workers are born after 80s and
90s; their resilience and ability to endure hardship is weaker than the previous generation.
Also this generation’s self esteem is more fragile, they feel more pressured and they have
‘big’ dreams for their future. They are struggling in between earn to take care of their family
in hometown as well as save more in order to pursue their ‘dreams’. They are often easily
pressured in this tin-can like factory district. The migrant workers’ dream will disappear
when they are unable to make enough money to return to hometown; they easily become
depress and commit suicide soon become the only ‘way out’ between continue live as ‘ants’
(Liu and Vlaskamp, 2010) in the city or shamelessly back to hometown (China Hush, 2010).
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 10

2.7 Study Questions and Research Justification

2.7.1 Study Question

There are two study questions that attempt to be addressed by this research paper from the
perspective of CSR:-
i. Why there is high incident rate of a string of suicide among the new generations of
China’s migrant workers at Foxconn’s plant in Shenzhen?
ii. How to reduce the frequency of a string of suicide among the new generations of China’s
migrant workers at Foxconn plant in Shenzhen ?

2.7.2 Research Justification

The research paper was carried out with the following justifications:

2.7.2.1 Corporate Image Tarnish

Porter and Kramer (2006) suggested that the socially accepted and recognised CSR practice
by the corporation will enhance the corporation image, strengthen its product branding and
marketing successfulness. String of workers suicide in Foxconn plant not only seriously
affects its corporate image among the local community; but it also tarnishes its business
image before its global business partners who are mostly western based Fortune 500
corporations who uphold the important of CSR practice at its chain of suppliers. The
irresponsible practices in Foxconn will put its global customers under pressure as they are
legitimately be held responsible for the irresponsible CSR practice among their worldwide
supply network (Amaeshi, Osuji & Nnodim, 2008). This will seriously affect Foxconn’s
image as the global contract manufacturer.

2.7.2.2 Increased of Production Cost

Generally, there is a direct linkage between Corporate Social Performance with the
corporation financial performance. There are research shown that both the corporations with
an usually high and low CSR practice will result in higher financial performance against
other corporation; however, the unusually good CSP practice corporation will survive in
relative longer time horizons as compare to unusually poor CSP practice corporation
(Brammer & Millington, 2008; Walter, 1977). The string of suicide incidents has forced the
Foxconn to adopt various utmost urgent measures in curbing the tragedy like employees’
salary increment, set up employee hotline, arrangement of qualified psychologist to handle
workers issue, setting of safety netting around dormitory as well as high compensation has
eroded into the corporation profitability.

2.7.2.3 Relocation of Manufacturing Plant/Production hub

The failure of the company in advocating a socially accepted CSR practice will render the
company to be the target of the government as well as other non governmental interest group
(Wartick & Cochran, 1985). The rejection or the retaliation by the government and local
society will force the corporation to withdraw the operating presence from such territorial
area to prevent further aggravation of the anti company sentiments among the locals. This
will inadvertently posit multiple concerns to the corporation such as increased of investment
cost, high retrenchment for existing employees, high retraining cost for new employee and
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 11

other concerns like rebuilding the business-governmental relationship in new territory,


spending high expenditure on social initiative work to regain the local society acceptance in
new area.

2.7.2.4 Reschedule of Work Progress

The string of worker suicide incidents has also lead to the various protest and demonstration
organized by interest group. The industrial dispute and the pressure from both government
agency and NGOs have lead to Foxconn to review the workers working condition and this
cause an impact to Foxconn’s production schedule.

2.8 Research Objectives

The research objectives of this research paper are:


i. To identify the factors that contributing to the string of suicide among the new
generations of Chinese migrant workers at Foxconn’s plant in Shenzhen, in the
perspective of Corporate Social Performance.
ii. To provide a series of corporate social performance strategies to reduce the string of
suicide among the new generations of Chinese migrant workers at Foxconn’s plant in
Shenzhen.

2.9 Research Proposition

The paper attempts to review Foxconn case in respect of perspective of Corporate Social
Performance model, do management style, employment management and working conditions
contribute to the incident of a string of suicide among the new generation of China’s migrant
workers at Foxconn’s plant in Shenzhen?

3. METHODOLOGY

3.1 Research Design

The researchers have chosen the case study method as research design strategy. The
researchers have carried out a single case study (Yin, 1994) with a MNC (Foxconn) from the
manufacturing sector. Foxconn was chosen in consideration of the important social and
environmental impacts of the problem for the new generations of Chinese migrant worker in
the local communities. Foxconn is a Taiwan-based company, which employs some 820,000
workers throughout China, is the world's largest electronics contract manufacturer by revenue
(Dean & Ting, 2010, p. 2). Moreover, this MNC has strong activities in China, in which
social and environmental demands are very important and specific. Foxconn has depended on
huge numbers of cheap labourers, mainly from rural areas, who has forged an export-oriented
style “world factory” and fueled the rapid growth of the country’s economy.

