Overview of Apple-Foxconn
Apple and Foxconn are two separate entities that have come together to operate for mutual benefits. Apple is a multinational corporation based in America. The company’s scope of operation is designing, developing, and selling computer software, personal computers and consumer electronics. Apple has been on the fore front of its operation trying to enhance corporate social responsibility through its operational activities. This aspect has been complimented by trying to spearhead aspects of a green economy in the organization’s operations. Green economy is an aspect that tries to improve human well-being, social equity and taking care of the environment at the same time. Foxconn on the other hand, is Chinese multinational company that receives contracts to manufacture electronic products for other companies (Christopher, 2012).
Apple and Foxconn signed an agreement, and now Foxconn is responsible for the manufacturing activities of Apple. Apple-Foxconn has been operating in the midlist of numerous controversies. The controversies have resulted due to the differences in corporate social responsibility aspects between the two companies. Apple had several reasons for outsourcing its production activities. Among them was the desire for the company to increase its profits. Shifting its production activities to china would have made this possible. This is because the act would minimize costs since the materials in the area and labor are cheap. The minimum wages in USA is $1,160 per month. This is way too high compared to the minimum wage in China that stands at $240 per month (Lee, 2012).Gaining competitive advantage was also a significant contributor to the outsourcing process. Doing things that the competitors are not doing usually comes with multiple gains. There was also the need for meeting high demand for the company’s products. This would only be satisfied by outsourcing the production activity and letting the company concentrate on other issues.
In recent times, the Apple-Foxconn relationship has not been that favorable. In the midst of many controversies that were facing Foxconn, Apple hired FLA to conduct and audit in 2012 in the organization. The entire audit was aimed at investigating the working conditions in the organization. Since then, Foxconn is believed to have reduced the number of employees working on Apple production plants. Many believe that this act is aimed at slowing down apple’s activities.
Sustainability and Ethics by Apple-Foxconn
Apple-Foxconn defines ethics and sustainability in various ways. Several approaches are used to make sure that these aspects are enhanced. There is an enhancement of integrity in several operational activities. Integrity comes during the hiring and placement process of employees. Enhancing favorable working conditions has been termed as of paramount importance. There are also some aspects of integrity based on the products being manufactured. Apple-Foxconn enhances CO2 reduction for every dollar spent. Toxic substance removal has also taken a higher notch in the operations (McCullough, 2012. Several mechanisms have been devised to make this happen.
Another approach used by Apple-Foxconn is empathy. This is the creation of emotional bonding between the stakeholders and the organization. Such an approach enables the stakeholders to allow companies endure difficult periods. Apple-Foxconn has been faced with several lawsuits during its time of operation. Such an approach has been effective in maintaining calm on the side of the stakeholders. Among aspects that have been used in enhancing empathy are uses of environmentally conscious materials. Most consumers are nowadays more concerned with environmental aspects and hence develop positive relations with organizations that desire to offer such products. Apple-Foxconn has also tried to achieve this aspect by enhancing responsible manufacturing. Responsible manufacturing is a sign of social responsibility. Consumers will always remain loyal where their interests seem to be safeguarded. Use of zeal is the most-embedded virtue in Apple-Foxconn’s ethics and sustainability quest. This is through innovation which brings about consumer excitement. There is the production of smaller products with smaller packaging. Production of smaller products comes along with minimal emission of carbon products. This is because as the size reduces the toxic levels also reduce. It is a splendid example of enhancing green economy. There is the ability of creating value and taking care of the environment at the same time.
Amy (2012) says that Despite Apple-Foxconn trying to claim of its ability of enhancing sustainability and ethics, it has come under a lot of criticism. In a report released in 2011, it was asserted that Apple-Foxconn was responsible with the emission of 23.1 million metric tons in terms of green house gases. This contradicts what the company has put forward in its sustainability endeavours.
