Global Supply Chain – Apple

Global Supply Chain – Apple

Key Points

‘Apple and its Suppliers’ case (Lee et al., 2016) delves into Apple’s employee mistreatment and the state labor rights amongst its Chinese partners. One of the cases in 2009 was in the company’s China-based partner-Foxconn. Another issue relating to Apple’s poor employee rights status occurred at Pegatron, another China-based Apple supplier specializing in assembling iPhones. Despite Apple’s efforts to undo the poor image created by the incidents, they brought to light the company’s poor labor rights record.

Apple’s poor labor rights practices were initially highlighted at Apple’s Taiwan-based supplier Foxconn. When an employee committed suicide after losing an iPhone prototype, the company became prominent. Investigations revealed that the employee was subjected to interrogations akin to torture after the incident (Lee et al., 2016). Further investigations revealed that 14 more people died at Foxcomm’s premises in the past.

Other labor rights non-compliance practices were reported at one of Pegatron’s factories in China. The factory forced employees to hand in IDs before entry. Also, employees were not offered training on health standards and safety and were forced to work extra hours. Some employees would work for 16 hours a day for 18 consecutive days. The conditions outside the factory were equally worse as employees were forced to sleep in congested dormitories.

These issues highlight employee-related CSR difficulties the company faces along its global supply chain. One of the challenges is the complex and varying cultures among different nations (Lee et al., 2016). Most of Apple’s global production is based in China, Japan, and Taiwan, among other nations with poor labor rights records. There is little the company could do to reverse employee mistreatment. Another probable cause of labor rights non-compliance is the complex supplier-buyer relations (Lee et al., 2016). Apple is known to squeeze its suppliers so hard that they have to devise other means to enhance profits.

Corporate Social Responsibility (CSR)

Occupational safety is one of the crucial aspects of employee-related corporate social responsibility. Companies should analyze the safety risks of their workplace environment and make necessary changes if there are shortcomings (Chen et al., 2020). Occupational risk evaluation will also help organizations preserve their social perception and avoid financial losses that result from compensation.

Another aspect of employee-related CSR is employee training. Training helps employees embrace a company’s corporate values, culture, and good behavioral habits. Henceforth, the employees work well in a diversified environment and improve knowledge acquisition (Chen et al., 2020). The third employee-related CSR aspect is growth and care. Promoting employee welfare enhances staff satisfaction and a sense of identity (Chen et al., 2020). Consequently, the employees’ productivity improves, boosting the whole company’s productivity.

Public Opinion

The media and public opinion played a significant role in reversing the misdeeds of Apple’s suppliers in the China-based factories. After reporting the Foxconn incident, the media brought to light issues that would otherwise remain a secret. Also, BBC reported the Pegatron crisis, further damaging Apple’s CSR position. Media reporting and public opinion have essentially held the company accountable and pushed them to uphold employee safety standards.

International Business

Although Apple did not directly commit the labor rights violation issues at Foxconn and Pegatron, the company was held directly liable for the labor rights violation at the two China-based subsidiaries. Businesses involved in international business need to incorporate CSR into the supply chain (Tekin et al., 2015). Therefore, the mother company must foster acceptable CSR factors while minimizing the negative effect on the environment.

Accordingly, businesses that wish to enforce CSR must only associate with partners that uphold ethical and safety standards. Apple would rather forgo cheaper products from Pegatron and Foxconn and go for relatively expensive ones from other partners upholding labor rights. A global business ought to sacrifice to enforce CSR along its supply chain (Tekin et al., 2015). Upholding global supply chain CSR calls for businesses to look beyond the traditional factors; time, quality, and cost.

Labor Practices

According to the International Labor Organization (2015), a common labor practice among multinational companies is the minimum wage requirement. The advantages of embracing minimum wage include less government support and motivation among employees. Conversely, the disadvantages include higher labor costs for companies and a decline in competitiveness. Another common global labor practice is the working time standard. Setting an acceptable minimum working time improves workers’ performance and satisfaction and reduces staff turnover in a business. However, reducing working hours means an opportunity cost loss on sales to competitors.

The Road Ahead

The best option for Apple Inc. is to monitor its global supply chain. Monitoring the supply chain will help the company detect deviations from acceptable labor standards among its business partners. By monitoring its supply chain, the company will uphold respect for human rights and ensure employees are treated respectfully.

References

Chen, H.-L., Hu, Y.-C., Lee, M.-Y., & Yen, G.-F. (2020). Importance of Employee Care in Corporate Social Responsibility: An AHP-Based Study from the Perspective of Corporate Commitment. Sustainability, 12(15), 5885. https://doi.org/10.3390/su12155885

International Labor Organization. (2015). The Benefits of International Labour Standards. Ilo.org. https://www.ilo.org/global/standards/introduction-to-international-labour-standards/the-benefits-of-international-labour-standards/lang–en/index.htm

Lee, S. H., Moi, M. J., & Mellahi, K. (2016). Apple and its suppliers: Corporate social responsibility.

Tekin, E. K., Ertürk, A., & Tozan, H. (2015). Corporate Social Responsibility in Supply Chains. Applications of Contemporary Management Approaches in Supply Chains. https://doi.org/10.5772/59582

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Read the case study Apple and Its Suppliers: Corporate Social Responsibility, taking careful note of examples and explanations of Apple’s views on corporate social responsibility, countries involved in the supply chain, and whom the public held responsible for the ethical violations.

Specifically, you must address the following rubric criteria:
• Key Points: Briefly summarize key points that the case raises, such as who was involved; key problems and concerns identified; and questions about corporate social responsibility, public opinion, and/or international business.
• Corporate Social Responsibility: Explain how corporate social responsibility, specifically related to employee treatment, is important to a business.
• Public Opinion: Explain how the media and public opinion influenced the situation and what lessons a business practitioner can learn from Apple’s experience with how the media and the public can impact business.
• International Business: The case states that although the concerns regarding poor employee treatment were related to events at manufacturing facilities such as Foxconn and Pegatron, the concerns regarding corporate social responsibility fell to Apple. Explain what this can teach business professionals about international business and supply chain management.
• Labor Practices: Compare the advantages and disadvantages of commonly used labor practices in international business.
• The Road Ahead: The end of the case raises a few questions regarding how Apple should proceed. On the basis of what you have learned in this module and throughout the course, explain how you think Apple should have proceeded following the incident outlined in the case and why. Make sure to use evidence from the course and/or external resources to support your response.

Guidelines for Submission
Submit this assignment as a 400- to 750-word Microsoft Word document. Sources should be cited according to APA style.