The case based research can be used to address research problems within the interpretivist
paradigms (Perry, Reige & Brown, 1999). The researchers use interpretivist approach to
identify the reason behind the string of suicide among the new generations of Chinese
migrant workers at Foxconn’s plant in Shenzhen and to explore the possible solution to
reduce the frequency of a string suicide among the new generations of Chinese migrant
workers at Foxconn’s plant in Shenzhen. The researchers noted that Yin’s five components of
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 12

research design that are important for case studies. The five components of research design
comprise of (1) a study's questions; (2) its propositions; (3) its unit(s) of analysis; (4) the
logic linking the data to the propositions, and (5) the criteria for interpreting the findings
(Yin, 1994).

The researchers follow the five components suggested by the Yin’s case study framework as
shown in Table I.

Table 1: Research Design

Component Applicability on this research


Study questions 1. Why there is high incident rate of a string of suicide among the
new generations of China’s migrant workers at Foxconn’s plant
in Shenzhen?
2. How to reduce the frequency of a string of suicide among the
new generations of China’s migrant workers at Foxconn’s plant
in Shenzhen?
Propositions From the perspective of corporate social performance model, do
management style and employee management contribute to the
incident of a string of suicide among the new generations of
China’s migrant workers at Foxconn’s plant in Shenzhen?

Unit of analysis Unit of analysis in this study include:


(a) Foxconn’s management style;
(b) Employee management in Foxconn

Logic linking the Data collection will be focused in exploring the impact of
data to the management style and employee management in Foxconn on the
proposition string of suicide. Documentary review and corporate social
performance model will be adopted in the study.

The criteria for The criteria for interpreting the findings included:
interpreting the 1. “Militaristic” management approach is a society acceptable
findings approach.
2. The workers’ right in respect of their social needs.
3. Number of working hours as stipulated in China Labour
Contract Law.

3.2 Data collection

The document research was conducted within the period from May 2010 to July 2010. A total
of twenty (20) documents were analyzed (among them are journals, articles, magazine,
webpage and newspapers). The researchers have identified the following from these
documents:
(a) Foxconn’s management style
(b) Employee management in Foxconn
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 13

3.3 Data Analysis

The data analysis process is defined by the final two steps: analyzing data; and shaping
challenges and enfolding literature.

Analyzing data: 20 documents were analyzed. From these analyses, the truth of the string
suicide at Foxconn case emerged. This will help to identify the weaknesses in the CSR
practice in the corporation using the CSP model.

Caroll’s CSP model that stresses on 3 dimensions, namely CSR, philosophy of social
responsiveness and social issue involved, will be adopted by the researchers in the process of
evaluating and analyzing the Foxconn’s documentaries to discover the causes of a string of
suicide among the new generations of China’s migrant workers at Foxconn’s plant in
Shenzhen.

4. ANALYSIS AND FINDINGS

4.1 Foxconn’s management style

4.1.1 Analysis

Taiwanese managers are particularly known for their disciplinarian approach in their offshore
factories. The ‘militaristic’ corporate culture in Taiwanese corporation often invoked ‘hard-
working’ spirit as its symbol Corporations include Foxconn in Shenzhen have benefited from
such culture; its economic boom has put its GDP per capital far ahead of most cities in China
(Chan & Wang, 2004; Chou, 2010, p. 6). Foxconn's ‘militaristic’ management style,
including workers have to follow strict orders all day long. They have to do countless
repetitions of the same movements on the production lines. Verbal abuse rains down on them
if they make a mistake. Some have even been beaten up and harassed by security guards for
performing below expected target. Foxconn’s harsh management style creates excessive
stress on workers and led to some of workers to commit suicide (Pang, 2010, p. 1; Dean &
Ting, 2010, p. 3).

Foxconn employs 400,000 workers in Shenzhen. Workers work in various shifts who also
live and eat in the massive factory complex (English News, 2010). Beside providing living
and dining facilities, Foxconn also provides school, hospital, television station, banks, post
office, swimming and shopping mall for its employees. Foxconn provides better facilities and
better benefit to her workers as compare to the majority of corporation worldwide. The
corporation provides free laundry services, free Internet access, sports centers, Olympic-size
swimming pools. The corporation also provides better medical and insurance coverage than
required by law. Workers are also given opportunities to continue their education "to earn
qualifications from high school, college, masters and even PhDs (Chung, 2010, p. 2;
Eskildson, 2010).

According to Foxconn’s Vice President Terry Cheng, 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. He said this latest effort to stop his employees leaping off buildings is part
of a move towards a “more open” style of management. Finally, Foxconn realized that she
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 14

cannot manage half a million workers she has and decided hand over dormitory management
to property management companies (Wilson, 2010, p. 1). In this tragedy, it highlighted that
Foxconn’s management is not sensitive to the changing in the nature of the China’s work
force.

4.1.2 Findings

The authors need to analysis Foxconn management style based on Carroll’s three dimensional
CSP model. Firstly, the authors need to ascertain the breaching of Foxconn’s management
style in relation to the four parts of CSR categories in CSP model. Then, the authors need to
ascertain the social issue created by the Foxconn’s management style. Lastly, the writers will
base on the CSP model to identify the philosophy of social responsiveness applied by
Foxconn in addressing the above social issues.