Ecological Sustainability and Ethical Challenges
Through its operation, Apple-Foxconn has been faced by numerous challenges in quest of enhancing ethics and ecological sustainability (Sadeghi, 2012). Banerjee in his work observes that the modern corporation has removed restrictions around corporate activities. This now means that there is no official requirement in serving the public interest but only in the economic realm (Banerjee, 2007). On ethics, the main challenge that Apple-Foxconn has faced is on labor. It has been accused on several occasions that the working conditions that have been established are poor. Employees are said to be working in buildings that are poorly ventilated and stocked with poor working devices. The employees are subjected to immense pressure during their working process. This pressure emanates from the fact there are deadlines to be met and orders that have been demanded as extremely huge. This has prompted Apple-Foxconn to increase the working hours for their employees. The aspect has been in contradiction with what the law expects from the firm. The general working hours in Chinese economy is 40 hours every week (Harris, 2010). Working overtime has not come with any benefits to employees. There is no increase in wages provided so as to help cater for the additional working hours. To the contrary, the wages have continued to diminish with time. Wages offered at Foxconn are very low compared to what other employees are earning in United States. The minimal wage in the country is low hence making them legal but this sounds rather unethical. The current wage base at the company is $350 per month (Lee, 2012). It quite above the minimum wage but is not fair to them since they are executing similar tasks like the employees working in United States. It is imprudent for any organization to take advantage of developing countries based on the sense that there is surplus supply of labor.
Pressure has developed on the side of employees due to working on such conditions. Several suicide cases have been reported from employees operating in these plants. Apple-Foxconn is also believed to be utilizing child labor in its production process. Child labor becomes favorable since it is cheap to any organization (Bales, 2004). This act has been criticized by my many NGO’s and has resulted to several law suits. Foxconn has been involved in such activities due to the terms offered by Apple Company. The company is believed to be offering low pricing to Foxconn despite its profit margin. Apple is also believed to be putting on the quantity of production based on its product’s demand. Unfavorable pricing triggers Foxconn to employ child labor and reduce wages significantly so as to make profits. Making employees work for longer hours is believed to be an effort of trying to meet the demand request from apple.
Such aspects were incorporated in the works of Banerjee. Banerjee (2007) asserted that most companies stop the aspect of empowering stakeholders when there is a divergence in profit interest and that of the local community. This is an attribute that is more vivid in the Apple-Foxconn venture.
In ecological sustainability, environmental issues have taken the fore front. Apple-Foxconn is being accused of using the green wash aspect in its operations. Green washing is that aspect where an organization deceives the relevant stakeholders on its green marketing aspects. Among these issues is that the entity boosts of reducing carbon emission to exceptional levels. This has been done by the provision of its carbon foot prints that have seemed to be deceiving (Sadeghi, 2012). In 2011, Apple-Foxconn is believed to have emitted more than 23 million metric tanks of greenhouse gases. This has been attributed by the usage of several raw materials that are not environmentally friendly. It is believed that Greenpeace has been involved with campaigns against Apple-Foxconn. The aspect has resulted from various environmental issues including toxins in iPhone hardware, non-recyclable components and end of life take0back plan. Green peace has been fighting against the inclusion of PVC and BFRs in the company’s products. It asserts that the whole process diminishes the aspect of Green Economy. Other element obtained from the company’s products is Rare Earth. The element encompasses Scandium and yttrium which have negative impacts on the environment.
Apple-Foxconn has also been accused of taking advantage of the laws put forward in china. Chinese laws are believed to be less protected hence not that strict. Apple-Foxconn has taken this advantage in breaking labor laws and carbon emission levels (McCullough, 2012).
