Wal-Mart and Foxconn Companies’ Workforce Management Case Study

Unethical labor practices

• The manner in which Wal-Mart handles its employees constitutes unethical labor practices because it provides precarious work, low wages, poor working conditions, unreliable work, limited social protection, and without unionization.
• As an international supply chain, Wal-Mart has over 2.1 million employees globally and generates over $400 billion of revenue annually. Most of the employees, who are predominantly female workers, work in export processing zones and retail stores of Wal-Mart in South Asia, Central America, China, and other regions as cashiers, sales clerks, and storekeepers.
• These employees endure unethical labor practices because Wal-Mart does not comply with the labor legislation, rules, and policies as expected.
• For instance, the management of Wal-Mart holds that they have to obtain cheap labor from the employees so that it can afford to offer cheap products to customers (Lichtenstein 15).
• Given that labor comprises 65% of controllable overheads, Wal-Mart focuses on reducing these costs by paying workers poorly and suppressing their dues.

“When Wal-Mart or one of the other big firms wants to reduce the size of its workforce, the company avoids a formal layoff and the unemployment compensation costs that come with it. Instead, it just slows its hiring for while and waits for normal turnover to reduce the labor force. Or the big retailers slash hours, which immediately reduces their labor cost and soon generates a wave of pseudo-voluntary goodbyes” (Lichtenstein 19).

• Owing to unethical labor practices, the turnover rates of managers, assistant managers, sales workers, and part-time sales workers are 30%, 60%, 120%, and 240% respectively.

Contemporary Example

• The case of exploitation of workers came to fore in 2010 when 18 employees of Foxconn attempted to commit suicide owing to the frustrations emanating from unethical labor practice (Chan 28). Chan and Pun add that, “a startling 13 young workers attempted or committed suicide at the two Foxconn production facilities in southern China (1). Foxconn is a notorious manufacturer and supply chain in China that deals with the manufacture and supply of electronic products.
• The unethical labor practices revolved around managerial practices, labor process, and work organization in Foxconn.
• In the aspect of managerial practices comprised aristocracy, authoritarian, and high-handiness, hence, compelling migrant Chinese workers to submit to their managers without questioning their exploitative orders.
• The labor process was so demanding for the Chinese employees worked continuously so that they can meet hourly production targets without having any time to rest and socialize (Chamberlain par. 5).
• According to a suicide survivor, who was an employee of Foxconn, a normal day routine comprises 12 hours together with overtime that the managers impose illegally (Chan 36).
• Foxconn organized work into simple tasks that employees can complete within the shortest time possible, for instance, sticking a label on a product within two seconds. Such demanding and daunting tasks pressured and predisposed employees to occupational stress; hence, making them nurture suicidal feelings.
• Since Foxconn deals with the manufacture of iPad and iPhones, Duhigg and Barboza state that they are products of unethical labor practice because employees work in harsh conditions, during overtime, and seven days a week (par. 6). The harsh working conditions evident as employees stay in crowded dorms, stand for many hours, work in unsafe conditions, and endure hard labor in a bid to meet strict product deadlines.
• Foxconn violates the rights of workers to safety, health, and free from any form of abuse. Regarding safety issues, “Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77” (Duhigg and Barboza par. 9).
• To obtain cheap labor, which they can exploit easily, Foxconn used child labor in the manufacture of its products. In some instances, human rights activists have accused Foxconn of employing child labor in its production system and chain supply. According to Pilisuk and Rountree, Foxconn coerced students to assemble iPhones with a view of alleviating worker shortages emanating from constant strikes.
• Apple focuses on reducing production costs by exploiting workers and increasing the quality of phones it produces. In this view, Foxconn overlooked the safety, health, and the abuse of workers in the industry.
• As one of the leading employers in China with about 1.2 million employees, Foxconn has been in the limelight for unethical labor practices.
• Labor movements and human rights activists have engaged Foxconn in labor disputes following the revelation that they offer harsh working conditions and violates labor practices. According to Pilisuk and Rountree, “the presence of violence, unrest, and strikes amongst employees at Foxconn has increased dramatically after additional pressure was applied to meet manufacturing goals and production deadlines for the Apple iPhone 5” (90).
• Overall, established unethical labor practices are “crowded working conditions, underage workers, illegal amounts of overtime, improper disposal of waste, and industrial accidents” (Pilisuk and Rountree 91)

Works Cited

Chamberlain, Gethin. “Apple’s Chinese workers treated ‘inhumanely, like machines.”The Guardian. 2011. Web.

Chan, Jenny. “A suicide survivor: The life of a Chinese migrant worker at Foxconn.” New Technology, Work, and Employment 28.2 (2013): 84-99. Print.

Chan, Jenny, and Ngai Pun. “Suicide as Protest for the New Generation of Chinese Migrant Workers: Foxconn, Global Capital, and the State.” The Asia-Pacific Journal, 8.37 (2010): 1-33. Print.

Duhigg, Charles, and David Barboza. “In China, human costs are built into an iPad.” The New York Times. 2012. Web.

Lichtenstein, Nelson. “In the Age of Wal-Mart: Precarious Work and Authoritarian Management in the Global Supply Chain.” Globalization and Precarious Forms of Production and Employment: Challenges for Workers and Unions. Ed. Carole Thornley, Steve Jefferys, and Beatrice Appay. London: Edward Elgar Publishing, 2010, 10-21. Print.

Pilisuk, Marc, and Jennifer Rountree. The Hidden Structure of Violence: Who Benefits from Global Violence and War. New York: Cengage Learning, 2015. Print.