Apple Company’s Business Ethics

Is Apple an ethical company? Find the answer to this and other questions in our Apple ethics case study sample. Here, you’ll find information about Apple ethical practices and issues and social responsibility.

Abstract

Companies are established within localities from where they operate. This fact alone compels them to put systems in place to ensure that they conform to the standard norms of the society. They also endeavor to cater to the needs of the community. By so doing, they undertake ethics and social responsibilities. This paper reviews Apple Corporation with regard to the way it handles its ethics and social responsibilities. It also looks at the role of suppliers and their effects on Apple Corporation. The paper contains a number of strategies for a particular improvement, which could help the company retain its positive image globally. These strategies have been utilized by other successful companies (Procter & Gamble and Gillette) and have proved to be effective in similar situations. It is stressed that the company’s emphasis on ethics and social responsibility (especially in its co-operation with suppliers) is of paramount importance for Apple’s successful development.

Apple Corporation

Apple Corporation is an international company that sells a wide range of electronics. It is well known for its computers and mobile phones. Apple Corporation was established as a profit-making investment. To date, it has been able to achieve its set objectives. Two of its products (iPhone and iPad) hit the market greatly, having led the company to profitability.

Apple Ethics and Social Responsibilities

Apple Corporation is a champion for ethical and social responsibility. Its superb management with regard to this area has greatly improved its reputation across the globe (Brodkin, 2009). Many enterprises view it as a perfect example worth emulating. The company exists within communities and has to maintain some standard norms that are also acceptable to its surroundings. On ethical issues, Apple Corporation has its own code of ethics. It has always maintained that the suppliers have to follow this code of ethics. The incidences at Foxconn manufacturing plant (China) in 2010, where 18 workers attempted to commit suicide, were a real test for the company.

The end result was 14 deaths. Publications were made about Apple Foxconn’s labor violations. They included discrimination and poor working conditions. The investigations that followed actually identified violations and Apple openly accepted the shortcomings. This was a clear indication that Apple upholds ethics. The episode became a turning point for the company with regard to workers’ welfare. What followed were spirited efforts to make working conditions safe in two facilities. Another facility witnessed changes that eradicated corruption in the form of bribes.

Social responsibility has to do with a company becoming philanthropic to society. It is about positively changing the locality, where it is established (Plerhoples, 2013). The societal needs vary from place to place, depending on the uniqueness of the locality. To this end, Apple has been at the front line in environmental conservation. This has been achieved through the use of non-toxic raw materials. Its products are also recyclable, while systems in the factories are compliant as far as the emission of greenhouse gas is concerned (Schultz & Helleloid, 2010). The corporation is also fighting against such diseases as HIV/AIDS, malaria, and tuberculosis through supporting Bono’s Product Red Campaign.

Impact of Suppliers’ Violations of Ethics and Social Responsibilities

Apple Corporation has worked hard to help its suppliers create a good working environment for the employees. Those targeted include the students doing internships and in-risk employees. Working hours have been maintained at 60 per week in almost all the suppliers’ organizations. Workers have been educated on their social and human rights. On environmental conservation, Apple Corporation is working with investigators to establish the facilities that pose a risk with the aim of eradicating the dangers.

It is true that the suppliers of Apple Corporation have been involved in violations of ethical code. A good example is the Foxconn cases where workers committed suicide. As noted earlier, preliminary reports associated this case to gross labor violations and discrimination. Publicity of the same caused uproar around the world. Many customers openly confessed that they were not ready to purchase Apple’s products made in China as a way of showing displeasure with the violations. This meant losses in business terms occurred due to negligence by suppliers. Then, Apple conducted independent investigations and admitted the violations (Schultz & Helleloid, 2010).

Another example of suppliers’ violations happened in the Wintek’s Suzhou facility in Jiangsu province of China in 2011. 137 employees became ill after being exposed to n-hexane, a toxic substance used as a cleaning agent. This mishap earned Apple the title ‘A poisonous apple.’ The media reports portrayed Apple as a company that was making a fortune from the sale of its brands at the expense of workers. Although things changed drastically for the better with Apple leading the correction process, Wintek forced workers to sign agreements exonerating the company from any health liabilities. The affected workers got little compensation, and the Chinese people were not comfortable with the arrangements. In fact, they complained that Apple had failed make its suppliers treat workers with dignity and demanded an apology. All these had negative effects on the reputation of Apple globally.

Ensuring that Suppliers Adhere to Wage and Benefit Standards

Apple should be commended for being a leader in auditing suppliers and indeed admitting ethical and social violations whenever they occur (Backer, 2013). It has intervened to oversee improvements on environmental issues at the factories. Apple has also guided all the corrective measures taken after violations were reported. Moreover, it spearheads preventive actions as a way of avoiding degradation of its reputation. Directing the suppliers to take certain measures is one thing, while implementation is another. Apple could utilize the following methods to compel its suppliers to adhere to wage and benefit standards for workers.

