Apple Leasing & Computers Ltd is a Public Limited company that engages in the designing, production and selling of various technological devices, services and software applications. Apple has grown consistently over the past 42 years, this has been achieved through an expansion of its operations shifting its focus from mass device production to the introduction of services and softwares such as Apple pay and iCloud.Through their innovative schemes, apple developed a large market share, keeping consumers hooked onto their products, by providing “everything” a consumer needs, for example: creating the iPhone alongside iTunes( which is an online store that allows individuals to purchase music collections and store them on their phones, therefore acting as a phone as well as a music device providing convenience to the consumer).
Whilst this business has grown and become more popular amongst consumers, many consumers have been outraged at Apple’s negligence towards the mistreatment of their factory workers in China. As, part of Apple’s operations processes, the company outsourced it manufacturing from China, through a reputable Taiwanese company called Foxconn, It was found by various media sources that Foxconn were providing unbearable working conditions for these apple workers in order to rush the production of the iPhone 4, to be able to create enough supply before the product reveal event. The issue received mass media coverage on the 27th of March 2010, after the “suicides at Foxconn”. Due to these inhumane conditions 14 workers gave their own lives as a form of protest by jumping off the top of the 15 story manufacturing buildings. Where an audit of Apple’s factories in china demonstrates “serious” concerns over the extreme unpaid overtime working hours, health and safety failures, management interference with workers communication with trade unions and managers use of physical and psychological force to gain authority over its workers.
Apple’s unethical behaviour had a major impact on its stakeholders
This case would be also regarded as illegal, however, lack of proof for a case, it prevented this incident from proceeding in court.
Reports suggest that Apple were aware of these working conditions well before the suicides occurred, due to the amount of pressure Apple were putting on Foxconn in order to be able to complete the production in time. However, Apple denies this claim, whilst there is no way of knowing exactly whether Apple knew about the conditions prior to the suicides, Apple fall into a state of negligence, as they did not monitor and provide their employees with the appropriate human resources required to have a stable wellbeing, where employees could take their concerns to. Therefore resulting in an unethical matter where Apple had to choose between their workers wellbeing or their profits and income.
Apple was placed in an ethical dilemma, as they had a few feasible options to consider, in order to maintain their strong reputation as well as ensure that there wasn't too big of a cost to the business. This included finding a new producer, changing the leadership style that Foxconn practice and therefore helping to improve the overall working conditions, or their could have just not have taken any actions at all. Due to this ethical dilemma, Apple had make a decision about which option that they wanted to pursue, that would have the least amount of expenses to the business financially as well as to its reputation.
By hiring a new manufacturer, it would cost Apple; time, financial expenses, and possible decline in quality. As, the new manufacturer would need to understand and develop the devices to Apple’s high quality standards in order to meet and satisfy the consumer’s needs and expectations, and if these standards cannot be met then that will mean that Apple’s reputation for “producing quality” will fall. However, by hiring a new manufacturer, Apple would gain a more positive response from consumers, as it demonstrates that Apple cares for its workers, by eliminating any forms of unjust and inhumane conditions.
Improving working conditions for Foxconn employees and their families; would also benefit Apple in various ways, as it would motivate and encourage employees to continue to work, whilst making the employees feel valued; as it will demonstrate the company cares about them. Therefore, improving the overall output of the manufacturing, as the employees would share the business goals by feeling valued. This would also result in a better media reputation, less manufacturing time and no more lives at risk. However, the cost to this approach would be the fact that Apple would have increased expenses, to be able to facilitate a program that achieves mends with the families of those that had committed suicide as well as developing better working environments for employees.
The decision to take no responsibility or performing any major actions would mean that Apple would have various costs with little benefit. By taking no action, the company would face a loss of stakeholders, as consumers would not want to purchase Apple’s products; knowing the people have given their lives attempting to make them, resulting in shareholders wanting to sell their Apple shares. This would also lead to a deterioration of Apple’s reputation, providing competitors such as Samsung and HP with an upper advantage, in attempting to gain Apple’s market share. Whilst the current benefit Apple would be that there would be no expenses on the suicide and Foxconn incident.
Apple chose to adopt an approach to improve overall working conditions for it employees, whilst also compensating the suicide victim’s families. This decision has had both a negative and positive impact upon the business.
This approach cost the company at around 200000USD.