Apples Ethics and Social Responsibility

Apples ethics and social responsibility

In researching the Apple Company’s Social (Supplier) and ethical responsibilities I found that their initiatives are geared toward Empowering Workers, Labor & Human Rights, Health & Safety, Environment and Accountability. I think their approach is interesting but I feel that a large company like Apple can do way more for the local communities and country as a whole. Apples stance on empowering their workers is a wonderful thing. I think more companies need to recognize that a happy workforce makes for an overall greater employee and customer experience.

Apple Inc. employs staff all over the world and is committed to treating employees with respect and dignity. The company provides educational resources for all of their employees giving them the opportunity to earn an undergraduate degree.

Apple has very high standards and expectations in the industry. They provide their employees with the appropriate tools necessary to meet the high bar set forth; communicate and maintain a safe and respectable workplace.

Improving health and safety is essential and all workers receive the appropriate education on the topic. All apple suppliers must work alongside of apple to reduce their environmental impact and use a number of methods to identify risks. Apple believes in accountability for themselves and suppliers and has strengthened their code of conduct to meet the responsibility standards. In my opinion Apple has not quite met their Social Responsibility standards, and can do more. In 2012 the NY Post reported that Apple was trying to get rid of the reputation as stingiest company. They made over $150 million in charitable donations split between multiple organizations that year. They donated 500,000 to “SF Gives” in May of 2014. But giving back has never been an immediate priority of Apple as Steve Jobs stated. Not to mention all of the negative publicity Apple has received in reference to the working conditions of their overseas warehouses.

Apple’s Reputation

Have you ever heard the saying you are “guilty by association”? Unfortunately that is the way the world works. Foxconn is the main producer of Apple’s products along with a number of other well-known companies. Based out of China the Foxconn-Apple warehouse that employs over 500,000 workers has been in the media in recent years regarding violation of the Labor & Human rights laws. In July 2009, an employee at the Foxconn warehouse that makes iPad committed suicide after his home was raided; he was badly beaten and humiliated over a missing iPhone. In a report released in early 2011 by the Guardian there were a large number of suicides from Foxconn-Apple facilities in China. It is said that the tragic suicides were a result of the employees being overworked and deplorable working conditions.

The guardian also reported in late 2012 91 children working at one of Apple’s Foxconn suppliers which is almost ten times more than what was reported in the previous years. This does not meet the very high standards set forth by the company in the eyes of the general public. In 2009, 137 employees were poisoned by n-hexane use at one of the Apple- Wintek LCD plants in East China. N-Hexane is a narcotic that attacks the nervous system when exposed to it. This poison was used for drying touchscreens in order to speed up production to fill larger orders received by the factory. Most of the workers impacted were forced to resign and absolve Wintek of all future responsibility. It is rumored that Apple and Wintek were very slow to react to the incidents. Apples reputation has definitely taken a hit from the negative publicity surrounding their overseas suppliers.

In an effort to clean all of this up Apple has vowed to eliminate child labor and excessive work hours throughout the complete supply chain. They want to ensure that the supplier code of conduct is being enforced and practiced at all times. Foxconn has taken steps to prevent future suicide attempts by installing preventative suicide nets around their buildings, providing counselling and requiring employees to sign a no-suicide agreement prior to employment. Apple has also prohibited the use of n-hexane and states that the product is no longer in use at any facility associated with the company.

Suppliers Adherence to Wage and Benefit Standards

The various labor practice violations among Apple’s suppliers still remain very high. In 2012 China Watch reported- after investigating the working conditions of 10 of Apple-Foxconn facilities. They determined that it was not only the Foxconn facilities with deplorable work conditions, but it exists within Apple’s supply chain. According to epi.org Apple itself finds that in more than 28% of cases, suppliers are not compliant with the wage and benefit standards set. In early 2012 the Fair Labor Association (FLA) conducted a month long investigation and uncovered significant issues at three Foxconn facilities in China. Among the issues found were -excessive overtime, issues being compensated for overtime, severe communication gaps which led to unsafe working conditions amongst the workers and an overall unhealthy deplorable environment.

Although Apple is “committed” to ensuring fair Labor and Human rights, they should take additional steps to enforce their Supplier Responsibility Standards. I’d first recommend for the company to have a significant increase in the number of independent audits performed annually on overseas warehouses. This will help ensure that employees are not working excessive overtime or receiving lower than minimum wages. Communication is an absolute necessity in large warehouses, and every incident should be documented. The audits can also be vital in making sure that the workers are in a reasonably safe and healthy environment. Apple Inc. needs substantial improvement in the realm of transparency and secrecy in order to eliminate labor rights abuses by its suppliers.

