Ethical Issues at Apple Managing in a Global Business Envir- Ethics, Corporate Social responsibility
Ethical Issues at Apple page 132.
The closing case describes the deplorable working conditions at the Apple factory in
China page 132 (look below). Wages are very low and working conditions are
poor.What do you think apple should do to ethically to correct this Problem?
Ethical Issues at Apple
In mid-2006, news reports surfaced suggesting there were systematic labor abuses at
a factory in China that makes the iPhone and iPod for Apple, Inc. According to the
reports, workers at Hongfujin Precision Industry were paid as little as $50 a month to
work 15-hour shifts making Apple products. There were also reports of forced
overtime and poor living conditions for the workers, many of them young women who
had migrated from the countryside to work at the plant and lived in company-owned
dormitories.
The 2006 articles were the work of two Chinese journalists, Wang You and Weng Bao,
employed by China Business News, a state-run newspaper. The target of the reports,
Hongfujin Precision Industry, was reportedly Chinas largest export manufacturer with
overseas sales totaling $14.5 billion. Hongfujin is owned by Foxconn, a large
Taiwanese conglomerate, whose customers (in addition to Apple) include Intel, Dell,
and Sony Corporation. The Hongfujin factory is a small city in its own right, with
clinics, recreational facilities, buses, and 13 restaurants that serve the 200,000
employees.
Upon hearing the news, Apple management responded quickly, pledging to audit the
operations to make sure Hongfujin was complying with Apples code on labor
standards for subcontractors. Managers at Hongfujin took a somewhat different tack;
they filed a defamation suit against the two journalists, suing them for $3.8 million in a
local court, which promptly froze the journalists personal assets pending a trial.
Clearly, the management of Hongfujin was trying to send a message to the journalist
communitycriticism would be costly. The suit sent a chill through the Chinese
journalist community because Chinese courts have shown a tendency to favor
powerful, locally based companies in legal proceedings.
Within six weeks, Apple had completed its audit. The companys report suggested
that although workers had not been forced to work overtime and were earning at least
the local minimum wage, many had worked more than the 60 hours a week allowed for
by Apple, and their housing was substandard. Under pressure from Apple,management at Hongfujin agreed to bring practices in line
with Apples code,
committing to building new housing for employees and limiting work to 60 hours a
week.
However, Hongfujin did not immediately withdraw the defamation suit. In an unusually
bold move in a country where censorship is still common, China Business News gave
its unconditional backing to Wang and Weng. The Shanghai-based news organization
issued a statement arguing that what the two journalists did was not a violation of
any rules, laws, or journalistic ethics. The Paris-based Reporters Without Borders
also took up the case of Wang and Weng, writing a letter to Apples then CEO, the late
Steve Jobs, stating, We believe that all Wang and Weng did was to report the facts
and we condemn Foxconns reaction. We therefore ask you to intercede on behalf of
these two journalists so that their assets are unfrozen and the lawsuit is dropped.
Once again, Apple moved quickly, pressuring Foxconn behind the scenes to drop the
suit. Foxconn agreed to do so and issued a face-saving statement saying the two
sides had agreed to end the dispute after apologizing to each other for the
disturbances brought to both of them by the lawsuit. The experience shed a harsh
light on labor conditions in China. At the same time, the response of the Chinese
media, and China Business News in particular, point toward the emergence of some
journalistic freedoms in a nation that has historically seen news organizations as a
mouthpiece for the state.
More recent news may indicate new ethical concerns at Apple’s production facilities in
China. In a 2014 story by BBC News, Apple is again the center of issues related to
workers’ hours, ID cards, housing arrangements, work meetings, and juvenile workers
at its Pegatron facilities on the outskirts of Shanghai. Apple disagreed strongly with
the portray of the Pegatron factory’s working conditions, and stated in the BBC News
article that “We are aware of no other company doing as much as Apple to ensure fair
and safe working conditions.”
Sources: R. Bilton, “Apple Failing to Protect Chinese Factory Workers,” BBC News,
December 18, 2014; E. Kurtenbach, The Foreign Factory Factor, Seattle Times,
August 31, 2006, pp. C1, C3; Elaine Kurtenbach, Apple Says Its Trying to Resolve
Dispute over Labor Conditions at Chinese iPod Factory, Associated Press Financial
Wire, August 30, 2006; Chinese iPod Supplier Pulls Suit, Associated Press Financial
Wire, September 3, 2006. Copyright (c) 2006 by Associated Press. Used with
permission Answer Preview
..APA 513 words
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