Int-220_Global Dimensions

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Apple’s Global Responsibility 1 Apple’s Global Responsibility INT-220-Global Dimensions in Business As of 2020, Apple is the number one brand worldwide with a brand value alone standing at $241.2 billion. ( The 2020 World’s Most Valuable Brands , n.d.) Within the last couple of years, Apple has been in relationships with suppliers that have been accused of ethical matters regarding labor rights violations. The first incident occurred with Foxconn in 2009 and the second followed just five years later with Pegatron. (Ivey, 2016) The Foxconn matter was caused due to workers committing or attempting suicide, and workers dying at manufacturing facilities due to poor labor practices and working conditions. (Ivey, 2016) Various stakeholders, non- governmental organizations, the media, and Apple customers began to pressure Apple to improve the working conditions of the suppliers they have relationships with because of this Apple made a public promise to improve its practices and stand behind what the company believes and represents. Following this incident, Apple moved business away from Foxconn and to Pegatron in China to improve its labor practices and leave Foxconn behind. Pegatron seemed like the solution to the matter that occurred in 2009 but just in 2014 Apple and Pegatron were accused of violating labor conditions, 86 Chinese legal and ethical regulations. (Ivey, 2016) This caused Apple to be under fire again by the same entities as before, but now they were viewed as a company with broken promises as well. Questions arose regarding who should hold responsibility for matters like this, whether to bring international manufacturing and business back home, international responsibilities of international businesses, and what are the true interests of the public. Corporate social responsibility, CSR, is a broad and evolving business approach used by international businesses that helps uphold what companies represent by delivering economic,

Apple’s Global Responsibility 2 social, and environmental benefits for all stakeholders. (P. Dunung, 2019) Ethically oriented practices are strongly encouraged when using this business model and employee treatment falls under following this practice. An international business’ social standards include reviewing and understanding how it manages relationships with employees, suppliers, customers, and the communities it operates in. (P. Dunung, 2019) Apple continued to fail to follow, maintain, and regulate CSR’s encouraged ethical-orientated practices even after its relationship with Foxconn affected the brand and its company causing it to move toward Pegatron. (Ivey, 2016) The media and public opinion hold a great deal of influence over a company’s practices, solutions, and whether they choose to follow an ethical path or not. The media was the source that brought to light the Pegatron crisis and violated 86 Chinese regulations that increased Apple’s involvement in the supplier’s labor practices. (Ivey, 2016) This influence can be just as negative as it is positive when companies make promises to the public regarding their products. Apple’s statement saying ‘making complex things simple’ had an effect that affected how they chose to follow ethical practices because the simplifications had their limits. (Ivey, 2016) In trying to fulfill this task other practices were disregarded and not maintained and reviewed as frequently as needed which resulted in Pegatron not following Apple’s standards it had placed on it. Apple held a great deal of responsibility regarding the Pegatron crisis because of its promise after the Foxconn incident. (Ivey, 2016) When doing business internationally one must consider what the brand represents and how they will choose to continue to express that even overseas. Brand representation overseas is done by understanding how chosen suppliers manage their facilities and employees because it creates a relationship and is connected to the brand conducting business. In Apple’s case, they had fallen short of this with Foxconn and continued to

Apple’s Global Responsibility 3 with Pegatron just five years later. Other businesses can learn from this by considering the effects of choosing a supplier that does not align with the company’s standards or ethical standards. As a company travels outside of its own country, labor practices change and usually lean toward being more lenient regarding labor rights. This can create both advantages and disadvantages for a company choosing to outsource. Advantages that can come from outsourcing are increased flexibility at disruption times, negotiating lower rates, and switching between suppliers with minimal loss of time and resources. (P. Dunung, 2019) These can all assist a company by increasing profitability in the long run and having better control over the prices of products. Some disadvantages that can arise with the advantages are decreased quality control, decreased influence over suppliers, and increased coordination and management costs. (P. Dunung, 2019) The disadvantages together create a less controlled supply chain when it comes to ethical practices especially when companies do not maintain and review the supplier’s practices continuously. Outsourcing can be a beneficial aspect of a company, but challenges always arise, as we saw with Apple. For Apple to properly move forward and away from these incidents, more needs to be done other than placing standards on suppliers when working with them. Although placing standards on suppliers is a step in the right direction day-to-day monitoring is limited if there is any by a company. (Ivey, 2016) Day-to-day monitoring should be increased not just by Apple but by all companies that use the same supplier. With Foxconn, Apple held most if not all the responsibility when the tragedies of Foxconn were brought to light. (Ivey, 2016) With multiple companies facilitating the same supply chain having a united employee or employees that are dedicated to the day-to-day monitoring of the supply chain can decrease events like the ones discussed above while sharing the costs throughout the companies using the supplier.

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Apple’s Global Responsibility 4 International businesses are already following standards placed and recommended to them, like corporate social responsibility, and adding dedicated employees to better regulate these standards can decrease regulation violations. References Ivey. (2016). Apple and Its Suppliers: Corporate Social Responsiblity. In Harvard Business Publishing Education . Harvard Business Publishing. P. Dunung, S. (2019). Global Business Management v1.0 (10th ed.). Management & Organization Textbooks. The 2020 World’s Most Valuable Brands . (n.d.). Forbes. https://www.forbes.com/the-worlds- most-valuable-brands/#2606afa2119c

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