Foxconn’s decision in providing living and dining facilities, as well as providing better
medical and insurance coverage together with opportunity for higher education to its workers
is exceeding the economic responsibility and legal responsibility categories in the first
dimension. Although the providence of the above amenities and facilities are far beyond any
codified labour law requirements and economic considerations; but it is largely in accordance
to local society expectation. Traditionally, China culture is emphasizing that the employer
should acts to take care of the well being of its workers in order to ensure an intrapersonal
and interpersonal ‘harmony’ to ensure the workers productivity performance.

The social issue involved from the above management style is occupational safety and health
where the providence of the living and dining facilities is to ensure the workers basis living
needs are taken care to exchange for a better work concentration. The philosophy of social
responsiveness applied by Foxconn is accommodative strategy as the corporation provides
workers with better living and dining facilities as well as personal growth opportunity as
compare to the minimum law and legal requirements.

The ‘harsh management’ style in managing the workers such as using violence approach on
workers through the in-house security guards indeed violating the legal responsibility in
accordance to Carroll’s CSP first dimension. The ‘open reprimand’ to workers also violating
the ethical responsibility categories as ‘face saving’ is a general accepted social rules in local
community. The social issues involved under this area will be the discrimination. The
migrant workers are felt being discriminated and exploited by the corporation. Their right and
dignity are not being preserved but rather invaded by the company of which leads to adverse
psychological pressure. The philosophy of social responsiveness applied by Foxconn in these
issues are reactive strategy as it has considered violating the law and legal requirement in
protecting the rights and interests of its workers.

The senior management of a corporation has a leadership responsibility in shaping the


management behaviour of the corporate manager and executives (Ackermen, 1975). The
manager behaviour of the corporate executive will become the driver behind the execution of
CSR in the corporation of which its successfulness will impact its societal role to fulfil the
needs of the society as well as corporation reputation (Berthoin 1990). Foxconn’s
‘militaristic’ management approach means that the freedom and rights of employees to a
certain extent have to be restricted and confined, and inevitably it contravenes mainland
labour law (Chen, 1997). The ‘militaristic’ management approach has seen the workers being
treated more like ‘machine’ rather than ‘human’. As such, Foxconn had failed to meet the
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 15

ethical responsibility in Carroll’s four parts of CSR category as its management practice has
against the society value and expectation.

The manager should acts morally towards the workers (Ozar, 1979; Rawls, 1971). The
manager should not treat the workers as ‘machine’. The workers should be treated with
dignity and respect. In accordance to Carroll’s management behaviour, Foxconn is unable to
consider as a moral manager as every business decision made is still business oriented
although the company provides better living style to the employees. The concern and focus of
the management are outside or beyond the moral order where concentration still lying on
issues such as productivity and profitability. The focus of the corporation in precise cost
management has make the corporation neglect every business decision impacts to its workers
(such as employees right to socialize, needs to be respected and opportunity to growth) which
make Foxconn fall under the category of “Amoral Manager” (Carroll, 1987).

Besides, Foxconn’s ‘militaristic’ style of management also deters the Corporation in


effectively monitoring and assessing the expectation and demands of its employees
(stakeholders) (Akermen, 1975). The failure of the corporation in identifying the changing
needs and demands of the stakeholder (employees) has unable the corporation to device
appropriate and responsive programs and action plan to overcome the grievances of its
employees. Foxconn failure in responding to the employees’ needs and demands has
inadvertently evolved into the string of suicide tragedy in its Shenzhen plant of which has
tarnished its Fortune 500 corporation reputation (Berthoin, 1990). The suicide strings see
pressure from the customers of Foxconn like Apple and Dell as such tragedy may create
consequent to a chain effect to the market of the end products that handled by Foxconn.
Besides, the increasing society reaction towards the suicide tragedy also forces the
intervention of the government to scrutiny the treatment of employees in the corporation
(Clarkson, 1995; Holme, 2010). All the above could directly affect the sustainability of the
corporation.

Although the company provides better living and accommodation to its workers but its
ultimate intention is not for workers well being but rather serve as tool for Foxconn to
monitor and control the movement of workers. Besides, the company desire in getting extra
work hours out of workers also easier when they live in dormitories inside the factory
compound. The living, dining and short traveling distance between factory and dormitory
also enable Foxconn to enforce long stretches of overtime (Chan & Wang, 2004). In view of
the above, in general, Foxconn cannot be classified as a corporate social responsible
organization in view of its ‘unethical’ management approach to its workers, the amoral
management behaviour has failed the corporation in responding to the changing social issues
(worker’s expectation) and managing the needs of its interest and expectations of its
stakeholders in a timely manner (only after the string of suicide tragedy).

