Foxconn Sustainability Analysis

INTRODUCTION

Sustainability is a concept that have been widely discussed since the publication of United Nation’s World Commission Environment and Development report in 1987. The idea of sustainability in the business context looks at the integration of economic, social and ecological impact within a business and all of its activities.

This report will identify and gauge the authenticity of initiatives that Foxconn implement within their business activities with regards to the 3 dimensions of sustainability (economic, social and ecology). The relationship between these three dimensions and as to whether Foxconn had achieved any form of balance between the three will also be discussed.

This report will proceed to identify the contribution of the above initiatives towards the enhancement of positive environmental, social and human outcomes for Foxconn’s human resources. Finally, it will also discuss on whether these initiatives would differ in terms of outcome as well as the feasibility to implement them in the context of non-profit organisations (NPOs).

SUSTAINABILITY PRACTICES IN FOXCONN

Currently being the biggest player in the Electronic Manufacturing Services (EMS) industry, Foxconn achieved that status not by mere luck or coincidence but rather though exemplary economic sustainability practices. One of the main factor for their success is through the expansionary move to include additional business function as an Original Equipment Manufacturer (OEM). In addition, the Taiwanese based company also outsource their primary operations to mainland China. This could be seen as a genuine business sustainability practice which in turn lead to profit maximisation, cost reduction as well as maximum operating efficiency. All of which contributes towards the sustainability of Foxconn within the industry.

In 1995, Foxconn took the initiative to develop Longhua Science and Technology Park which includes centralised assembly lines, employee dwellings, restaurants and other basic necessity infrastructures in a move that could be interpreted as creating a sustainable work environment for their business. This kind of initiative also had a deep impact on the living and mental state of the local community by creating job opportunities and local infrastructure enhancements. That being said, it is unlikely that the motivation behind this initiative was purely focused for the benefit of the local community. Foxconn’s strategy in the first place was profit driven as most other large firms’ normal creed (Kolstad 2007).

Despite strong alleged claims on Foxconn’s involvement with sweatshop operations, they do practice standard employee welfare procedures by providing their employees with employment contracts, various subsidies or perks and the option to live in rent-free company dormitories. Although this could be seen as employee welfare based initiative, the motives are somewhat questionable. This is indicative by the level of effort by Foxconn in these areas of initiative where low standards of living are apparent throughout their facilities. Furthermore, the rate of pay for their employees are just barely enough for them to sustain their daily living costs. Foxconn did increase the wages after the suicide incidents which again raises the question whether these efforts are genuine in the first place or just means to a business profit end.