This paper aims to discuss the controversy that occurred in Taiwanese Company Young Fast Optoelectronics (YFO). This enterprise is a supplier of such leading international corporations as Samsung, HTC, Google, and LG.
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In March 2010, the management of YFO dismissed more than ten union members, who protested against poor working conditions in the factory and illegal practices, pursued by the management of the company. Afterwards, it was also discovered that the YFO employees had to work overtime without any compensation and that the company hired students who did not reach the age of sixteen (Good Electronics, 2010, unpaged).
This scandal attracted the attention of the government and international trade union organizations. Several stakeholders are involved in this argument: 1) the workers of this manufacturing facility and trade unions; 2) the management of YFO; 3) the government of the country, and 4) international companies, supplied by YFO.
Overall, it is possible to argue that this one of those case when ethical principles and legislation contradict each other. Domestic laws do not explicitly forbid sweatshop practices and, the government has very few legal means of influencing the decisions of the management; more likely the governmental officials are unwilling to intervene into the affairs of YFO.
However, such companies as Google or HTC try to be or at least appear responsible corporate citizens and they certainly do not want to be associated with the supplier that abuses the rights of its employees. In this essay we need to discuss the arguments, made by each party involved in this controversy and evaluate them from different moral perspectives, like Utilitarianism and Kantian ethics. These ethical theories can be used as effective tools to assess the behavior of private and public organizations.
The argument, made by various stakeholders
In order to discuss this conflict of interest, one should first understand the controversial nature of sweatshops. This is one of those social phenomena that existed virtually in every country, even in advanced economies at a certain point of time. Certainly in such countries as the United States, the United Kingdom, or Germany they disappeared in the first half of the twentieth century, as the quality of living improved and private businesses could no longer dictate their terms to the workers (Balonze, 2004).
However, in developing countries such practice is still very widespread because the bargaining power of workers is not strong enough and they cannot choose from a great variety of employers. One should also bear in mind that Asian economies are growing at such a rapid pace mostly due to the cheapness of labor, and the governments of these countries are not particularly interested in the eradication of sweatshops.
The thing is that the adoption of stringent labor laws may eventually force international investors out of the country (Balonze, 2004, p 77). The most dangerous thing is that a great number of people can lose their only source of income, if the local labor legislation is changed. This ambiguous nature of sweatshops is the main reason why this case is contradictory.
Naturally, one should not assume that the government cannot do anything to stop this exploitation of employees, for example, they can impose fines on YFO. Yet, the problem is that it will be easier for the management to pay these fines rather than adopt a new attitude toward workers. Under the circumstances, the government is guided by utilitarian ethics.
According to this doctrine, every action which promotes the well-being of the entire community can be justified, even if they harm a limited group of people (Gensler et al, 2004 unpaged). They may defend their policies by arguing in the following way: if government increases pressure on the management of YFO, the company will have to reduce the volume of its output or even worse, its services will no longer be required by the international corporations like LG, Samsung, and Qualcomm.
In the long term, it may result in the reduction of the staff. So, to some extent, utilitarianism or consequentialism, as it is also known, can be used to justify their argument. Still, one should not suppose that utilitarianism is the only way of looking at this problem.
For instance, if one applies Kantian interpretation of moral, the governmental policies will no longer seem morally permissible. It should be taken into consideration that Kantian ethics also emphasizes the motives, underlying any action, rather than its consequences (Sullivan, 1994). This ethical theory postulates that in order to determine the moral worth of any action or behavior a person should think of what would happen if this behavior becomes universal (Sullivan, 1994).
In other words, one should think of what would happen if sweatshop became the most widespread type of workplace and the employers received a chance of exploiting workers with impunity. It seems that in this case the quality of living in Taiwan will greatly deteriorate. Therefore, from this viewpoint, the government’s indifference is morally impermissible and even harmful to the community. This discussion shows that the same action can have various moral and ethical interpretations.
The management of Young Fast Optoelectronics and the company’s partners
The management of Young Fast Optoelectronics also takes a utilitarian approach to this problem. They are primarily concerned with financial and operational performance of the enterprise, rather than well-being of the employees. They argue that by raising labor standards in the organization, for instance by paying additional compensation to the employees and reducing the working hours, they will make the company less attractive to their foreign partners. Moreover, they will be forced to dismiss a great number of workers.
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To some degree, they follow a rule, formulated by Nicolo Machiavelli who argued that “the ends justified the means” (Benner, 2009, p 359). The core principle of this philosophy is that even an immoral action can be acceptable, if it will contribute to the common good (Benner, 2009).
Under the circumstances the notion of common good can be understood as financial and operational performance of the company. One should not forget that over the last several years, the value of the company’s stock has risen dramatically, and each of the administrators, engineers and supervisors received a bonus, whereas workers were not compensated for their effort in any way (Good Electronics, 2010, unpaged).
