Apple is an American company famous for making iPhones and iPads. Thecompany has seen an upward trend since the late 1990’s. Even afterthe death of its brilliant CEO, Steve Jobs, the company has keptgrowing ever since. Most of its success is attributed to itsinnovative products and the loyalty of the customers. Apple fanaticsare willing to sell anything in order to afford a new product modelfrom the same company. In 2011, Apple decided to outsource thefunction of manufacturing its products to a Chinese manufacturercalled Foxconn (Guthrie, 6). The firm is responsible for making theincredible iPhone. When Apple made the decision, there was world-widecriticism. Some Americans cited lack of patriotism because thecompany had shipped jobs from America to China. All that Apple doesis to ship finished products from China to various destinationsdepending on demand. In 2012, there was an ethical crisis regardingApple’s manufacturer of iPhones. Foxconn was accused of subjectingits workers to deplorable working conditions and meager wages.
Foxconn is a close ally of Apple. Any negative publicity that itattracts will cause a similar fate on Apple. As expected, the ethicalcrisis had some repercussions on Apple’s publicity. According tothe media reports, Apple encountered criticism because of thepractices of the supplier, as media outlets discussed the issue indetail (Guthrie 7). Newsrooms called upon Apple officials to explainthe matter. The company was at pains to explain that it was not awareof the crisis. The Social media community did not give Apple anypiece of mind. There were virtually numerous attacks on the brandwith many people suggesting a boycott of Apple’s products. Althoughthe crisis did not lead to a significant fall in the volume of sales,it placed the company in the limelight for all the wrong reasons.
In an attempt to save its already tainted image, Apple joined theFair Labor Association (Guthrie 8). The idea behind Apple joining theAssociation was to assure its clients that it cared about itsworkers, whether locally or overseas working for its suppliers. Afterjoining the association, the first repercussion on Foxconn was aseries of private investigation by FLA. As a rule of joining theAssociation, Apple signed an agreement to abide by the FLA’sworkplace code of conduct throughout its supply chain. Since Foxconnwas a supplier to Apple, it had no option but to agree to theinvestigation. At the end, FLA released a report detailing itsfindings in Foxconn facilities at Shenzhen and Chengdu, China(Guthrie 7). The report also drew recommendations to ensure thesupplier adhered to the code of conduct.
Apple might have been aware of the poor working conditions at Foxconnbefore awarding it the contract. However, they decided to overlookthis issue due to the low production cost they experienced atFoxconn. Apple was not willing to jeopardize its chances of getting ahigher profit margin over the poor working conditions of Chineseworkers who were not directly related to Apple.
Apple joined the Fair Labor Association to ensure nothing of thesorts happened again. Apple forced the overseas supplier to abide bythe code of conduct laid down by FLA. However, if Apple had doneprior research before contracting the manufacturer, maybe the companywould not have come to this type of crisis. Fortunately, the crisiswas solved and Apple resumed its operations.
Guthrie Doug. Building Sustainable and Ethical Supply Chains.Forbes, Web, Mar 9, 2012. Accessed,<http://www.forbes.com/sites/dougguthrie/2012/03/09/building-sustainable-and-ethical-supply-chains>