Beating as a management tool – The WTO-column

(later also at Chinabiz and the Wage Indicator)
Are you sitting on a couch made by the Italian furniture producer DeCoro? The chances are pretty huge since they started in Shenzhen in 2003 a new facility that is churning out every day 55 containers of couches. Every day. That is close to 2,000 containers a year.

The business climate of Shenzhen, with so many low-end manufacturers from Hong Kong and Taiwan must have had a poor influence on the Italian managers who, according to some media reports, had this longstanding tradition of beating their employees. DeCoro president Lucci Ricci has meanwhile apologized, but that might be too late.

In Italy the company tries to cherish they good reputation and then this kind of incidents is not really helping.

Of course the readers of this column only use textbook techniques they learned during their expensive MBA-courses, but obvious not everybody in China wants to build up a long-term relationship with their employees.

What makes this incident worth mentioning is not only that it involves not a local, Hong Kong or Taiwanese company, but a European employer. In the past, they would have gotten away with it. Chinese media have been reporting about the beating, the illegal cut of wages and the consequent walk-out of 3,000 employees extensively, encouraging workers in similar causes to act.

What makes this relatively small incident interesting is that Chinese media, yet again, saw enough leeway to report about the beating Italian managers and the ensuing upheaval.

During more politically-charged times accusing foreigners of repeating their old habits of forcing Chinese into submission – like they did during the Boxer Rebellion – was very much en vogue in the Chinese media. But that ideological language has been phased out. So, when the story of foreigners beating Chinese – be it without the ideological charge – shows an important change in policies.

Stability used to be the key word during Jiang Zemin’s reign and anything that could challenge such stability was routinely banned from the Chinese media. So, when the media actually mention such a labor unrest, is comes close to officially condoning resistance against poor labor management. That is a message worth noting also for others than DeCoro. Earlier we saw already that Chinese media started to report on rising wages.

Not only wages are going up, labor conditions are becoming increasingly an issue. The question, some managers will ask themselves, is: are we next?

Fons Tuinstra