Ethics and Apple

Based on my research, I believe that Apple is acting in an ethical manner according to the definition of purchasing ethics. Purchasing ethics means following a code viewed as fair by those in the profession as well as the community. Apple is embracing its sense of corporate responsibility by increasingly involving itself in the improvement of Foxconn’s working conditions. However, Apple should do more to force Foxconn to improve their operating conditions, by increasing workers’ wages, decreasing working hours, and enacting policies to keep employees from going to school or leaving Foxconn. In light of the recent and high amounts of suicides as a result of the working conditions, United States consumers should care about Apple’s use of Foxconn to produce their products. From an ethical standpoint, Apple should use a hybrid strategy: continue to outsource to Foxconn on a limited basis while bringing some manufacturing capabilities back to the U.S. Employing this strategy requires that Apple instruct Foxconn managers and employees about ideal manufacturing tactics that can be transitioned into the China plant.

Situation

Over the last few years, Foxconn employees worked anywhere between 12 and 16 hours a day, 6 days a week. Due to the long hours, heavy workload, and working conditions, many Foxconn employees committed suicide to escape machine-like work. In response, Foxconn installed suicide prevention netting at some facilities, and forced workers to sign a legally binding contract guaranteeing descendants would not sue the company as a result of suicide, self-injury, or unexpected death. In addition to this, the current wages paid at Foxconn do not adequately cover the basic needs of 64% of 35,000 employees surveyed by the Fair Labor Association. Even a 2012 audit performed by the Fair Labor Association still found that workers routinely received insufficient overtime pay and suggested that workplace accidents may be common. Even worse, Foxconn has prevented students from going back to school and forced them to work in factories. As a result of working conditions for one of Apple’s biggest suppliers, there has been a public outcry for Apple, one of the most profitable and influential company in the world, to step in and force Foxconn to follow a code viewed as fair by those in the profession as well as the community. Since then, Apple has taken steps to improve their corporate social responsibility.

Improving Corporate Social Responsibility

The public views of Apple’s suppliers are viewed as an extension of Apple. Apple’s influence has facilitated a huge demand for Apple products. To meet this demand, Apple has directly and indirectly employed thousands of workers. For this reason, it is important that Apple takes corporate social responsibility to provide fair wages, working conditions, and benefits to a company that mainly exists because of Apple. Since Foxconn was brought to Apple’s attention Apple has done the following to improve ethical operations at Foxconn:

1.) Apple involved the Fair Labor Association: The FLA is a nonprofit organization whose purpose is to protect worker’s rights worldwide. They set a code of conduct, monitor and report on companies, and give clear guidance and support to uphold these standards. The FLA shows Apple’s ethical actions and corporate social responsibility in two ways. First, they promote transparency by bringing light to what goes on at Foxconn. The FLA is not biased and will not hide facts from their audits. This puts more pressure on Foxconn and Apple to comply with universally accepted working practices when brought under more public scrutiny. Secondly, because the FLA has guidance, experience, and most importantly measureable standards, it allows for the constant tracking of how Foxconn is changing, and sets goals of where they need to be. Taking this step shows Apple is taking a huge step towards maintaining its standards of ethical behavior, across its supply chain.

2.) FLA and Apple audited and set measurable goals for Foxconn: Since Apple started working with the FLA, both Apple and Foxconn agreed to make improvements on working conditions. This began with an Audit of Foxconn’s current working conditions. In March, the FLA audited Foxconn and gave them a checklist of what they needed to improve upon. Since then, Apple has corrected 195 of the actions due, and further corrected 89 ahead of deadline. Both companies have until next year to correct the remaining 76 issues. The FLA is very satisfied with Apple’s diligence to improve working conditions at Foxconn. Apple and Foxconn are taking aggressive steps toward making changes to improve their working conditions.

3.) Foxconn worked with Apple to reduce working hours: One of the biggest problems with Foxconn; was that workers had been working to meet the demand from Apple. This proved a monumental task that led to many worker suicides. Since then, Foxconn has reduced hours to under 60 per week, and has a goal to reach full compliance of the Chinese legal limit of 40 hours per week. To accomplish this, they are also hiring more workers to meet the demand without overworking all employees. This improves the working conditions tremendously by putting less stress on each individual employee. Hiring more workers means that Apple is committed to the ethical standards set, even if it means additional costs.

Areas of Improvement and Importance
Apple has shown its commitment thus far to improving the unethical working conditions. For that reason, Apple is acting ethically, even if the current conditions are still deemed unethical by the public. Apple could do more to change unethical operating conditions, such as not providing chances for students to leave Foxconn. However, this process becomes difficult for large companies and in the wake of various cultural boundaries. Instead of throwing more money at the situation, Apple has taken steps to fix the root of the problem by fixing the inhumane working conditions and hours worked. To meet demands for better working conditions at Foxconn, Apple is committed to the FLA’s thorough and goal oriented approach.

If the community demands more of Apple to treat Foxconn employees with better working conditions, it becomes a question of whether or not Apple could do it without driving up the cost. If costs significantly impact Apple’s bottom line, Apple may want to rethink its outsourcing strategy. To maintain profitability, Apple holds the responsibility of ensuring its products are produced ethically. Continuous scandals relating to Apple products will hurt consumer image of Apple, especially if those who own Apple products feel as if negative working conditions associated with the product outweigh its perceived benefit. Consumers should care about how Apple uses Foxconn, but should be more concerned with what Apple is doing with their huge influence to change the world’s standard for working conditions. Ultimately, it becomes a question of more than the actions of Foxconn. Apple represents the United States drive toward fair working conditions, and has the opportunity to take action on a huge scale where an individual alone cannot.

Future Implications

For now, Apple should continue to outsource to Foxconn. Apple provides thousands of jobs for employees and should stay in China to utilize their strength of manufacturing material, and our strength of managing and innovating. This altruistic behavior is better for us currently, because by collaborating, the US and China perform better, the whole world stands to benefit. In the long term, the effects of working conditions in China and their workforce will provide a form of guidance that will transcend into better working conditions for everyone. Overall, changing working conditions in China, beginning with Foxconn, sends a worldwide message to treat workers better. This option would be better than Apple bringing its manufacturing operations back to the United States without using their influence to alter manufacturing conditions worldwide. If Apple succeeds, consumer image of Apple will flourish. Knowledge that Apple products are manufactured under ethical conditions will drive apple into a successful future, make working conditions better for Apple-associated companies, provide companies with more opportunities to do business with China, and it will provide workers across the globe with an improved and ethical working environment.