Tag: worker treatment

OM in the News: The Amazon “Factory” and Unions

All of our students are knowledgeable about Amazon, its growth, its products, and its hyper-wealthy chairman, Jeff Bezos. Many may have followed the news about the recent attempt to unionize at Amazon, starting with the Bessemer, Alabama, fulfillment center. The New York Times (April 12, 2021) takes an interesting perspective on the story, tracing the Bessemer facility to its origins as steel plant in the mid-20th century that provided middle-class lives to its workers. Now defunct, the steel factory is still a “factory”, writes The Times, but of a different sort, with Amazon paying $15 per hour, double the federal minimum wage.

That is not the kind of pay that seems likely to help again build a thriving middle class. And Amazon jobs are looking more and more like the future of the U.S. economy, with the company growing from 750,000 to 1.3 million workers in the past 18 months.

amazon book

A new book about Amazon, called “Fulfillment,” points out that Amazon’s warehouse jobs have a lot in common with the industrial jobs of the past. They are among the main options for people who graduate from high school or community college without specific job skills. They are also physically demanding and dangerous.
Fulfillment reminds us about the injuries and deaths that came with old factory jobs, and documents the similar risks that warehouse jobs can bring. Jody Rhoads was a 52-year-old mother in Carlisle, Pa. Her neck was crushed by a steel rack while she was driving a forklift in an Amazon warehouse, killing her. (“We do not believe that the incident was work related,” an Amazon manager reported to the government, falsely suggesting her death was from natural causes.)
One former Amazon worker adds: “Amazon is reorganizing the very nature of retail work — something that traditionally is physically undemanding and has a large amount of downtime — into something more akin to a factory, which never lets up.” And rather than working in teams of people who are creating something, warehouse workers often work alone, interacting mostly with robots.

Classroom discussion questions:

  1. Why did the Bessemer workers soundly turn down the union organizing effort?
  2. How do fulfillment center jobs resemble factory jobs? How do they differ?

OM in the News: Human Rights Abuse Investigated by Nestle

Most of Thailand's seafood workers are migrants brought in illegally by traffickers
Most of Thailand’s seafood workers are migrants brought in illegally by traffickers

The seafood industry in Thailand suffers from widespread labor and human rights abuses, exposing virtually all American and European companies that buy seafood from there to the “endemic risk” of having these problems as part of their supply chain, according to a report just released by the food giant Nestlé. The report cataloged deceptive recruitment practices, hazardous working conditions and violence on fishing boats and in processing factories. It also faulted the industry for taking insufficient steps to ensure that workers were not underage. (Nestle had been sued in August, with the claim that its Fancy Feast cat food was the product of forced labor, reports The New York Times–Nov. 24, 2015).

Most of Thailand’s seafood workers are migrants from neighboring Cambodia or Myanmar; they were provided fake documents and often sold to boat captains. On fishing boats, these workers routinely faced limited access to medical care for injuries or infection; worked 16-hour days, 7 days a week; endured chronic sleep deprivation; and suffered from an insufficient supply of water for drinking, showering or cooking. “Sometimes, the net is too heavy, and workers get pulled into the water and just disappear,” one Burmese worker said. “When someone dies, he gets thrown into the water.”

Workers sometimes went a year before receiving any wages, and some faced physical and verbal abuse if they did not meet production quotas. Nestlé said that next year it would announce new requirements for all potential suppliers as well as the details of a plan for hiring auditors to check for compliance with new rules. Because Nestlé is the world’s biggest food company, it is seen as a leader in the industry, and could have a positive impact on the whole industry by raising the bar on labor protection.

Classroom discussion questions:

  1. Why did Nestle issue this report?
  2. What can be done to stop worker abuse?

Guest Post: Amazon vs. The New York Times

Our Guest Post today comes from Lawrence M. Miller, at http://www.ManagementMeditations.com

Last week the New York Times published an important article on Amazon and its very competitive, demanding culture. (Jay and Barry’s OM Blog summarized the issue on August 18th). I think the Times piece and the response to it from Jeff Bezos are important reading. Here is my take:

Amazon has grown in the highly competitive Internet and technology environment and is daily competing to bring new products and services to market. They have succeeded so far because of the intensity of their culture. They have been in the conquering “barbarian” stage of expansion and they are deliberately trying to hold on to that culture beyond the point at which it normally drifts into a more stable and comfortable state. Culturally, it is still a start up! And start-ups, fighting for their lives and to grab a piece of market territory that they can call their own, live at a level of intensity that makes many extremely uncomfortable. They are at war!

