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Cultural Diversity in the Workplace in Different Countries Wanlin Tsai Kutztown University of Pennsylvania

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Abstract This project probes into cultural differences in the workplace that affect human resources management of multinational companies. Take electronic manufacturing industry as example, this project brings up the case of Foxconn to discuss the labor and human rights in China. Foxconn Technology Group, of which Hon Hai is the flagship, is the largest electronics factory in the world. The crisis at Foxconn reveals several problems of working condit io ns in Chinas current model of economic development, based on low wages, lo ng working hours, and discriminat ion against rural migrant workers. City leaders have been pressured by national officials, the All-China Federation of Trade Unions (ACFTU), or even non-governmental organizations (NGOs) that increasingly monitor and protest against abusive conditions in the plants. However, regulations are commonly ignored at the local level. This case reveals the poor labor practices of Foxconn in China. In the electronics industry, this multinational company has different policies in human resources management in different countries. The reason of the differences in management is due to cultural differences. Unions and governments play critical roles in influencing on the working conditions of local companies.

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Table of Contents

INSTITUTIONS OF LABOR AND HUMAN RIGHTS ........................................................ 1 Electronics Industry Code of Conduct (EICC) ................................................................... 2 International Labor Organization (ILO) ................................................................................... 3 The China Labor Union All-China Federation of Trade Unions (ACFTU) CASE OF MULTINATIONAL ELECTRONICS MANUFACTURING COMPANY ......... 4 Foxconn ................................................................................................................................. 5 Company Introduction ............................................................................................................. 6 Burgeoning Issues in China References

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Institutions of Labor and Human Rights The following are international institutions and Labor Unions that regulate labor and human rights. All of the members must follow the regulations. 1. Electronics Industry Code of Conduct (EICC): The Electronic Industry Code of Conduct (EICC) is a document put out by the Electronic Industry Citizenship Coalition. EICC tends to improve working conditions and social responsibility throughout the electronics supply chain around the world. Its members include countries from China, Japan, Korea, Russia, the United States, and Germany. The Code may be voluntarily adopted by any business in the electronics sector and subsequently applied by that business to its supply chain and subcontractors. (EICC, 2009) 2. International Labor Organization (ILO): The International Labor Organization is an agency of the United States which deals with labor issues. Its members throughout the world are known as the International Labor Offices. Members include states that any original member of the United Nations and any state admitted to the U.N. thereafter may join. (ILO, 1996) 3. The China Labor Union The China Labor Union Base (CLUB) program is under the direction of the Wei Jingsheng Foundation, whose goal is to provide support to labor movements in Mainland China. From its office overseas, the CLUB program serves primarily as a center for the collection and dissemination of information which relates to the state of Chinese labor. Through extensive use of various media, CLUB provides a platform that mainland labor organizers can use to exchange information, to notify press of recent developments and activities, and to report human rights

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violations. (CLUB, 2005) 4. All-China Federation of Trade Unions (ACFTU) All-China Federation of Trade Unions is the sole national trade union federation of the Peoples Republic of China. Its major functions are to safeguard the lawful rights and interests of workers and their democratic rights.

Summary of the labor standards related to Foxconns main issues: Juvenile Labor Suppliers may employ juveniles who are older than the applicable legal minimum age for employment but are younger than 18 years of age. Working Hours Except in Emergency or Unusual Situations, a workweek shall be restricted to 60 hours, including overtime. Workers shall be allowed at least one day off every week, and overtime shall be voluntary. Under no circumstances will workweeks exceed the maximum permitted under applicable laws and regulations. Wages and Benefits Suppliers must pay all workers at least the minimum wage required by applicable laws and regulations. In addition to their compensation for regular hours of work, workers must be compensated for overtime hours at the premium rate required by applicable laws and regulations. Suppliers should not use deductions from wages as a disciplinary measure.