4.2 Employee management at Foxconn

4.2.1 Analysis

There are 450,000 workers (migrant workers or second generation of migrant workers with
more than 85% at aged below thirties whom born in the late 1980s and 1990s) house in the
Foxconn Long Hua plant. Foxconn is using different colour uniform to differentiate the
workers from various departments. The workers in Foxconn do not have their own identity
(Kong & Wang, 2010; Chung, 2010, p. 4). Production line workers do not have interaction
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 16

among themselves. The workers with the same uniforms and work in the uniform gesture and
manner indeed make them see their colleagues are the shadows of themselves. The workers
do not have a chance to gather together due to long workings hours and different working
schedule (Chang 2010, p. 3). The workers do not have a chance to share their feelings with
their colleagues.

Foxconn schedules the front line production workers in such a way that they are not able to
meet their roommate and friends from the same province. The workers hardly have a chance
to meet their roommate. They do not know their roommate and the roommate is a stranger to
them. The dormitory merely a place to rest and sleep to the workers. Peer support does not
exist as interaction among workers is virtually zero in Foxconn (Kong & Wang, 2010). If the
worker has difficulties or working pressure, he cannot share his feelings or seek someone for
help to solve his problems. This led to some workers that not able to undertake excessive
work pressure to a tragic end.

The workers earn a wage about 900 yuan a month (Chung, 2010, p. 4; Chang, 2010, p. 2).
This is in tandem with the minimum wage level set by the Shenzhen local government
(CNFOL, 2010). The wage earned unable them to make a decent living as such work
overtime to sustain their basic living is a common behaviour among workers in Shenzhen
(Chung, 2010). However, most of the time, overtime is offered to the reliable workers and to
those have a good relation with the production supervisor and factory manager (Chung, 2010,
p. 4).

4.2.2 Findings

The authors need to analyse Foxconn employee management practice based on Carroll’s
three dimensional of CSP model. Firstly, the authors need to ascertain the employee
management in Foxconn fall under which CSR categories in CSP model. Then, the authors
need to ascertain the social issue created by the Foxconn’s employee management practice.
Furthermore, the writers will base on the CSP model to identify the philosophy of social
responsiveness applied by Foxconn in addressing the above social issues.

The restriction of workers’ right to socialize and communicate has seriously violating the
basic human tolerance level. The arrangement to structurally separate the living and resting
schedule for one worker to others has seriously violating the workers freedom to associate
with peers and friends. Although there is no codified law to address such issue but it is
generally an unacceptable practice in a society that traditionally encourage interpersonal
interaction among peers and friends. This has shown Foxconn do not fulfilling its ethical
responsibility to the society.

The issue involved here will be the discrimination where workers have being discriminated
from its right to socialize and freedom to communicate with others. The restriction of
communication rights has forced some of the workers to take the ‘terminal way’ to resolve
their psychological grievances. Generally, Foxconn is not being sensitive enough to
understand the evolving attitude and social needs of its new generation of migrant workers.
There is no effort by Foxconn to ascertain the impact of its employee management practice to
the state of mind among its workers. The philosophy of social responsiveness applied by
Foxconn in the issue is Reactive strategy where it is trying all the possible means to manage
its workers in order to make them produce to their fullest capacity.
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 17

As for the minimum wages; the issues is on general working environment. Foxconn has
adopted a Defensive Strategy as it is paying in accordance to what the law is expected. The
wages that keep low is in line with the Corporation objective to maximize its financial return
to its shareholder.

Generally, a business corporation is expected to respect the employees right (Donaldson,


1989). Social need is at the third level of hierarch of the needs in Maslow’s Hierarchy of
Needs. These include needs for belonging, love and affection. The corporation should not
restrict and limit the employees’ freedom for association with peers and others as this will
seriously restrain the workers’ basic need (Maslow, 1943a,b). The ‘no interaction’ rule that
enforced at workplace has indeed restricted the workers’ right and freedom to express their
needs and expectation. The systematically manner in dividing the working-resting schedule
among workers with intention to prevent socialization process among workers also seriously
confined the workers’ right and freedom. The lacking of interaction and socialization
opportunity for the workers make them easily feel ‘depress’, ‘helpless’ and ‘tensed up’ as
there is no available occasion for them to share their personal anxieties. This has contributed
to the strings of commit suicide incidents in Foxconn.

Most of Foxconn workers are migrant workers from countryside. Their intention to work in
city like Shenzhen is to make fortune in order to return home gracefully. However, the
compensation scale of which just leveling with the minimum wages set by local governments
is unable to satisfy the present needs and future needs of the employees. The high living cost
in the city as well as family commitment at hometown had further saddened their plan in
return home with sizeable accumulated wealth.

Besides, the migrant workers also find hard to adjust themselves comfortably to the city life
as their ‘simple’ thinking and perception is unable to accommodate them to the complex and
yet challenging living style. Desperation and hopeless in earning enough for future (low pay);
further with the absence of opportunity to be associated and supported by friends and
coworkers has deepen the psychological disturbance among migrant workers. This coupled
with lacking of proper channel for them to seek ‘redress’ has inadvertently leads to the strings
of commit suicide tragedy among the workers.