Therefore, we can argue that the policies of the management cannot be justified even from utilitarian perspective. Utilitarian ethics set stress on the fact that the action is moral only if it benefits the majority, rather a limited group of people, while in this case, the workers, who represent the majority, are put in an underprivileged position.
Kantian ethics also does not enable us to vindicate such strategies because they have nothing to do with moral duty and with concern for people’s welfare; more likely, this is just a pursuit of profit. Actually, it is very difficult to find any ethical theory that would help the management of YFO to defend their position because virtually every ethical theory strongly relies on the so-called golden rule, according to which one should treat others as he/she wants to be treated.
As it has been mentioned before, YFO is a leading supplier of such internationally-known corporations as Qualcomm, LG, Samsung and so forth.
They prefer the services of this organization because it provides the best price-quality ratio; however, they do not pay much attention to the human resource management of YFO. Again, from legal standpoint, they are not obliged to do it. However, many of them emphasize their responsible corporate behavior, while this indifference to the needs of Taiwanese workers can really tarnish their public image.
These stakeholders also adopt utilitarian point of view to this problem because the main purpose of these international corporation is the maximization of revenues, and partnership with YFO is probably the best way to do it. Nonetheless, in the long term such strategy can significantly affect their profitability because more and more people, living in advanced countries, are growing more aware such notion as ethical consumption, and they pay attention to the environmental and human resource policies of the enterprise.
Finally, we need to speak about the most important group of stakeholders, the employees. In part, we have already presented their argument: they believe that despite the improvement of company’s performance, they felt no positive change (Good Electronics, 2010, unpaged).
Furthermore, they claim that the management entirely disregards their civil rights. One of the workers formulates his complaints in the following way: “I wonder why all the glory always goes to the top tier of the company, while the workers at the bottom, who sacrificed our health and our time with the family, are always maltreated and ignored?” (Good Electronics, 2010, unpaged).
Their choice is very limited: they can either comply with managerial demands or leave the company and lose the only source of revenue. The most unfortunate thing is that domestic laws do not protect these people properly, and the only group that can really support them is international companies which collaborate with Young Fast Optoelectronics. The management of YFO does want to such partners, and they will, certainly pay attention to the opinion of these companies.
Overall, this case exemplifies one of the greatest moral dilemmas, faced by modern companies which now can operate in globalized environment. On the one hand, the erasure of national borders and absence of any restrictions on free trade give them a good opportunity to maximize their profits. Yet, very often this improved performance is based on the exploitation of workers, who are put almost in subhuman conditions.
As it has been shown in the previous section, several ethical approaches can be used to solve this dilemma, and we can say neither Utilitarianism nor Kantian ethics can give a loophole for justifying these policies; this includes each of the stakeholders: the local government, the management of YFO, and international partners of this company. The most dangerous thing is that there are very few ways of influencing these people.
Still, it should be borne in mind that nowadays such notion as ethical consumerism is becoming more and more popular. It means that modern customers can boycott the products of those manufactures which do try to meet the employees’ demands and even exploit these people as it is done by the management of YFO (Guido, 2009). The key issue is that consumers, who live in advanced countries, may refuse to buy the mobile phones, produced at the factories of Young Fast Optoelectronics.
This will certainly have an adverse effect the bottom line of many companies that are closely connected with Young Fast Optoelectronics. Therefore, it is possible for us to say that this exploitation of Taiwanese workers is not only immoral, but it may also be economically unsound. This is why Taiwanese government as well as the partners of YFO should force the management to hear the voices of employees and address their needs.
The application of various ethical theories to organizational conflict helps to better understand the reasoning and policies of private businesses. More importantly, the use of these theories can assist us in finding solutions the conflicts which occur between the management of the company, its employees, and the government.
The case that has been analyzed illustrates that the globalized economy gives almost unlimited freedom to private organization. Unfortunately, this freedom is frequently abused by the management, as it is done in Young Fast Optoelectronics. Ethical consumerism and responsible corporate behavior are the only methods of affecting such businesses and forcing them to improve the working conditions.
Balonze J. 2006. Debating Globalization. London: Gyan Publishing House.
Benner. E.2009. Machiavelli’s ethics. Princeton: Princeton University Press.
Gensler. H. Spurgin E. Swindal J. 2004. Ethics: contemporary readings. London: Routledge.
Good Electronics. 2010. “Taiwanese electronics workers fight for their rights”. Accessed from https://goodelectronics.org/taiwanese-electronics-workers-fight-for-their-rights/
Guido. G. (2009) Behind Ethical Consumption: Purchasing Motives and Marketing Strategies for Organic Food Products, Non-Gmos, Bio-Fuels. NY: Peter Lang.
Sullivan. R. 1994. An introduction to Kant’s ethics. Cambridge: Cambridge University Press.
Trade Union of Young Fast Optoelectronics. 2010 Fact Sheets Regarding the Struggle of Young Fast Optoelectronics Trade Union (YFOTU). Retrieved from: http://yfotu.blogspot.com/2010/04/fact-sheets-regarding-struggle-of-young.html