Apple Inc. is a U.S. multinational technology company headquartered in Cupertino, Calif., which designs, develops and markets consumer electronics products, computer software and online services. Apple has been criticized for its unethical business practices, such as anti-competitive behavior, rash litigation and suspicious taxation strategies, involving production methods using sweatshop labor, customer service issues involving misleading guarantees and inadequate data security, and Product ‘environmental footprint. Critics say Apple’s products incorporate a stolen and/or purchased design that is said to be its own original work.
In addition, it was criticized for its cooperation with the US surveillance program PRISM. In this paper I will review the ethic conduct of Apple Inc. as well as its practice in business ethics.
Apple is known as the innovator of the technology market. Apple is notorious for its iOS infrastructure and outstanding customer service. It may be surprising to find that Apple has a dark side. Like most companies, Apple’s products are made in China.
However, Apple’s Chinese employees were forced to work overtime far above legal limits, poor working conditions and high suicide rates (Moren, 2014). Apple recently had to pay a $450 million pricing plan for raising prices on Amazon.com.
Apple’s abuse of their employees is an important reason for legal attention. Because workers have to work under poor working conditions, Apple may face legal problems from the Chinese government, and the conditions in the dormitory are even worse. The Chinese government can also sue Apple and force workers to work overtime, exceeding the legal threshold.
Apple is the main defendant of the price monopoly case. This is an important reason for legal concerns. In this price plan, Apple reduced publishers’ profits by 30% (Patel, 2012). So not only did Apple try to come up with rival Amazon, but they were paying for it when they did it.
The typical apple consumer is very environmentally friendly. Apple has positioned itself as a green company and its plan includes recycling old phones. However, Apple has never been selected in ‘Fortune’ magazine’s ‘100 Best Companies to Work For’ (Hawthorne, 2012). This may be partly because Apple is becoming a synonym for unethical behavior. Employees are treated unfairly, and in China, employees are even forced to commit suicide. This is not the mode that the community is pursuing.
In order to restore Apple’s reputation to a good state, the first thing they should do is increase their focus on foreign factories. They need to be diligent and have third-party investigators to audit these factories. Second, Apple also needs to increase its share of profits with foreign factories. Chinese factories have little profit, and the increase in cash flow will relieve some of the pressure and allow the factory to invest in better security and employee relations. Third, Apple needs to put the e-book price plan behind it. They are currently planning an appeal, while other plaintiffs have just paid and moved on. Apple doesn’t need to drag its name into the mud.
The advantage of having third parties investigating foreign factories is that they are not biased and when they are employed from abroad, they are more aware of the laws relating to the country. The downside to third-party investigators is that they are costly and sometimes only for money. The advantage of sharing profits with foreign factories is that employees have better working conditions and a lower suicide rate. The downside is that Apple’s shareholders have less pockets and may invest less in new technology. The advantage of putting the price plan behind them is that they can move forward with a clean slate and admit that they made a mistake. The downside is that their reputation will always be damaged, and their profit is 450 million US dollars.
Employee morale can benefit from third-party audits because auditors will be able to identify key issues and help solve them, thereby making employees happier and safer. Employees will benefit from increased market share because the money will provide them with better working conditions and will not have to work for hours. Employees will benefit from e-book programs because profits are not wasted on litigation and can be used when necessary. Once employee morale increases, employee behavior will in turn increase.
These ethical issues affect the organizational culture. Due to substandard work conditions, you tell your employees that they are not worth the time. Organizational culture is that you are a pawn, we are using you to make a lot of money for us, but you are not worth investing to meet basic human needs. By having such a negative attitude in your organizational culture, morale will decline and productivity will decline. Organizational culture has a trickle effect. Apple quoted them as saying ‘no fault’ regarding the pricing plan (Gibbs, 2014). This organizational attitude affects all employees and needs adjustment.
To allow Apple to correct this situation, management needs to perform the following three steps. First, all management needs training to understand the importance of not employing underage workers and the importance of maintaining appropriate working standards within the company. Second, Apple needs to work directly with Foxconn to rewrite the code of conduct. Third, Apple needs to work more directly with foreign factories to ensure that the right conditions are met.
The advantages of management training are to reduce the number of minors employed and improve working conditions. The disadvantage of training is cost, which may not be effective if management does not take it seriously. The advantages of rewriting the Foxconn Code of Conduct are to improve the understanding of employees and the improvement of overall behavior. The downside is that it is time consuming, and if you don’t take it seriously, you run the risk of doing nothing. The advantage of Apple’s more direct cooperation with foreign factories is that Apple will truly understand what’s going on there and its ability to solve problems, not afterwards. The disadvantage is that flying from California to China is very expensive and time consuming.
According to the liberal egoistic theory, Apple wants to take care of the welfare of employees and their own benefits. Under this model, they still hope to increase profits and produce new products to remain competitive, but they will consider their workers more. Apple wants to ensure that employees are well cared for while still producing large quantities of products at the lowest possible cost.
According to the utilitarian approach, Apple wants to ensure that the most people get help or create maximum effectiveness. In this model, Apple will consider getting the number of customers they want and the number of beneficiary shareholders. In this model, Apple will not change the way because the number of people benefiting exceeds the number of Chinese employees suffering.
According to moral theory, individuals are more important than creativity. In this model, Apple will pay more attention to its foreign workers. Apple will realize that these people are more important than the money they make. In turn, Apple will do its best to help foreign employees.
Turning to Apple, enlightened egoism is the way to go. This model talks about the delicate balance between making money and caring for individuals. In order for Apple to continue its business, they must continue to make money. This means satisfying stakeholders and attracting consumers. All of this can be done while taking care of domestic and foreign employees.
In the case of Apple, the next best idea to use is Deontology. In this mode, most people will get help. Apple makes a lot of money every year, and even if some profits return to help foreign employees, stakeholders will still be well taken care of. Morality believes that the greater interests of individuals are more important than the creation of utility. This means that everyone can benefit from the Deontology model. Stakeholders can still earn a lot of money while helping all shareholders. Although ethics is a good second choice, there is a risk that this model will focus too much on the individual and put the business on the afterburner. By placing the business on afterburners, the risk of completely losing business is high.
For Apple, the utilitarian model is a bad choice. This model completely ignores the employees in order to make money. Businesses need to make money, but it is important to take care of all shareholders, including employees. Through all the media available today, companies have to surpass the dollar and realize that consumers want to ensure that they care for their employees.
In the enlightened egoism model, Apple needs to increase its share of profits with foreign factories. This will make the greatest benefit. Staff at Foxconn and other foreign factories need to improve working conditions. This will increase employee morale and reduce the number of accidents and suicides. By improving the working conditions of employees, Apple will obtain higher quality products. In this case, everyone wins.
In an enlightened egoism model, the best option is Apple’s implementation of management training, with a focus on not hiring underage employees and maintaining better working conditions. Most people will benefit from training management. The training will benefit all employees because the training will be able to penetrate the bottom employees. Pay more attention to the importance of good.
According to Apple, it is expected that improvement will begin within six of implementation, and overall improvement will improve within two years. It is important to understand that it takes time to produce training materials, train employees and implement these ideas. Improvements can be monitored through continuous reevaluation of standards and employee reviews. The type of improvement that should be expected is better working conditions. Lighting should be sufficient and space should be clean and safe. In the dorm room, there should never be more than the room to stay. The working hours of workers should never exceed the legal time limit. When violations are found, corrective actions should be taken.
However, the working conditions for workers and suppliers’ employees are not the only factors that affecting Apple’s reputation in business ethics. There are far more things to improve for this company.