China's Worker Unrest: Transforming from 'World Factory' to a 'World Market'?

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : HROB137 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Labor Relations / Collective Bargaining
Case Length : 29 Pages
Period : 2007-2010
Organization : Honda Auto Parts Manufacturing Co. Ltd. (Honda) Foshan / Foxconn International Holdings Ltd. (Foxconn) / Shenzhen
Pub Date : 2011
Teaching Note : Not Available
Countries : China
Industry : Automotive / Electronics / Manufacturing

Abstract:

This case study was about the increasing worker unrest taking place in China during the summer of 2010. The case highlights how China was a 'world factory' that followed the export-oriented growth model that wanted to achieve growth at any costs. China had a controversial history where the period of the 'Great Leap' was superseded by the concept of 'Growth with Chinese characteristics'. For a long period in its modern history, the country had thrived on the exploitation of the underprivileged working class.

The country had a 'hukou' system that essentially controlled the movement of rural people into urban areas. These rural workers that lived and worked in urban areas faced a tough life.

Unprecedented labor unrest had erupted in China during 2010 in China. The strike at Honda Auto Parts Manufacturing Co. Ltd. (Honda), Foshan and suicides at the Foxconn International Holdings Ltd. (Foxconn) plant in Shenzhen had drawn global attention. There were increasing wage demands from workers that threatened China's competitiveness.

China only had one official trade union that did not protect the workers during disputes. In fact, the union would even assault striking employees in case they did not follow their orders. However, the workers were becoming increasingly enraged at the conduct of the official union. The strike by Honda, Foshan employees that began on May 17, 2010 was labeled as the the largest industrial action ever reported in China. In the case of Foxconn, there was a string of tragic suicides. However, the management had distanced themselves from the events, calling them psychological issues being faced by the workers. However, in both the cases - Honda and Foxconn, wages were raised. The was a contrasting experience between Foxconn and Honda workers - while the former had had chosen the path of suicide, the latter had united to fight for their gains.

Experts had mixed views regarding these unprecedented developments. Some thought that it would hasten change towards an open society. It was reported that the Guangdong People's Congress had begun to debate about granting labor the officially sanctioned right to strike and elect the worker representatives. However, these changes were putting the Chinese state into a dilemma of securing increasing amounts of growth.

Issues:

Understand the issues surrounding the particular context of a labor movement.
Analyze the reasons for the workers to organize.
Debate the role being played by labor unions.
Appreciate if the employees have rights against their unions.
The critical role of unions in securing employee wellbeing.
The need to have good faith in the relations between employees, employers and the union.
The role of grievance handling in a union.
Appreciate the importance of constructive labor legislation.

Contents:

  Page No.
Introduction 1
Anatomy of the Strike at Honda 2
Genesis of China as a World Factory 5
Social Costs of Growth 6
Winds of Change 9
Were The Suicides at Foxconn in Vain? 10
The Hard Realities 12
Granting the Right to Strike 14
Exhibits 16

Key Words:

Labor Movement, Organizing workers, Strikes, Psychological effects of work conditions, Taylorism, Collective bargaining, Industrial action, Trade Union, Labor Law, Physiological effects of work conditions, Government Responsibility, Employee performance, Generational influence in the workforce, Demographic profile, Hukou system, Socialism with Chinese Characteristics

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