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Company Introduction- Foxconn Technology Group Foxconn Electronics, the trade name of Taiwans Hon Hai Precision Industry Co. Ltd, makes iPods for Apple and motherboards for Dell, among products for other U.S. companies. It produces for the most famous brand names in the global IT industry including Apple, Hewlett-Packard, Dell, Nokia and Sony . Wit h its ability of system integration with R&D design, Foxconn continues to develop cooperation with international factories closely to be international Electronic Manufacturing Services ( EMS ) enterprise (see Exhibit 1). It has only been in Shenzhen since 1993, but already has 240,000 employees with plans for up to as many as half million in the near future. Achieving operating revenue of US$12.5 billion in 2005, Hon Hai has become Taiwans largest manufacturing group and No.1 manufacturer of desktop PCs and PC servers for worldwide global lead firm customers. It has worldwide manufacturing facilities in Asia, North America and Western Europe (see Exhibit 2). It also has R&D centers in the USA, Taiwan and Japan. (Foxconn Technology Co., 2007) Exhibit 1 (from foxconntech.com.tw)

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Exhibit 2 (from foxconn.com)

Burgeoning Issues in China There's a strange phenomenon in China where the people who work the hardest but earn the least. Employees are on the job twelve hours from eight oclock in the morning to eight oclock in the evening each working day, but are only paid for ten hours. Two hours are deducted for meals. Moreover, employees would have to pay for their own food. The lowest rank workers earn only around 1,000 yuan ($120) per month, including overtime pay. (Weil, 2008) It is approximately fifty cents per hour, and not counting free food and housing. If production requires, employees may work on Saturdays and even Sundays at double time without any rest.

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In fact, many factories in China demand employees work long hours, although most of the employees are pleased to do so because of the overtime pay they receive. As for benefits, all those who employed at Foxconn have limited benefits. Employees can go to a factory clinic if they are sick. In cases of major illness, they can go to a hospital with company paying 80 percent of the cost. However, for fatal diseases such as cancer, fellow employees request and gather donations. (Weil, 2008) In the specific case of Foxconn, the recent spate of suicides marks a sharp rise from 2010. But the suicide rates are significantly lower than outside the factory in China. China's labor laws are routinely violated and workers are offered very little protection. There were almost 80 percent of companies violating labor laws. Many companies refused to sign contracts with workers and were paying a salary below the minimum wage. (Moxley, 2010) City leaders may have been pressured by national officials, the All-China Federation of Trade Unions (ACFTU), or even non-governmental organizations that increasingly monitor and protest against abusive conditions in the factories. However, 90 percent of the enterprises in the area where foreign owned, they are key elements in maintaining annual economic growth. Local authorities are under great pressure to keep the money flowing and make owners happy. As a result, regulations are commonly ignored at the local level. Workers who try actually to claim their right to insurance, medical, pension, and unemployment payments are often fired by employers. In some cases, workers even asked their employers to disregard these legal obligations, so they can keep on working. Governmental authorities connive with the enterprises in this process. (Pilling, 2010) Without enforcement by labor unions, the revolting efforts are nearly worthless. Therefore, workers will take actions only if things go too bad. Some larger enterprises in

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Shenzhen, such as Foxconn, have complaint procedures. However, if an objection or complaint is denied, there is nothing that workers can do. As a result, with workers lacking union protection, labor actions are largely spontaneous.

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References China: Spate of Factory Suicides Exposes Sad Plight of Workers. (2010). Global Information Network, 2010(1). Retrieved from ProQuest Research Library.

City of Youth: Shenzhen, China. (2008). Monthly Review, 2008(18), 32-49. Retrieved from ProQuest Research Library. Electronic Industry Code of Conduct. (2004). Retrieved from http://www.eicc.info/Home.html Foxconn Crisis Proves Need for Global PR. (2010). Advertising Age, 2010(1). Retrieved from ProQuest Research Library. Foxconn Technology Co., Ltd. (2007). Retrieved from http://www.foxconntech.com.tw/en-global2-1.html International Labor Organization. (1969). Retrieved from http://www.ilo.org/global/about-the-ilo/lang--en/index.htm The China Labor Union. (2005). Retrieved from http://www.chinalaborunion.org/en/home.php

The Dark Side of Chinas Enduring Dream. (2010). Financial Times, 2010(1). Retrieved from ProQuest Research Library.