The world’s largest manufacturer of electronic components is at the center of a new controversy regarding labor policy violations. Foxconn, the world’s largest producer of electronic components, recently admitted to forcing underage Chinese interns to work in factory shifts as part of their internships. This controversy is just the latest in a series surrounding the firm.
For example in 2010, 13 Foxconn employees working in China killed themselves as part of a broader trend of labor strikes related to unacceptable working conditions. In India, 250 Foxconn workers fell sick that same year, prompting the firm to temporarily close the factory where they worked. And last October reports first surfaced of 14 year olds working in Foxconn factories in China; the working age in China is 16.
Based in Taiwan, the company produces numerous products including Apple Iphones and Ipads and in 2011 had estimated annual revenue of NT$ 3.452 trillion (USD 117.7 billion) and estimated annual income of NT$ 81.59 billion (USD 2.78 billion). Given that firm is consistently profitable, it is highly likely that these abuses stem from corruption on the part of local management. In this instance then the firm is not operating toward the view of maximizing firm profits, but rather the individual profits of local managers, without regard to the broader social/political costs to the firm of violating the law. This behavior may in fact harm the profits of the overall firm, given that lawsuits or fines imposed by the Chinese government may cost the firm money, making this a situation in which the incentives of individual managers to cheat directly conflicts with the profit maximization of upper level management.