Over the years, Apple has grown to become one of the most valued companies in the technology sector. The company has changed technology in addition to how people view it. It has been essential in helping technology become critical in people daily lives. The success of the company can be attributed to its customer service practices, quality products, and the increasing product demand. Due to the increased demand for products and the increasing globalization of markets the company has been outsourcing its production activities. Globalization has resulted in dynamism in the market environment. There exist two types of globalization namely the market globalization and production globalization. The globalization of markets can be described as the merging of markets that have been historically separate into one large global market. Globalization of production, on the other hand, describes the concept of sourcing commodities from other parts of the world. This allows companies to reap benefits of national differences concerning costs and quality production factors (Velasquez et al., 2015). This includes labor, capital, energy, and land among others. Due to the advance of globalization, western nations are using China to outsource labor, raw materials, and assembly of their products. For instance, Apple has been using Foxconn in China in the production of its iPads and iPods. The decision by Apple to engage Foxconn factories for the production of its products ultimately reducing the cost of production. However, the conditions of the factories have been questioned in which unsuitable working conditions have been cited. There have been reports of workers committing suicide due to the deplorable working conditions. The allegations against Foxconn and Apple are potentially the reasons as to why the said employees were pushed to the point they committed suicide. Some of the unethical activities that are evident in this case include alleged employment of underage employees, unsafe working conditions, poor management system, long work days and working conditions that are very stressful. In this case, the stakeholders affected include employees in the Foxconn factories, the management of Apple responsible for the outsourcing activities and Foxconn factories.
As described by the case study, Apple and Foxconn have been alleged to participate in poor business strategies thereby causing criticism. The implicated can be a tainted brand image which results in lack changed loyalty from the consumers. How there has been no change in the demand for Apple products by the consumers. The increased production of Apple products through unfavorable conditions is a violation of various moral, ethical and basic human principles. Most of the criticism has been from the working conditions at all Foxconn factories and the benefits reaped from the unethical behavior. In China, Foxconn employs a lot of workers, and it has emerged to be a leader in the manufacture of electronic components. There have been rising accounts of employee mistreatment, and this has led to many controversies. The most significant of these controversies has been the increasing reports of suicide cases at the Foxconn factories. Even after there was an agreement to improve with the United States government to improve the working conditions at the Foxconn factories, workers still commit suicide.
As mentioned the unethical activities include employment of underage workers, poor management, unsafe working conditions, long working hours, poor pay and stressful working conditions (Sadler, 2011). From these ethical issues, there have been questions of whether the increased profits by Apple are made ethically. In the evaluation of the ethical issues and whether Apple is making profits ethically, various ethical theories can be consulted. One of the theories is Stockholder theory developed by Milton Friedman which states that a firm's sole obligation is to make profits for its stockholders and therefore the duty is the maximization of profits (A Framework for Making Ethical Decisions, n.d). Since the stockholders have a direct connection with the firm through various investments, they would suffer loss most in case of losses. According to Freidman, an individual must do anything to benefit their long-term interest provided they act within the law. This theory also postulates that have no social responsibility to the society since this would risk the fundamental relationship that exists between the business and its stockholders (Meeler, n.d). The act of outsourcing the manufacturing and outsourcing of the products of the Apple, the company has been to save money thereby maximizing its profits and in the process increasing the wealth of the shareholders. In this case and according to the Stockholder theory by Freidman, Apple has acted ethically in the manufacturing of its products. There is also the Kantian approach which can be used to analyze the ethical practices at Foxconn factories (Sadler, 2011). This theory looks at the rationally of a firm and that they make the appropriate decisions for the right reasons and not for the company' self-interest (A Framework for Making Ethical Decisions, n.d). Using this theory to analyze the cases activities by Apple and Foxconn, it is easy to conclude that the company was acting unethically. This unethical practices included utilization of Foxconn factories in China which have a poor working environment, employing underage workers, poor pay and illegal overtime. The Kant approach stipulates that firms need to act appropriately to its customers and workers and instill the right motivation for the company actions (Five Sources of Ethical Standards, 2008). Another theory that can evaluate the issue present in the Foxconn and Apple case is the Formula of Humanity which postulates that humanity should be treated as an end and not just as means. According to this theory, Apple and Foxconn should have been keen on how the products are manufactured and also how the final products come out of the production line. As per this theory, the factory workers were treated unfairly, and in deplorable working conditions and the end, the objective was the maximization of profits for the company which is very unethical.
