Foxconn's business pressures all stem from the incredibly low price they offer to the OEMs they do
Question:
Foxconn's business pressures all stem from the incredibly low price they offer to the OEMs they do business with. Their order from Apple, for example, resulted in almost zero profit. In order to maintain a business model that supports offering such aggressively low prices, Foxconn created a work environment that many outside of the Chinese workforce would consider unethical. Between low pay, 10+ hour workdays, and poor working conditions, it's easy to see just how Foxconn was able to offer such low prices to the OEMs who ordered from them. But these conditions, factored in with extremely strict management created a toxic work environment for many employees at Foxconn.
This problem, however, isn't completely unique to Foxconn. The EMS industry, along with plenty of other industries that operate predominantly in Asian countries, faced a similar problem in cutting potentially ethical corners in order to attract international business with their low labor costs. In fact, working at Foxconn was actually something that the working class in China held in high regard, at least from an outsider's perspective. In fact, many of the Foxconn employees didn't seem to realize the reality of their situation until it was too late, especially those who specifically moved to Shenzhen to work there, and were now living in the same room as 8-10 other employees in a corporate dormitory. They weren't making enough money to leave the company and move elsewhere, resulting in feelings of pressure and entrapment. As a result, some employees began taking their own lives in 2007, with more following suit in 2009.
Once the media began covering the suicides at Foxconn, their business pressures were put on display for the world to see. With large OEMs like Apple launching their own investigation into the matter, it was clear that Foxconn needed to change how its coworkers were treated. There were some good measures taken, such as nearly doubling their employees' wages, but then there were a few empty gestures as well, such as having their employees sign a "no suicide" pledge and installing nets around building tops to prevent fatal falls from anyone who would try to jump. Personally, I think a better solution would be to tackle the root cause and eliminate what's actually causing the employees to feel such pressure in the first place. This could be done in a number of ways, by allowing more breaks, reducing the overall number of hours per workday, and by having less strict management. However, even with the few changes Foxconn did implement, their stock price plummeted, since the higher wages would result in them having to charge a higher price to their customers. Foxconn is not without its problems, but this really does show that the problems at large stem from the overall market and the many pressures associated with operating in it.
Do you agree with these paragraphs? If yes, please answer in detail and original and explain why?