management essentials & leadership art project on leader of foxconn: terry gou

Management essentials and Leadership art

Management essentials and Leadership art Terry Gou

Group members:

Borislav BlagoevDarpan Agarwal

Felix CondeMartina PirisiLiudmila Pape

Sreyly PichVeronika Ivanikhina

Antai College of Economics and Management,Fall 2015

Terry Gou

#34 Richest in Tech (2015)#4 Taiwan`s 50 Richest (2015)#240 Billionaires (2015)#2 in Taiwan#71 Powerful People (2014)


Biography “Where do I belong?”

• Grew up in Shanxi• Built school, a pig farm and a Foxconn factory in a nearby town that employs 20,000 people


“What are my values?”Terminal values: sense of belonging, family security, sense of accomplishmentInstrumental values: ambitious, broad-minded, courageous

“What are my strengths?”• Self-made man• Graduated from China Marine Junior College• Served in the military• Worked in a rubber factory, at a grinding wheel and medicine plane until the age of 24

“How do I work? ”1974- start up the company with only $7500 investments and ten workers2015-one of the most richest businessman in the world

“What can I contribute?”• Founded an educational charity organization • Gives away one third of his wealth to charity


• From manual production to machinery processing and finally to eCMMS

• Foxconn’s Adaptability to Client Business Process• Vertical integration of production for cost leadership• Enterprise resource planning to guarantee quality and punctual

delivery

Strategy

• Autocracy for the benefit of the company• Control system based on military management• Adjusted production to fall in line with less educated workers

Action

• World’s largest Electronics Contractor Manufacturer• Third largest IT company by revenue• Foxconn is the largest exporter of China• Current revenue of Foxconn is $139 billion• Total number of employees working is 1.2 million• Factories in over 20 countries

Result

MotivationDefine responsibilities, fair rewards,

disciplinary action:

Living conditions Management by Objective

Stock options and ‘138 home plan’ Bonuses from dividends from the

company for 30 percent year-on-year increases


“The group’s benefit is more important than

your personal benefit”

Terry Gou’s Emotional Intelligence skills

Social skills• Doesn’t like to speak with press• Doesn’t like long discussions with managers, often makes

decisions by himself

Self- awareness• Knows his goals and values, strengths, weaknesses

Self- regulation• On public doesn’t show his

emotionsMotivation• Can motivate people• People become his followers• Lead by his example• Fostered empire centered around his personality

Empathy• Doesn’t communicate a lot with his employees• Hard work conditions in factories

High

Low


The Forbidden City of Terry Gou

• Overtimes• Unpaid work assembly• Frequent change of work shifts• Production bonus and competition• Depressing environment• Punishment• Harassment from security guards

SuicidesManagement essentials and Leadership art

Terry Gou

“I should be honest with you. The first one, second one, and third one, I did not see this as a serious problem. We had around 800,000 employees.

At the moment, I’m feeling guilty. But at that moment, I didn’t think I

should be taking full responsibility.”

”We are not just a factory, we take social responsibility. Now, I think we need to change the way things are.

Businesses should be focused on business and social responsibility

should be government responsibility.”


Managerial decisions of Terry GouResultDecisionProblem

Foxcon’s revenue was dragged down by 19.2 % because of declining iPhone and iPad orders

- Mr. Gou personally spent about $840 million on a stake in Sharp's LCD panel factory in Japan Foxconn released a 60-inch with 90 percent of the components made in-house - Recruited 2 companies, RadioShack in China and Vizio in the United States, to sell the television under their brands

- Found new clients- Built the system that allows them not to rely 100% on their customers

BYD began copying business model and poached 50 Foxconn employees, who in their turn stole documents containing trade secrets

Claimed to the court of Justice using intellectual property rights

Built entry barriers

Apple decided to segregate its suppliers and concluded contract with a main Foxconn competitor Pegatron

Gou reduced his profit of margin and provided better services to its employees: increase salary, reduce working hour, provide better working conditions

- Maintained the operational cost- Kept employees from switching to Pegatron



LeaderTerry Gou

Followers

1.2 million employees3000 applicants/week

Situation Apple BYD Pegatron Scandals

Three factors of Leadership

Curious Facts


His current wife didn’t know how big of a deal he was when he first

hired her to teach him to dance, but she did know that he “danced

very well for an amateur.”

Terry Gou the Mayor of Foxconn


• TSE Health Foundation• Development Fund for Animal Welfare Promotion

• Donation for Cancer CenterManagement essentials and Leadership art

Terry Gou


Terry Gou Leadership Profile

Coercive

Authoritative

Coaching

Affiliative

Pacesetting

Democratic

“The important thing in any organization is leadership not management. A leader must have the

decisive courage to be a dictator for the common good”

GENGHIS KHAN:common traits

He encouraged his supporters to be frank and speak without ceremony.

He share his employees’ efforts working close to them and coordinating all their operations.

QIANLONG EMPEROR: differences

Is looking forward to find a successor to run his empire.

“Now I feel to sit back and give young people more responsibilities.”


Personal traits

Company strategy

Organizational culture

Emotional Intelligence

Competitive market

Social responsibilit

y

Leadership style

Conclusion

CharityCreating Jobs

Courage to lead, knowledge expertise,

traditionalism, ambitious, goal-oriented

Adaptability, Cost leadership

Autocracy for the benefit of the

company, Emperor of the Forbidden city

High self-awareness, self-regulation, ability to motivate, low social skills and empathy

Staying on the top

Aligning Motivating Giving direction


management essentials & leadership art project on leader of foxconn: terry gou

Leadership & Management