The majority of the company’s “secretive practices” involve the complete supply chain. Some of their factories are said to be gated off and have police /security to prevent trespassing, workers must sign confidentiality agreements and live in dorms within the factories. Apple reports the percentage of their suppliers that violate the code of conduct, but will not release the names of the actual facilities that were not compliant. The company needs to be more forthcoming and discontinue the secretive practices that prevent the general public from observing working conditions and business practices within its suppliers.

Customer Loyalty

Apple has a very loyal customer base despite the despicable acts the company has been associated with throughout the years. In my opinion, most of their customers are working class and know how vital it is to be reasonably compensated for their work. Apple’s customers may have some concerns if the prices increase, but they will buy the products. You may have a customer like me that feels like the current price point of Apple’s products is already high. There are four Apple products in my home 1- IPad 1-Ipad mini 1-MacBook and an IPhone 5s totaling close to $4,000 retail. That is how much Apple made from 1 household in a matter of a year. If all of their customers are paying those types of prices, that is more than enough for Apple to ensure that all workers have reasonable wage and benefit packages.

This is a company that has customers waiting in line for days to buy new innovative products regardless of the price. Apple is known for making a higher profit by paying overseas companies next to nothing for production. As I previously stated Apple customers are very loyal. I believe the customers would pay more for products if the prices increased. Simply because once you start using apple products it’s like you have to have the next best thing. They definitely live up to the reputation of providing new technology and innovative top of the line products. The company may receive negative feedback from current and new customers, but they will still buy the products out of necessity.

Apple’s Marketing Approach

In my opinion Apple’s overall marketing strategy is one of the best in the industry. Anytime a new IPhone is released customers wait in line for days leading up to just to get the latest and greatest. Online orders go through the roof and the waiting lists get quite long. So clearly Apple is doing something right to market their products to customers. According to Forbes magazine Apple is such a great marketer that they won the 2012 CMO Survey Award for Marketing Excellence and has been the co-winner for five consecutive years. In the late 1970’s Apple adopted a 3 point marketing philosophy that remains at the core of their brand today. The original three points are Empathy, Focus and Impute and are taken into consideration when implementing current market strategies. Apple is known to have top of the line products and technicians to match.

Their employees are very knowledgeable and eager to assist in giving their customers the best experience possible. That will take any company a very long way as customer satisfaction and experience is vital to the success of any business. On paper Apple looks great, but in order to improve its competitive advantage in the global marketplace a few recommendations should be made. The Apple logo is one of the most recognized, respected and trusted names in the world today. Apple has already established competitive advantage in the global marketplace around constructing a top of the line, small and innovative product line.

I feel like they should continue to put time and resources into capitalizing on the advantage and enhancing the reputation of the Apple brand. Things appear to be going great for Apple, but achieving an ongoing competitive advantage requires constant monitoring of the organizations competitive landscape. Openness to rethinking the company’s current advantages is vital in remaining competitive.

Works Cited

Apple Inc. (2013). Supplier Responsibility Standards. http://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_Responsibility_Standards.pdf. China Labor Watch. (2012). Beyond Foxconn:Deplorable Working Conditions Characterize Apple’s Entire Supply. http://www.chinalaborwatch.org/news/new-415.html. Christine Moorman, Forbes. (2012). Why is Apple a Great Marketer. http://www.forbes.com/sites/christinemoorman/2012/07/10/why-apple-is-a-great-marketer/. Connie Guglielmo, Forbes. (2012). Apple’s Supplier Labor Practices In China Scrutinized After Foxconn, Pegatron Reviews. http://www.forbes.com/sites/connieguglielmo/2013/12/12/apples-labor-practices-in-china-scrutinized-after-foxconn-pegatron-reviewed/. Dunstan Pria, Fox. (2012). Apple’s Chinese Manufacturer To Fix Labor Violations. http://www.foxbusiness.com/industries/2012/03/29/apples-chinese-manufacturer-to-fix-labor-violations/. Fair Labor Association. (2012). FAIR LABOR ASSOCIATION SECURES COMMITMENT TO LIMIT WORKERS’ HOURS, PROTECT PAY AT
APPLE’S LARGEST SUPPLIER. http://www.fairlabor.org/blog/entry/fair-labor-association-secures-commitment-limit-workers-hours-protect-pay-apples-largest. Scott Nova, Isaac Shapiro, EPI. (2012). Polishing Apple Fair Labor Association gives Foxconn and Apple undue credit for labor rights progress. http://www.epi.org/publication/bp352-polishing-apple-fla-foxconn-labor-rights/.