Additionally, there is also the Utilitarianism theory which explains that it is essential to create happiness for you and others. Evaluating the case study, the Apple's manager and the shareholders were happy with the work in Foxconn factories since it made a lot of money for them (Five Sources of Ethical Standards, 2008). However, the people working in those factories work in bad conditions which can be evidenced by the increasing suicide cases. The last theory that can be used to evaluate this case is Virtue theory which emphasizes on four virtues namely justice, temperance, honesty, and courage. The case provides evidence that the Foxconn factories greatly violates the virtue of honesty and justice. They are not honest in their operations which can be seen by the alleged violation of labor laws by employing underage workers and violation of overtime laws. The companies were nor fair for the workers in the factories and working in those bad conditions. As described the majority of these theories, the Apple's decision to utilize unregulated overseas factories is very unethical. The company should, therefore, focus on finding a better way doing business regardless of whether it would negatively impact the profits.
Evaluation of Changes Approaches to Ethical Conduct of Business
Apple had received criticism due to the increasing worsening conditions at Foxconn factories in China. As explained in the case study, Apple has been outsourcing the manufacture of its products from China with the objective of increasing production at a lower production cost and ultimately maximizing profits in the long run. However, it has been accused that its prosperity comes at the expense of workers in Foxconn factories (Fox, 2013). There has been increased accusations of the poor working conditions, poor pay, employment of underage workers and poor management system.
In 2005, Apple established its first code of conduct in which there was a stipulation that suppliers are mandated to treat its employees with respect and dignity. It also pointed that all the manufacturing activities need to perform in the environmentally responsible way (Fox, 2013). During the era of Steve Jobs, Apple was quite secretive concerning their supplier list in which it did not provide the actuals lists suppliers during its audit reports. However this has changed during the era of Tim Cook, this stance seems to change. For instance, on January 13, 2012, there was the release of the supplier responsibility that stipulated the names of all suppliers. This change under Tim Cook has seen Apple join other companies such as Intel, Nike, and Hewlett-Packard who identify their suppliers to their stakeholders. Additionally, the reports released by Apple explained that approximately 108 facilities did not follow laws set in China concerning the amount paid for overtime work. According to the supplier's code of conduct by Apple, workers are protected from discrimination, they are treated fairly, there is no forced labor, and there should be underage worker employment and limitation of the working workers. Additionally, workers should be paid proper wages and benefits and given freedom of association.
The reason for this can be as a result of the emergence of the age of openness and transparency. Apple has been previously laden with a legacy of traditional close behavior in most areas of its operations such as how it deals with its suppliers. The change we see is a company becoming more open and transparent in various areas which is a change in increasingly being forced by the market forces which is requiring companies to become further open and more transparent (Fox, 2013). Concerning its suppliers, Apple is increasing become transparent and enhancing visibility after Tim Cook took over. The development of the age of transparency means that Apple cannot afford to keep its supply chain operations a secret.
The change seen at Apple after Tim Cook took over can be evaluated through the application of various approaches to the ethical conduct of business. There exist approaches that are source of ethical standard of conduct for the businesses and these include utilitarian approach, the rights approach and the virtue approach among others. First there is virtue approach to business which makes the assumptions on the presence of the specific ideas towards which the business should strive. The ideals gives a provision of full development of the humanity. It outlines virtues which attitudes that act as enablers of our action for the realization of full potential. Some of the virtues include honesty, courage, integrity, fairness and produce among others. The changes in Apple in accordance to this approach shows a case where the company is trying to force its suppliers into acting honestly and fairly to the employees working in their manufacturing factories. Another approach can be applied to the witnessed changes at Apple include the rights approach. According to this approach, an ethical action by a business is one that safeguards and respects best the moral rights stakeholders involved. The strategy is based on the belief that people has dignity and they have the ability to decide what they want with themselves. The changes at Apple is trying to promote the protection and respect of the workers at the Foxconn workers since they are the most affected by the manufacturing processes of the outsourced components. At Foxconn companies, workers are not allowed to choose what they want since they forced to work in bad conditions and work overt...
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