Workplace stress pose significant threats to the employees not only in relation to morale and productivity; it can also lead to fatalities such as suicide or attempted suicide. For organizations involved, it can lead to litigations and reputational damage. This case study provides highlights the dangers of workplace stress both at individual employee and organizational level. It also highlights the lack of watertight policies and regulations to safeguard the rights of employees. Towards this end, the essay will provide a background to the case including a brief organizational profile of the companies involved and the main issues at the center of the case study. The essay will also analyze the case with the view of interlinking the issues involved with organizational management practices and principles including the primary roles of managers and management ethics. This will be done with the view of drawing a conclusion on how management can play a central role in mitigating against workplace stress. The essay will also discuss two questions that are related to the case study with the goal of stressing the importance of the workplace stress when it comes to organizational management.
The founding of France Telecom can be traced to the historical 18th century French Revolution when the wars and divisions within the country necessitated the creation of safe communication channels. As technology evolved, the company began to take shape and transformed from a government ministry department into a full-fledged independent entity by 1990. Currently, the company is a financially-autonomous private entity with the French government as one of its main shareholders (Orange.com, n.d).
With over a quarter billion subscribers and billions of dollars in annual revenue, France Telecom, currently operating as Orange S.A., is one of the world’s leading telecommunication company with operational footprints across numerous countries in different continents including Europe, and Africa among others. The company’s employee base, which currently stands at over 135,000 personnel working across numerous subsidiaries and holdings makes it one of the leading employers especially in France where it employs over 95,000 people (Orange.com, 2019). Some of the company’s successes have been built on pathogenic restructuring that have led to many deaths as a result of employees committing suicide due to workplace stress (“Workplace stress can kill”, n.d).
Another high-profile and global company which has hit the headlines for the wrong reasons is Foxconn Technology Group; a Chinese technology company headquartered in Taipei, Taiwan. Foxconn Technology Group is the trading name of Hon Hai Precision Industry Co., Ltd. Founded by Terry Gou in 1974 as an electronics manufacturing company, Foxconn Technology Group has grown into a multinational entity with numerous subsidiaries and holding companies spread across the globe. As global entity, the company has established operations across various countries including the United States, Brazil, South Korea, India, and Japan among others. This is in addition to its strong presence in China (Foxconn.com, 2019).
The multinational specializes in manufacturing and assembling of electronic devices, products and their components for some of the world’s leading multinational corporations such as Apple, Microsoft, BlackBerry, Cisco, Dell, Amazon, Nintendo, Intel, Toshiba, Google, Toshiba, and Hewlett-Packard among others (Foxconn.com, 2019). The company boasts of billions of dollars in revenue and employee base exceeding one million personnel. Like France Telecom, Foxconn Technology Group has been embroiled in numerous controversies especially in its manufacturing plants in China due to poor work conditions leading to significantly high levels of suicides and suicide attempts by its employees.
The underlying problem faced by employees working in these two companies is the physical and psychological trauma associated with working in physical and psychologically draining environment. For France Telecom, employees are primarily psychologically traumatized. The company’s executive used a subtly yet dangerous and uncouth approach to organizational restructuring strategy to eliminate over 22,000 jobs. They hatched a strategy based on psychological harassment that pushed employees beyond their limits. Feeling trapped due to the challenges associated with securing a job, some of the employees opted for suicide. While many cases were fatal, close to a dozen employees survived the suicide ordeal. The suicides triggered a chain of events whose nadir was the appointment of a new chief executive officer who pledged to turnaround the company’s approach human resource management (BBC News, 2018; “Workplace stress can kill”, n.d).
Foxconn Technology Group’s employees primarily faced physical trauma as they had to work for extended periods of time under strenuous conditions including standing the whole day. Moreover, the employees had to contend with robot-like work setting as they had to keep up with the fast working machines they worked with. This culture of harassment was implicated in the death of a number of young workers through suicide. Due to strong widespread criticisms, the company took various measures to alleviate the working conditions of the employees including recruiting new employees to reduce weekly work hours and introduction of robots in the assembly lines to replace some workers (“Workplace stress can kill”, n.d). Despite the promise that the displaced employees would be promoted or transferred to new positions, the automation system led to over 60,000 employees being fired (Wakefield, 2016 May 25).
The primary focus of management is controlling, planning, leading, and organizing. When effectively executed, these roles can spur greater growth of the company while also moulding organizational reputation internally and externally. Peaceful work environment is characterized by greater employee and customer satisfaction and loyalty and ultimately, improved productivity and operational success. According to Maslow’s Hierarchy of Needs, a sense of belonging and security are important needs that humans tend to prioritize (McLeod, 2018). When such needs are not met within the workplace, employees and customers alike tend to seek for alternatives leading to disloyalty and disputes. Therefore, management should lay significant emphasis on controlling and organizing resources towards meeting these needs in a planned manner and by taking a leading role. Human resource management is a fundamental organizational management strategy that recognizes human capital as a vital component of growth and development.