The employees generally pose the right to social, right to communicate and provide
opportunity to determine their cause of action. However, Foxconn has neglected such rights
and indirectly imposed pressure among the workers particularly in compliance to the
production needs and priority. Foxconn fails to identify and respond on an appropriate scale
and timely manner to the workers’ social needs and expectation (Ackermen, 1975). Although
the corporation set up the appropriate platform for workers to seek redress for their
psychological depression after the string of commit suicide incidents like counseling phone
line and availability of professional trained counselors in handling worker’s problem; but this
is rather too late as the tragedy is irreversible. By large, Foxconn perhaps fulfilling its
economic and legal responsibility to the shareholders and society but the failure of the
corporation to identify, recognize and response to the social problem created by them will
make Foxconn not a CSR corporation (Preston & Post, 1975).
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 18

5. CONCLUSION AND RECOMMENDATION

5.1 Conclusion

5.1.1 Foxconn’s management style

In relation to the providence of living and dining facilities as well as opportunity to personal
growth; Foxconn should maintain the accommodative strategy. The strategy is considered as
an effective tool to gain support from the local society as well as the recognition by the
government on the corporation contribution to the social improvement beside employment.
The acceptance and support from the local society and government will reduce the risk of
expose Foxconn in becoming the ‘target’ of the government and other interest group in terms
of the CSR issues. Furthermore, the writer do not see the ground for further increment of
investment in this area as it will reduce the possible return to its shareholder of which will
affect its economic responsibility.

On the other hand, Foxconn should seriously consider revising its managerial behaviour in
managing the workforce in its Shenzhen plant. The emerging and changing mind set of the
new generation of migrant workers that emphasize on the self and personal improvement and
their desire to build their fortune in the city should be studied thoroughly by the corporation.
The need and expectation of the employees should be taken into consideration for the
employment related policies in Foxconn.

Besides, Foxconn should ensure its in house security guards do not breach their code of
conduct in handling the underperforming workers in a violent manner as this could be
considered a serious breach of human rights. Lastly, the rights and dignity of the workers
should be respected by the management; the workers should be allowed to voice their view
and comment in relation to work related issues.

In consideration of the above, the writer would suggest that Foxconn should adopt the
Accommodative Strategy where proper system and procedure (more than what is required by
the law) should be derived in handling workers’ needs and expectation. The writers are in
opinion that there is a risk for Foxconn adopting a Proactive Strategy although it is ideal in
term of theoretical approach. The Proactive Strategy adopt by Foxconn may lead to more
unreasonable demand from its stakeholders of which may deteriorate its profitability.

5.1.2 Employee management at Foxconn

Foxconn should review its current Reactive Strategy of which aiming at ‘divide and rule’
method. The corporation should recognize the importance of appreciate the basic human
needs for socialization and self actualization. It is rather inhumane practice for isolating the
workers life from peers and friends. Perhaps, Foxconn should adopt an Accommodative
Strategy where workers rights and interest are preserved in accordance not only to the law or
statue but rather in accordance to the society expectation and demand.

Although there is no codified law on how the wages should be derived; but Foxconn should
embark a thorough studies on its wage structure in relations to the living cost in a city like
Shenzhen. Consideration of wage revision should be considered if there is a vast disparity
between the wages and the corresponding cost of living. By doing this, Foxconn will be
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 19

considered fulfilling its ethical responsibility and hence make the company a socially
responsible corporation. As such, Accommodative Strategy is desirable for Foxconn.

5.2 Limitation of study

The scope of this research is limited to the Foxconn’s management style and the employee
management. The researchers do not explore others relevant aspect in this tragedy. This
research is based on commentary and criticism found in various documentary sources. The
researchers have not done any on-site in-dept study to ascertain the detail of the tragedy in
Foxconn. Furthermore, there are limited direct inputs from Foxconn’s management over the
tragedy; the researchers unable to present a holistic perspective on the tragedy as the one
sided input from the society could be biased. The study on the Foxconn’s case may not be
representative for the general working climate, particularly in Shenzhen and generally in
China.

5.3 Recommendation

In short the CSR is no longer being treated ‘lightly’ as some thing ‘supplements’ to the
business operation but rather critical in determining the sustainability and long terms
existence of the business. The CSR expectation is even more important for foreign investors
who venture their businesses in foreign soil which constantly involving in different social
structure, value and expectation following the surge of globalization move in the past few
decades.

Table 2 shows the strategy that adopted by the corporation in responding to the social
responsibility and social issues and recommendation to improve the weaknesses in the current
practice of Foxconn.

