Foxconn beyond China: Capital–labour relations as co-determinants of internationalization

Foxconn’s manufacturing centre is in mainland China, where it employs around 1 million people in 32 factories. In addition it has more than 200 subsidiaries around the world. Foxconn’s territorial diversification strategy begs certain questions about the firm’s internationalization, namely the process by which it expands and subsequently organizes its operations from mainland China to its overseas branch plants. Based on original ethnographic fieldwork, this chapter explores Foxconn’s internationalization and transfer of work and employment practices from mainland China to Europe, namely the Czech Republic and Turkey.

Research into multinational firms and their organization across national borders tends to approach the subject from either an economic perspective typical of international business literature or a sociological perspective developed in organizational studies. Until now, both the economic and the institutionalist strands investigated multinational firm’s expansion from mature (US, Western Europe and Japan) to emerging economies (for an exception see Aguzzoli and Geary, 2014), or alternatively from mature to mature economies as in the case of US firms establishing subsidiaries in Western Europe. Very little attention is paid to the expansion of firms from emerging to mature economies, in particular how firms operating in mainland China establish and organize their subsidiaries in Europe.

This paper begins to fill this gap by posing the following questions: First, which work and employment practices is Foxconn exporting from its base in mainland China to its European subsidiaries? Second, are these practices applied consistently across European subsidiaries or are there variations from one country to another? Third, if Foxconn adapts its practices depending on the specificity of a national context, which factors influence this adaptation? In asking questions about the labour regime which Foxconn exports from mainland China to Europe and the factors influencing the adaptation of the firm’s practices in different host countries, this paper contributes a more substantive account of Chinese investments in Europe.

To offer a more nuanced picture of the work and employment practices that Chinese firms import into Europe, rather than focusing solely on the home country effects, we examine the role of the state and the trade unions in the host countries in order to assess the ways in which host states enable the formation of a particular labour regime. We also undertake a detailed analysis of the workforce in order to show how the specificity of workforce composition shapes the firm’s labour management practices. This paper then investigates the ways in which the role of labour, the state and the trade unions co-constitute the firm’s behaviour and its production politics. In contending that the work and employment practices that Foxconn establishes in its European subsidiaries are engendered by the host state’s institutional context and labour as much as by the firm, this paper aims to capture the overlapping influences of actors, sites and institutions, as well as the power relations between them that inform the workings of transnational firms across borders.