This case under review relates to issues of leading, controlling, planning and organizing as core elements of management as well as management ethics. In their quest to achieve leaner operations through restructuring, the executive management of France Telecom ignored the vital role human capital in shaping the success of any organization and how to effectively manage organizational change. As a result, the management sidelined the worker’s union and the need to actively engage the employees whether directly or through their union. Instead, they resorted to dangerous and fatal underhand tactics that were ineffective and put the human capital under greater risk and damaged the company’s reputation. The company employed psychological harassment to push out thousands of employees from its payroll leading to numerous suicide cases by employees who felt trapped and afraid of being unemployed.
Moreover, restructuring is an impactful decision that radically changes an organization’s operations and the lives of employees and their families and dependants. Therefore, it is only moral and ethical and operationally sound that the employees are actively involved in the implementation of the restructuring program whether directly through their union. Effective change management as proposed by John Kotter calls for effective communication and actively involvement of employees by the management. Bringing employees on board when effecting change including appointing some of them as champions of change would have given France Telecom’s employees a sense of ownership of the idea. This would have led to fewer conflicts. Instead, the company’s management employed rather archaic and discriminative approach to change management with sinister motives and fatal and damaging outcome. The sinister motive and the underhand method of implementation of the restructuring program also reveals the lack of management ethics.
The case of Foxconn Technology Group relates to issues of management ethics and planning and organizing inadequacies of the company’s management team. It is unethical to force employees to work for too long hours in poor working conditions. Studies have shown that poor working conditions endangers the lives of employees and is one of the primary causes of workplace accidents (Pearson, 2009). The company is plagued by poor planning and organization inadequacies as it failed to scale its employee base relative to its production goals. Consequently, the management resorted to overworking the employees to meet the targets. Firing thousands of employees following automation even after pledging to retain them is indicative of a management team that is insincere and morally and ethically bankrupt.
The case involving management malpractices at France Telecom and China’s Foxconn Technology Group provided valuable lessons on the principles and elements of effective of management. It showed the importance of putting in place effective human resource management practices and employing transparency and integrity based management approaches and ethical practices. When the managers fail to plan, organize, control, and lead effectively, they put the lives of employees and their families and dependants in great danger while also damaging the highly-valuable organizational reputation. Many of the companies’ employees died due to suicide while they were both investigated by the authorities and faced significant criticism from different quarters. For France Telecom, the chief executive officer and other senior managers even lost their jobs. Therefore, bad leadership and management decisions not only affect the organization and the employees; even the managers are not spared. The case offered lessons on the need for effective change management and operating within the confines of ethical and moral code of conduct which are important management principles and practices.
Q 3: Should managers be free to make decisions that in the best interests of the company without worrying about employee reactions? What are the implications for managing change?
Managers are not at liberty to make decisions while ignoring employee reactions. Employees are the primary implementers of decisions within any organizations while the managers primarily play a supervisory role. Therefore, employees should be included in the decision making process to avoid conflicts which may paralyse the implementation process. Ignoring the reaction of employees may also lead to employee turnover and low productivity due to job dissatisfaction.
Effective change management is hinged on inclusivity and proper communication. Ignoring employee reactions during decision making, which amounts to change, will lead change resistance by the employees. Resistance to change by the employees will lead to the collapse of the process of change management.
Q 5: What could other companies and managers learn from this situation?
The case provides valuable lessons to other companies and managers on the importance of collaborative decision making especially when it comes to change management and general decision-making. Moreover, they can also learn the importance of effective management practices such as controlling, leading, organizing, planning and ethical management practices.
BBC News. (2018 June 16). France Telecom suicides: Former bosses face trial. BBC News. Retrieved from: https://www.bbc.com/news/world-europe-44507597
Wakefield, J. (2016 May 25). Foxconn replaces ’60,000 factory workers with robots’. BBC News. Retrieved from: https://www.bbc.com/news/technology-36376966
“Case Application 2: Workplace stress can kill.”
Foxconn.com. (2019). “Group Profile”. Foxconn.com. Retrieved from: https://www.foxconn.com/GroupProfile_En/GroupProfile.html
McLeod, S. (2018). Maslow’s Hierarchy of Needs. SimplyPsychology. Web.
Orange.com. (n.d). “Shareholding structure”. France Telecom. Retrieved from: https://web.archive.org/web/20130201093852/http://www.orange.com/en/finance/stock-dividend-and-capital
Orange.com. (2019). “Get to know us better”. Orange Jobs. Retrieved from: http://orange.jobs/site/get-to-know-us-better/index.htm
Pearson, K. (2009). The causes and incidence of occupational accidents and ill-health across the globe. British Safety Council.