Ethical and Governance Issues Raised

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Table of Contents
2Discussion of case study2
2.1Identification of the Ethical and Governance issues raised in the case study2 2.2Critical analysis of the main ethical and the governance issues raised in the case study5 2.3An evaluation of the conditions that enabled the issues identified to arise7 2.4Recommendations to the company9



Apple is one of the most successful companies to date, they have dominated most of the markets they have entered, and all of this was able to become a reality because of Steve Jobs, the founder of Apple. He is seen as a somewhat genius when it comes to business, and his employees seem to be very satisfied, but what most people don't actually see are manufacturer workers of Apple, the employees in China who supply Apple’s products. We will delve into issues which have occurred at its suppliers over the past few years and will also investigate what Apple has done to rectify these problems. Finally we will present recommendations which Apple can implement to better the quality of life at its suppliers and thus become more socially responsible.

Discussion of case study

1 Identification of the Ethical and Governance issues raised in the case study

The main ethical issue raised in the case study is whether it is right for companies such as Apple to be solely focussed on profit maximisation rather than also bettering the lives of its stakeholders.

Apple has been highly successful in the past decade, having seen its share price soar thanks to its innovative products such as the iPod and the iPhone. In creating such products, they have become market leaders in their segments, and thus have been able to charge premiums for their products, which has translated into large profits for Apple. Steve Jobs, Apple’s CEO, has been credited with creating products that understand the needs of its customers before they even know they need it. With such a strong focus on its products’ human interaction and user experience, it is unfortunate that Apple has forgotten about the companies that have helped make it so successful, namely the Chinese manufacturers of its products.

In the drive for larger margins and lower product prices, Apple has forgotten to protect the quality of life of workers of its Chinese sub-contractors (Rein 2010c). The case study focuses on one such company, Foxconn, where six of its workers have committed suicide this year. This is widely presumed to be caused by the sub-standard working conditions. Last year, a worker accused with stealing an Apple iPhone prototype killed himself after being beaten by security guards (Rein 2010c). Physical abuse aside, there has also been reports noted in Apple’s 2010 audit that manufacturers are also making their workers exceed maximum stipulated working hours, not meeting occupational safety and health standards and are paying less than the minimum wage (Branigan 2010). The most recent outrage against Apple has been caused by the poisoning of at least 62 workers at Wintek, another Apple sub-contractor, due to the introduction of an unsafe chemical in the name of efficiency (Harvey 2010).

The case study notes two reasons why Apple should care about the issues brought up. The first is that Apple’s reputation has taken a severe media beating due to the events noted. However, this has yet to translate to any conclusive loss of sales or decrease in share price, and therefore Apple has not needed to swiftly act upon this. In addition, although publications on ethics and corporate citizenship rankings exist, there is a lack of consistency between lists that creates confusion and effectively devalue their importance and guidance (Coster 2010). For example, a company may be able to be noted as an ethical company by in large paying to be on the list. Nevertheless, the world is becoming more mindful of its ethical responsibilities, as seen with the push for corporate...
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