Table 2: Current CSR Strategy and Proposed CSR Strategy

Issues CSR Current CSR Strategy Propose CSR Strategy


Category
Management Economic Reactive as the corporation Proactive as the
Style and Legal chooses to ignore the social corporation needs to
issue ensure the needs and
expectation of the workers
are fully complied with in
order to create a happier,
contended and productive
workers
Employee Economic, Accommodative as the Proactive as corporation
Management Legal and corporation do more than needs to be sensitive on
Ethical requirement by the norms the respect and
and law by providing better recognition the right and
living and dining facilities need of the workers to
but the corporation less social and resting.
active in anticipating the
socialization needs of the
employees
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 20

6. REFERENCES

[1] Ackerman, R. W. (1975). The Social Challenge to Business. Cambridge, MA: Harvard
University Press.
[2] Ackerman, R. W. & Bauer, R. A. (1976). Corporate Social Responsiveness, Reston,
Virgina: Reston Publishing.
[3] Agence France-Presse. (2010, June 14). China's Foreign Direct Investment Jumps;
Retrieved June 22, 2010, from Industry Week website:
http:// www.industryweek.com/readarticle.aspx?ArticleID=22024.
[4] Amaeshi, K, Osuji O K, & Nnodim P. (2008). Corporate Social Responsibility In Supply
Chains Of Global Brands: A Boundary Less Responsibility? Clarifications, Exceptions
and Implications. Journal of Business Ethics, Iss. 81, pp.223-234.
[5] Berthoin, A. A. (1990). Corporate Social Performance: Rediscovering Actors and Their
Organizational Context, Unpublished Doctoral Dissertation, Technical University,
Berlin.
[6] Brammer, S. & Millington, A. (2008). Does It Pay To Be Different? An Analysis Of The
Relationship Between Corporate Social And Financial Performance. Strategic
Management Journal, No.29, pp.1325-1343.
[7] Buchholz, R. A. & Rosenthal S.B. (2004). Stakeholder Theory And Public Policy: How
Governments Matter. Journal of Business Ethics, Vol. 51, Iss.2, p.143.
[8] Carroll, A. B. (1999). Corporate Social Responsibility: Evolution of A Definitional
Contrast. Business and Society, September 1999, 38, 3, pp.268-295.
[9] Carroll, A. B. (1991). The Pyramid Of Corporate Social Responsibility: Toward The
Moral Management Of Organizational Stakeholders. Business Horizon, July-August
1991, pp.39-48.
[10] Carroll, A. B. (1987). In Search of Moral Manager. Business Horizon, March to April
1987, pp.9-11.
[11] Carroll, A. B. (1979). A Three-Dimension Conceptual Model Of Corporate Social
Performance. Academy of Management Review, 4, pp.497-506.
[12] Chan, A. & Wang, H. Z. (2004). The Impact Of The State On Workers’ Conditions –
[13] Comparing Taiwanese Factories In China And Vietnam. Pacific Affairs, Vol. 77, No.4
(Winter, 2004/2005), pp. 629-646, Retrieved July 1, 2010,
http://www.jstor.org/stable/40023535.
[14] Chan, J. (2010, June 3). Foxconn Suicide Highlight China’s Sweatshop Conditions.
Retrieved June 23, 2010, from World Socialist website:
http://www.wsws.org/articles/2010/jun2010/foxc-j03.shtml
[15] Chang, C. (2010, May 19). The Real Truth Behind Foxconn’s Suicide Cluster. Retrieved
June 20, 2010, from M.I.C. Gadget website:
http://micgadget.com/3793/the-real-truth-behind-foxconns-suicide-cluster/.
[16] Chen, M. J. (1997). 大陸員工該如何管理最合當?大陸台商經營管理頭疼問題範導
Taiwan Xiexun (Taian Footwear Industry Bulletin), October 1997, pp.62-64.
[17] China Daily, (2010, July 23). Foxconn Threatens To Review Investment In Taiwan.
Retrieved June 23, 2010, from China Daily website:
http://news.asiaone.com/News/Latest%2BNews/Asia/Story/A1Story20100723-
228450.html
[18] China Labour Bulletin (2008, June 6). “Migrant Workers in China”. Retrieved 18 July
2010 from China Labour Bulletin website:
http://www.chinalabour.org.hk/en/node/100259.
[19] China Labour Contract Law 2010. Retrieved July 19, 2010, from Laodong66.com
website: http://www.laodong66.com/ldfg/gjfg/225755861_1.html.
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 21

