Apple-Foxconn has been facing publicity for the wrong reasons for the past five years. These are two separate entities operating in different geographical areas. Apple is a multinational company based in the United States. The company is involved with designing, developing, and selling of personal computers, computer software and other consumer electronics. On the other hand, Foxconn is a Chinese multinational company that attains contracts to manufacture electronic products for different companies around the world (McCullough, 2012). The relationship between Apple and Foxconn is that Apple outsources the production activity of its products to Foxconn. The ethical issue encompassed in this case is the working environment that Foxconn was subjecting to its employees. The issues culminated in 2010 when 14 employees working for the company committed suicide as a result of the pressure emanating from their job. The employees were working for long hours and under poor environment, which was detrimental to their health (Seele, 2012). Use of child labor was also on the rise since children were providing a cheap source of labor that enabled the company to cut its costs.
Apple suffered from negative publicity as a result of this issue. There were several issues being discussed in the media regarding these occurrences. However, the company did not suffer serious repercussions as a result of this event. The enthusiasm that consumers had regarding its products, prevailed through this period. The stock price did not decline in light of the negative publicity. This is because Apple was involved in other good things at the time, which seemed to intrigue the stakeholders. New products were being launched hence people’s expectations were focused on the bright side. Tim Cook, the company’s CEO also visited Foxconn to assess the situation (Oremus, 2012). This was a strategic public relations move since it assured the public that the company was committed to ensuring that everything was working in the appropriate direction.
Foxconn suffered from negative publicity too. However, this did not appear to affect the company’s operations. None of the major companies outsourcing their services terminated their contract as a result of this incident. The major repercussion was the revision of the supplier contract details that compelled the company to act in ethical ways in future on various aspects.
Based on the standards that Apple upholds, it is unlikely that they would outsource their services to a company that they deem unethical. This is because among the key components of the company is the enhancement of corporate social responsibility. This has been a favorable working formula for the company since it ensures that every stakeholder’s needs are met. Among the issues that Apple would have overlooked while working with Foxconn is the fact it is the largest electronics manufacturer all over the world. As a result, it is expected that a company of such magnitude would maintain the desired ethical practices. This is due to the scrutiny that it’s likely to face from the media and other interested critics (McCullough, 2012).
In light of these issues, Apple has put forward measures to prevent this from surfacing again. The company was compelled to put various conditions on the contracts that they make with any supplier. These conditions are meant to deter the supplier from acting against the ethics of the company. Any supplier that is not willing to adhere to these conditions will have their contracts terminated.
McCullough, L. M. (2012). The Foxconn-Apple Debacle: A Critique and Case Study of Media Representation of Labor Abuse. New York: Whitman College.
Oremus, W. (2012). How Apple Turned the FoxconnScandal Into a Way To Beat Its Competitors. Retrieved December 1, 2015, from http://www.slate.com/articles/technology/technology/2012/03/apple_foxconn_how_the_ world_s_most_valuable_company_turned_its_labor_crisis_into_a_way_to_beat_its_com petitors_.html
Seele, P. (2012). Apple-Foxconn Case. Triple Profitability Bottom Line, 4(2), 17.
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