This will explain about the business model of Foxconn. The leader Terry Gou bibliography with its major challenges and strategies he used to make foxconn a successful company.

1. Management essentials
and Leadership art
Management essentials and Leadership art Terry
Group members:
Borislav Blagoev
Darpan Agarwal
Felix Conde
Martina Pirisi
Liudmila Pape
Sreyly Pich
Veronika Ivanikhina
Antai College of Economics and Management,
Fall 2015

2. Terry
Gou
#34 Richest in Tech (2015)
#4 Taiwan`s 50 Richest (2015)
#240 Billionaires (2015)
#2 in Taiwan
#71 Powerful People (2014)
Management essentials and Leadership art Terry

3. Management essentials and Leadership art Terry

4. Management essentials and Leadership art Terry
• 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

5. Motivation
Define 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
Management essentials and Leadership art Terry
“The group’s
benefit is more
important than
your personal
benefit”

6. 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 emotions
Motivation
• 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
HighLow
Management essentials and Leadership art Terry

7. 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
Suicides
Management essentials and Leadership art Terry

8. “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.”
Management essentials and Leadership art Terry

9. Managerial decisions of Terry Gou
ResultDecisionProblem
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
Management essentials and Leadership art Terry

10. Management essentials and Leadership art Terry
Leader
Terry Gou
Followers
1.2 million employees
3000 applicants/week
Situation
Apple
BYD
Pegatron
Three factors of Leadership

11. Curious Facts
Management essentials and Leadership art Terry
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.”

12. Terry Gou the Mayor of Foxconn
Management essentials and Leadership art Terry

13. •TSE Health Foundation
•Development Fund for Animal Welfare Promotion
•Donation for Cancer Center
Management essentials and Leadership art Terry

14. Management essentials and Leadership art Terry
Terry Gou Leadership Profile
Coercive
Authoritative
Coaching
Affiliative
Pacesetting
Democratic

15. “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.”
Management essentials and Leadership art Terry

16. Personal
traits
Company
strategy
Organizational
culture
Emotional
Intelligence
Competitive
market
Social
responsibility
Leadership
style
Conclusion
Charity
Creating 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 and Leadership art Terry