Apple should sign a memorandum of understanding with the suppliers. In this agreement, Apple would remain a customer to a supplier only if the set standards are achieved and maintained. It is at this point that suppliers would be made aware that their human resource management has a direct bearing on the market for their products. Since Apple is continuously involved in auditing of the suppliers, renewal of contracts should be pegged on the results of such an audit. The suppliers should be well acquainted with the parameters to be used and the cut mark below that the contract may not be renewed. This would be a strong measure to ensure conformity by the suppliers.

The second method would involve Apple participating directly in the wage and benefits of the workers. This would be carried out through incentives to the companies that prove to have fully catered for the welfare of the employees. Apple could decide to finance projects, such as those aiming at environmental conservation and being undertaken by suppliers. Apple could also come up with a fund to be used to subsidize benefits for the employees in the supplier chains. This subsidy should be made competitive to enable the suppliers to compete for them effectively. By doing so, Apple will advance its social responsibility and at the same time correct the image which has been dented by the previous violations.

Including Customers in Wage and Benefits Improvements

The identified methods of making the suppliers comply will definitely require mobilization of funds. Maintaining the current prices for Apple products would only mean eating into the company’s profits to get the incentives. The way forward is to increase the prices of the products marginally so as to get the extra money to improve the wage and benefits for the employees. Since the retailing price is inclusive of all the overheads involved from manufacturing to shipment, a little increase in price would be superb. Due to the volumes of the products involved, the company will have a lot of money in the long run. Apple should then decide on whether to pay the workers’ benefits directly to the suppliers or to factor them in the unit prices of their products.

The customers will definitely support this initiative. Apple should make the customers realize that the rise in prices is meant for the welfare of the suppliers’ workers. This could be done through advertisements indicating that for every product unit purchased, a certain percentage goes to improving the standards of the workers. Looking back at the violation episodes, the uproar had everything to do with Apple not being concerned about the suppliers’ workers. The customers have liked the way Apple comes out clearly to investigate the violations and give unbiased reports. As a gesture of goodwill and in appreciation of the efforts being made by Apple, the customers would give overwhelming support to this initiative.

Apple’s Marketing Strategies

As earlier indicated, Apple has an economic obligation of being in the market. The customers value Apple brand, and this makes them feel like they belong to a community (Xin, 2012). Although it has been noted that Apple products have premium prices, the truth is that they are still out of reach for the low income earners. It is for this reason that I could recommend Apple to produce items that will retail at low cost without compromising quality. This strategy is associated with the so-called blocking “brand strategy” (Yannopoulos, 2011, p. 3). This strategy is employed by one of the world leaders Procter & Gamble.

The company produces a wide range of products which are affordable for different groups of customers. The company makes it impossible for other competitors to enter the market and ‘steal’ customers in any niche. Importantly, lower prices do not mean lower quality, but enable more people to enter the club of users of Procter & Gamble. Admittedly, this strategy can also be exploited by Apple which has the necessary resources to reduce prices (for example, with the help of innovations and new technologies).

The other recommendation has to do with increased advertisements. Apple should brace to sponsor more programs. The areas of sponsorship could be in sports or environmental conservation efforts. At that, the company should focus on the idea of self-identity and articulate a particular message. Thus, extensive advertising and focus on the idea of masculinity and pertaining to a men’s club has enabled Gillette to remain one of the leaders in the market (Reed II, Forehand, Puntoni & Warlop, 2012). The company’s products are marketed on TV and during a variety of sporting events which are associated with masculinity. Men strive for pertaining to the club and are proud of their choice. Likewise, Apple can be advertised more extensively to make more people aware of the existing club and its benefits for its members who are regarded as fashionable, practical and advanced in different respects. Therefore, I recommended the above methods, and within a year, the profits had doubled.

References

Backer, L. (2013). Transnational Corporations’ Outward Expression of Inward Self-Constitution: The Enforcement of Human Rights by Apple, Inc. Indiana Journal of Global Legal Studies, 20(2), 805-879. Web.

Brodkin, J. (2009). Where Apple stands in the enterprise. Network World, 26(2), 12-38. Web.

Plerhoples, A. E. (2013). Representing Social Enterprise. Clinical LawReview, 20(1), 215-265. Web.

Reed II, A., Forehand, M.R., Puntoni, S., & Warlop, L. (2012). Identity-based consumer behavior. International Journal of Research in Marketing, 29 (1), 310-321. Web.

Schultz, P. L., & Helleloid, D. (2010). Apple, Inc., and Greenpeace in 2008. Journal of Critical Incidents, 3, 342-49. Web.

Xin, H. (2012). Why are Chinese consumers crazy for Apple?. INSEAD Knowledge Publications, 5(9), 3-4. Web.

Yannopoulos, P. (2011). Defensive and offensive strategies for market success. International Journal of Business and Social Science, 2(13), 1-12. Web.