My guess is that Amazon is straddling the Barbarian and Builder/Explorer stage of my life cycle model. This is a good place to be in an external environment that is filled with rapidly emerging competitors and changing technologies. If you aren’t conquering you are probably about to be conquered!

Managing the culture of a company is like tuning a stringed instrument: over tighten and it makes a squealing sound; under tighten and it sounds dead. What is too much pressure for one person is not for another. If a company wants to grow, it needs to maintain that “creative dissatisfaction” that drives employees to innovate and perform at a high level. On the other hand, it wants a culture that does not drive away the most creative and capable. Amazon could not have succeeded as it has if its culture was driving away its most talented. It can’t be that bad!

NYT

 

OM in the News: Radical Changes for Foxconn and China’s Electronics Industry

foxconnWhen Pu Xiaolen was hired at the Foxconn plant in Chengdu, China a little over a year ago, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth, writes The New York Times (Dec.27, 2012) in its lead story. Then one day, halfway through a shift inspecting iPad cases, she received a beige wooden chair with white stripes and a comfortable high, sturdy back. She wondered if someone had made a mistake.

But in Spring of 2012, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. “This is a disgrace!” shouted Terry Gou, founder of Foxconn, the world’s largest electronics manufacturer and Apple’s most important industrial partner. Gou — seen by activists as a longtime obstacle to improving conditions inside his factories (which we have blogged about in the past) — was finally committing to a series of wide-ranging reforms. Foxconn’s pledges, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry.

The firm announced that by July 2013, no employee would be allowed to work more than an average of 49 hours a week — the limit set by Chinese law. Previously, some Foxconn employees worked 100 hours a week. Foxconn also promised to increase wages, so employees’ total pay would not decline despite fewer hours — the equivalent of a 50% raise for many workers. With 1.4 million employees in China, Foxconn is setting a bar that all manufacturers will be judged against.

Change is hard, say officials in several Chinese companies. Reforming labor conditions in China will probably take decades, and labor abuses are an ever-evolving problem without just one right answer. “The days of easy globalization are done,” said an Apple executive.

Discussion questions:

1. What is/should be Apple’s role in this reform?

2. What events caused Chairman Gou to make this major move?

OM in the News: Wal-Mart Under Pressure to Monitor its Global Suppliers’ Treatment of Workers

The New York Times (May 31, 2011) reports today that Wal-Mart will be facing pressure, at the company’s annual meeting in 3 days, to monitor and disclose how its global suppliers treat their workers. The New York City pension fund, which owns shares in the company, plans to ask Wal-Mart to require vendors to document working conditions in their factories. “They put tremendous pressure on their suppliers to cut money out of the system”, says a  fund exec, instead of  improving workplace safety and worker rights.

A Bangladeshi labor organizer complained that many of the factories in her country that make goods for Wal-Mart mistreat their workers. “Very often, first of all, the factory does not enforce the law regarding minimum wages. We haven’t seen any Wal-Mart suppliers give a living wage to workers”, she said.  The pension fund proposal asks for yearly reports that include measurements of performance on workplace safety and human rights, using international standards.

Wal-Mart opposes the request, saying it is too hard to get suppliers to issue reports. This might threaten the availability of products from companies that do not comply. Wal-Mart’s spokesman adds, “We expect our suppliers to meet or exceed these (workplace) standards. A supplier’s failure… may jeopardize that supplier’s continued business relationship with Wal-Mart”.

Ironically, in the environmental field, Wal-Mart has successfully become a world leader in creating metrics for reducing packaging and for sustainability across the whole 100,000 member supply chain (see our blog last week on the topic). But the topic of human rights is a separate issue.

Discussion questions:

1. Why does Wal-Mart oppose reporting on human rights issues such as this?

2. How does this compare with the company’s drive towards sustainability?