Introduction
Culture plays a significant role on a business conduct. The importance of ethics and values in doing business has grown as it can be seen how business scandals and ethical gap have influenced public trust and opinion (Williams, 2011). Managers and business leaders are often faced with a situation where decisions need to be made by considering the ethical implications relating to the company, employees, and customers (Tepper, 2010). It is important for a business to pay great attention to the accepted principles of right or wrong in governing the conduct of business. Furthermore, it is also crucial for a business to have strategies that is ethical in which they do not violate the accepted principles.
This paper will analyze the internationalization strategy, motivations and values of Honda. Then, it will present the ideal-ethical values of other international businesses. Lastly, it will compare the ideal-ethical values to Honda’s and the concluded with learnings that could be useful for the board of directors and other readers.
Foxconn’s Internationalization Strategy, Motivations and Values
The Foxconn International Holdings is a multinational company headquartered in Taiwan and carrying on business in electronic manufacturing services (EMS) sector. I The company had expanded outside of China, to places as diverse as the US, eastern Europe and Latin America. Working outside of China helps Foxconn’s customers get quicker turnaround and avoid some import taxes. However, it has also created some challenges for the company as it employed more than 1m people worldwide. Foxconn often enter new markets by taking over old factories once owned by its customers. However, this strategy has sometimes created clashes when applies to cultures far different from the Chinese factory that Foxconn is most familiar with. In doing business outside China, Foxconn also prefer to localize their staff as it they good understanding of local culture.
The core value of Foxconn is continual education, investing in its people long term and localization globally. It has the objectives of making a continued evolution from a manufacturing leader to a technology leader and to rally the best of their workforce (FIH,2009).
In 2010, Foxconn has been involved in several controversies, relating to how it manages their employees (The Age, 2010). One of the most publicly known is the series of suicides in 2010. It then revealed that the cause of the suicides are the low income, heavy working pressure and a lack of communication opportunity. Foxconn then admitted that the facilities there were fine, but the management was poor. Hundreds of people work in the workshops were not allowed to talk to each other (The Telegraph, 2010). This had been the ethical gap found in Foxconn business conduct.
However, Foxconn did manage to renew its commitment and value which is to respect employees, ensure continuous improvement, contribute to the well-being of society, and achieve sustainability. The management style of Foxconn has changed in which they raised their standards of employee benefits, providing additional recreational activities, and assisting employees in overcoming the stress from the workplace (PUN et al., 2016)
Ethical Values and Vision for International Business
Table 1. My ideal ethical values and vision
Value
Description
Supporters
Customer
Provide customers with highest products and services consistent with their requirements.
Caux Round Table (2017); Honda (2017); Exxon Mobil (2017)
Employee
Treats every employee with dignity and respects their interests. Provide jobs and compensation that contribute to improved living standards
Caux Round Table (2017); United Nations (2017); UN Global Compact (2017); Exxon Mobil (2017); Renault (2017)
Anti-Corruption
Work against corruption in all its forms, including extortion and bribery
UN Global Compact (2017)
Environment
Promote greater environmental responsibility
UN Global Compact (2017); Huawei (2017); Renault (2017)
Obeying the law
Comply with the laws and regulations of the countries in which it operates
Unilever (2017)
It is important for a business to be able to satisfy its consumer, however there are some other things that are equally important to be paid attention to when conducting a business. For me, my ideal ethical values for doing an international business are customer, employees, anti-corruption, and environment. Customer satisfaction is recognized as being highly associated with ‘value’ (Athanassopulos, 2000, p. 192). The first determinant of overall customer satisfaction is perceived quality and the second determinant of overall customer satisfaction is perceived value (Fornell et al., 1996, p.9). The service management literature argues that customer satisfaction is the result of a customer’s perception of the value received (Hallowell, 1996, p.29). Therefore, it is important that the customer receive a positive value that will influences satisfaction.
Researchers have examined the match between a person and an organization. Findings have supported the existence of a positive relation between the congruence of employee and organizational values with employee attitudes toward the organization (Amos & Weathington, 2008). If employees fit well with an organization, they would likely to exhibit more positive attitudes and behaviors. Studies found that the level of value congruence between employees and their organization is positively related to attitudes such as satisfaction and commitment (e.g., Adkins, Ravlin, & Meglino 1996; Boxx et al., 1991; Furnham & Schaeffer, 1984; Rosete, 2006).
An individual is likely to commit a corrupt act if he or she is paid a low salary, is provided with the opportunities for corruption, and perceives corruption to be low risk, high reward activity (Quah, 1982). As conducting international business, it is important to acknowledge that the impacts of corruption disproportionately affect the most vulnerable people in society. Corruption will effect investment, weakens the economic growth and undermines the law (Shapiro, 2017).
Today, being environmentally friendly is no longer a cost of doing business but rather an innovation, new market opportunity, and wealth creation (Clarke et al., 1994). Reducing the environmental impact of a business will improve the sustainability of the business. Being less dependent on natural resources than other competitors and have ways to deal with rising costs due to climate change and so on will enable the business to have a greater chance of having a long-term success. Other than that, good practice can attract people from the rest of the world.
Derived from my international business values, my vision for international business is:
– To demonstrate a business that meet all shareholder’s expectation while still being able to present a positive impact to the society.
Comparison with Foxconn
Foxconn is compared to my ideal ethical-value and vision. From the customer perspective, Foxconn has been able to meet its customers’ expectation. It can be seen how big companies like Apple, Nokia, Toshiba, Cisco, etc have trusted on producing their products to Foxconn (Kan, 2012). However, from the employee perspective, it had been proven that Foxconn didn’t have an ethical working conditions for their employees. Foxconn had involved in labor abuses that caught the attention of the world. In addition to that, Foxconn had also been involved in a bribery case in 2014. It was another blow of the reputation of the company that has struggled in years with labor and worker problems (Barboza, 2014). Furthermore, in 2013, Foxconn was also found to be dumping too many chemicals into nearby rivers in China and caused environmental pollution (Mozur, 2013).
However, today Foxconn has been able to improve in several aspects regarding the employees and all other contribution to the societies. It has improved in its working condition and increase employee satisfaction as well as contributing in some charities.
Conclusion
In conclusion, international businesses face global challenges and therefore having strategies, value and vision is crucial. In this case, Foxconn internationalization strategy succeeded as it is proven how it has been able to work with many big companies from around the world and producing goods that meet the expectation of each of their consumers. However, Foxconn has not met my other business values which are the employees, environment, and anti-corruption. It has involved several cases in 2010-2014. The analysis of Foxconn has been able to show that international business need to do more than just being profitable, but also need to contribute positive aspects to internally and externally.