[20] Chou, J. (2010, May 26). CRS Asia: Corporate Social Responsibility in Asia Business
Solution for Global Challeges- From Dafen Lisa to Foxconn: Two tales of migrant
workers. CSR Asia Weekly, Vol.6, Week 21, pp. 6-7. Retrieved June 20, 2010, from
http://www.csr-asia.com/upload/cover/238048331306.pdf
[21] Chung, O. (2010, May 22). Foxconn Suicide Toll Mounts. Retrieved July 6, 2010, from
Asia Time Online website:
http://www.atimes.com/atinesshttp://www.atimes.com/atimes/China_Business/LE22C
b01.html
[22] China Hush (2010, May 12). Why Do Foxconn Employees Keep Jumping Off
Buildings? Retrieved June 20, 2010, from China Hush website:
http://www.chinahush.com/.../why-do-foxconn-employees-keep-jumping-off-buildings/
[23] Clarkson, M. B. E. (1991). Defining, Evaluating, And Managing Corporate Social
Performance: The Stakeholder Management Model. Preston, L.E. (Ed.), Research in
Corporate Social Performance and Policy, JAI Press, Greenwich, CT, pp.331-58.
[24] Clarkson, M. B. E. (1995). A Stakeholder Framework For Analyzing And Evaluating
Corporate Social Performance. The Academy of Management Review, Vol 20, No.1 (Jan
1995), pp.92-117.
[25] CNFOL (2010). 深圳最低工资增至1100元. Retrieved July 18, 2010, from CNFOL
website: http://news.cnfol.com/100610/101,1281,7841989,00.shtml.
[26] Corporate Social and Environmental Responsibility Report - Foxconn Technology Group
(2008). Retrieved June 26, 2010, from http://www.foxconn.com/CSR_REPORT.html.
[27] Davis, K. (1960). Can Business Afford To Ignore Social Responsibilities? California
Management Review, 1960, pp.70-76.
[28] Dean, J. & Ting, I. T. (2010, May 27). Suicides Spark Inquiries: Apple, H-P to Examine
Asian Supplier After String Of Deaths At Factory. Retrieved May 29, 2010, from The
Wall Street Journal website:
http://online.wsj.com/article/SB10001424052748704026204575267603576594936.html.
[29] Donaldson, T. (1982). Corporations And Morality. Englewood Cliffs, NJ: Prentice Hall.
[30] Donaldson, T. (1983). Constructing A Social Contract For Business. In T. Donaldson &
P.Werhane, (Eds.) Etchical Issues in business (2nd ed., pp 153-165) Englewood
Cliffs,NJ : Prentice Hall.
[31] Donaldson, T. (1989). The Ethics of International Business, Oxford University Press,
New York, NY.
[32] Eells, R. & Walton, C. (1961). Conceptual Foundations of Business, Homewood, III :
Richard D. Irwin.
[33] English News (2010, May 25, pp.1-2). Another Foxconn Employee Falls To Death At
Shenzhen Factory; Note Found. Retrieved June 10, 2010, from English.news.cn.
website:http://news.xinhuanet.com/english2010/china/201005/25/c_13313857_2.htm.
[34] Eskildson, L. E. (2010). Foxconn’s Wealth Growing, Workers Sinking. Retrieved June
20, 2010, from Trading Market.Com website: www.basilandspice.com/.../62010-
foxconns-wealth-growing-workers-sinking.html
[35] Foroohar, R (2010). Beyond A Boom. Newsweek, June 28-July 5 2010, pp.24-25.
[36] Foxconn Group Profile (2007). Retrieved July 23, 2010, from,
http://www.foxconn.com/companyintro.html
[37] Frederick, W. C. (1978). From CSR1 To CSR2 : The Maturing Of Business And Society
Thought. Working Paper No.279, Graduate School of Business, University of Pittsburgh.
[38] Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach, Pitman
Publishing, Boston, MA.
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 22