Working with Stakeholders to Solve the Problems
Apple-Foxconn has both primary and secondary stakeholders. They include shareholders, employees, customers, government, NGOs, suppliers and media. Relationship between these stakeholders can be viewed as favorable. This is because they have agreed to come together and try to solve the problems facing the organization. Understanding the aspects of stakeholder engagement is very important since it simplifies the process of decision making (Hohnen, 2007). Apple-Foxconn operates a Business-to-Consumer (B2C) venture hence not making it directly accountable to the actions of suppliers based on the legal perspective. However, if anything went wrong, the company would be the ones to face problems emanating from lack of corporate social responsibility. To this effect, the company has made its suppliers sign code of conduct contracts. The contracts enhance that the raw materials provided by the suppliers are of high quality and enhance the aspect of the green economy (McCullough, 2012). This means that they should aim at preserving the environment at all possible costs by enhancing minimal emissions possible. Attaining this threshold would deter other individuals from dubbing the organization as a green wash. What is being claimed in its sustainability and ethics stipulations would come to be true.
There has been more involvement of NGOs in the corporate operations. Their involvement has come along with the association of the Fair Labor Association. The ultimate aim has been to protect the worker’s rights. Among the key issues that have been on great scrutiny is overtime working and low wages. Fighting of child labor has also been spearheaded in the process. Employees have been empowered through investigations and interviews. Areas that need improvement have been assessed, and steps towards the right direction have been involved. Safeguarding the well being and employee’s health has also been enhanced through NGO involved. There were issues before on employees that committed and the ones injured poisonous screen cleaners (Qiang, 2012).
Shareholders on the other hand, have taken the initiative to enhance social responsibility on the part of employees. They have come to prevent further suicide with immediate actions. Among the actions has been the installation of suicide nets in order to prevent deaths arise from jumping from the roof tops. The shareholders have also agreed to increase wages by 20%. Working conditions seem to have been improved too since employees can now leave production sites now and then. Employees have been subjected to sign contacts of not committing suicide. If anyone broke the contracts, there would be no compensation to their families (Hill & Jones, 2013).
Despite the working in partnership of the stakeholders, there have been numerous challenges along the way. Among them are differences as to the policies to implement to help curb the problem being encountered. Another disagreement is on the appropriate time of establishing these policies.
An Example of Marketing where Ethic and Sustainability Feature
There are several areas where the marketing aspects of Apple-Foxconn feature ethics and sustainability. Among the area is the packaging and designing aspect of the products. Designing and packaging have always been viewed as a great approach of enhancing market success of a product. It helps in creating differentiation which in return brings about consumer loyalty. Apple-Foxconn has used this approach by developing smaller products compared to the ones that they use to manufacture before. The smaller packaging and product design ensure that minimal material has been used during the manufacturing process. As the quantity of the material is reduced, the amount of carbon emissions to the environment will reduce significantly with the usage of these products (Sukhdev, 2011). Ecological sustainability will be enhanced, as a result. Employees will also not get exposed to excessive toxic substances hence enhancing their health conditions. This is an ethical act that might bring favorable operations. Some advantages would include increased market share and sales, strong brand positioning and good corporate image among others (Wallrich, 2010).
Describing Apple-Foxconn as Green, Responsible and Ethical
Apple-Foxconn is trying to enhance the aspect of a green economy, but has a long way to go. There are numerous loopholes that deter from attaining this actualization. For this reason, it cannot be fully considered being green. The organization still emits a lot of greenhouse gases in the atmosphere. Some of the raw materials that the organization uses are not environmental friendly. This is detrimental for ecological sustainability. It beats the company’s ideology of enhancing a green economy.
However, the organization has shown some improvements on being responsible and ethical. The aspect of responsibility is created whereby the company requires its supplier sign contracts of good conduct. This means that suppliers will have to deliver high quality products at all times. Such products will enhance the safety of the consumers at all times. They will also reduce undesirable products hence promoting the health of the users.
On ethics, Apple-Foxconn is trying to improve the working conditions of its employees. There has been a postulated increase of over 20% for all employees. The pressure that used to be subjected before is on the verge of being eradicated. This has been enabled by working in partnership of relevant stakeholders.
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