[39] Frideman, M. (1970). The Social Responsibility of Business To Increase Its Profits. New
York Times, September 13, 1970, pp.122-126.
[40] Galbreath, J. (2009). Building Corporate Social Responsibility Into Strategy. European
Business Review, Vol. 21, No.2, 2009, pp.109-127.
[41] Galbreath, J. (2006). Does Primary Stakeholder Management Positively Affect The
Bottom Line? Some Evidence From Australia. Management Decision, Vol. 44 No. 8,
pp.1106-1121.
[42] Hay, R. D., Gray, E. R. & Gates, J. E. (1976). Business And Society. Cincinnati:
Southern Publishing.
[43] Holme, C. (2010). Corporate Social Responsibility: A Strategic Issue Or A Wasteful
Distraction? Industrial and Commercial Training, Vol 42, No.4, pp.179-185.
[44] Holmes, S. L. (1976). Executive Perceptions Of Corporate Social Responsibility,
Business Horizons, 19(3), pp.34-40.
[45] Hooley, G., Cox, T., Fahy, J., Shipley, D., Beracs, J., Fonfara, K. and Snoj, B. (2000).
Market Orientation In The Transition Economies Of Central Europe: Tests Of The
Narver And Slater Market Orientation Scales. Journal of Business Research, Vol. 50
No.3, pp.273-85.
[46] Kearney, A. T. (2010). The 2010 A.T. Kearney FDI Confidence Index. Retrieved June
22, 2010, from Atkearney website: http:// www.atkearney.com/index.../foreign-direct-
investment- confidenceindex.html
[47] Kong, Y. Z. & Wong, Z. X. (2010). Failure Of Autocratic Management, The Challenges
of Managing the New Generation of Migrant Workers: Foxconn. Commonwealth
Magazine, vol 448, 2 June 2010-15 June 2010, pp.36-38.
[48] Liu, M. and Vlaskamp M. (2010). Smart, Young, and Broker : White-Collar Workers
Are China’s Newest Underclass. Newsweek, June 28 & July 5, 2010, p.1
[49] Maslow, A. H. (1943b). A Theory Of Human Motivation, Psychological Review 50,
370-96.
[50] Maslow, A.H. (1943a). Motivation And Personality. New York: Harper. Matten, D. &
Crane, A. (2005). Corporate Citizenship: Toward An Extended Theoretical
Conceptualization. Academy of Management Review, Vol. 30, No.1, pp.166-179.
[51] McAdam, T. W. (1973). How To Put Corporate Responsibility Into Practice. Business
and Society Review/Innovation, Vol.6, pp.8-16.
[52] McGuire, J. W. (1963). Business And Society, New York : McGraw Hill.
[53] Moxley, M. (2010). Spate Of Factory Suicides Exposes Sorry Plight of Workers.
Retrieved June 25, 2010, from IPS website
http:// ipsnews.net/news.asp?idnews=51794.
[54] O’Brien, K. (2005). Golin Study: Staff Playing Major Role In CSR Comms, PR Week,
Vol. 8 No. 26, p. 5.
[55] Ozar, D. (1979). The Moral Responsibility Of Corporations. In T. Donaldson & P.
Werhance (Eds.) Ethical Issue in business (1st ed., pp. 294-300) Englewood Cliffs NJ:
Prentice Hall.
[56] Pang, L. (2010). Salary Hikes Are Not The Answer; Foxconn Needs A Management
Overhaul. Retrieved July 9, 2010, from China.org.cn. website:
http://www.china.org.cn/opinion/2010-06/08/content_20208329.htm.
[57] Perry, C., Riege, A. & Brown, L. (1999). Realism’s Role Among Scientific Paradigm In
Marketing Research. Irish Marketing Review, 12(2), pp. 16-23.
[58] Porter, M. E. & Kramer, M. R. (2006). Strategy And Society: The Link Between
Competitive Advantage and Corporate Social Responsibility. Harvard Business Review,
Vol. 84, No. 12, December, pp. 78-92.
JOURNAL FOR THE ADVANCEMENT OF SCIENCE & ARTS, VOL. 2, NO. 1, 2011 23

[59] Preston, L.E. (1975). Corporation And Society: The Search For A Paradigm. Journal of
Economic Literature, 13, pp.434-453.
[60] Preston, L. E. & Post J. E. (1975). Private Management And Public Policy, Englewood
Cliffs, NJ : Prentice-Hall, p. 52.
[61] Rawls, J. (1971). A Theory Of Justice. Cambridge, MA: Harvard University Press.
[62] Rawski, T G. (1999). Reforming China’s Economy: What Have We Learned. The
Chinal Journal, No.41, Jan, 1999, pp. 139-156.
[63] Sacom (2010, May 18). Appeal By Sociologists: Address To The Problems Of New
Generations Of Chinese Migrant Workers, End to Foxconn Tragedy Now. Retrieved
June 22, 2010, from Sacom website: http://sacom.hk/archives/644.
[64] Sethi, S.P. (1975). Dimensions Of Corporate Social Performance: An Analytical
Framework. California Management Review, 17(3), pp58-64.
[65] The Union of Concrened Executives. The Economicst, Vol 374, No. 8409, January 22,
2005. US Edition, Survey Insert: The Good Company
[66] Walters, K. D. (1977). Corporate Social Responsibility And Political Ideology.
California management review, 19(3), pp.40-51.
[67] Wartick, S. L. & Cochran, P. L. (1985). The Evolution Of The Corporate Social
Performance Model. Academy of Management Review, vol. 10, no. 4, pp.758–769.
[68] Wilson, D. (2010). Foxconn To Hand Over Dormitory Management To Outsiders.
Retrieved July 9, 2010, from Tech Eye Net website:
http://www.techeye.net/hardware/foxconn-to-hand-over-dormitory-management-to-
outsiders.
[69] Wood, D. J. (1991). Corporate Social Performance Revisited. The Academy of
Management Review, Vol 16 No4 (Oct 1991) pp.691-718.
[70] Wood, D. J. (1990). Business And Society, Glenview, IL: Scott, Foresman (Harper
Collins)
[71] Wood, D. J. and Jones, R. E. (1996). Research in Corporate Social Performance. What
have we learned? Corporate Philanthropy at the crossroads, ed. D.R. Burlingame and
D.R. Young (Bloomington, Ind.: Indiana University Press): pp.41-85.
[72] Yin, R. (1994), Case Study Research: Design And Methods (2nd ed.), Beverly Hills, CA:
Sage Publishing.

Dr. Kwek Choon Ling received his B.Mgt (Marketing), M.B.A. (International Business) and
D.B.A. from the University of South Australia (Australia), the Charles Sturt University
(Australia) and University of New Castle (Australia) respectively. Currently, he is Senior
Lecturer in the Faculty of Management and Information Technology at UCSI University,
Kuala Lumpur. His areas of interest are consumer behaviour, services marketing, internet
marketing and strategic brand management.

You might also like