When considering the ever-changing and highly competitive global landscape of business today, firms must stay at the cutting edge of their respective fields in order to sustain profitability in the long-term. With the current exponential growth and advancement of technology and the computerization of business and learning, consumers and investors have become much more connected to the businesses they patronize (Kurzweil, 2001). Accordingly, companies are faced with the continuous task of finding new ways to understand and subsequently accommodate the needs of those customers and shareholders, while simultaneously securing lucrative business models and job environments. Due to the variety in the effects of the globalized market realized by different nations and regions, some areas of the world have targeted specific business sectors and have subsequently gained a competitive advantage . The manufacturing industry provides a superb example of an industry that has grown, been geographically compartmentalized, and transformed to meet the ever-changing needs of customers around the world. This cultural and economic transformation has affected many global firms that rely heavily on relationships with suppliers and manufacturers. One such notable firm is the Apple Corporation. While this firm is located in the United States, where its technology product lines are designed, Chinese firms often produce such products overseas. The necessity of this relationship in maintaining Apple’s profitability opens many doors for unethical behavior and exploitation. For, while Apple’s products are sold in almost every developed nation around the world for hefty prices, traditional wisdom about Chinese production indicates that there is an opportunity for this larger firm to disregard nobility and honor in the realm of Corporate Social Responsibility (CSR). This cross-cultural clash represents several potential problems for Apple and mandates that this firm be extremely diligent and tactical in selecting their suppliers.
The global segmentation of industries has created several “producer” cultures around the world. One of the most prominent regions were this type of cultural configuration has thrived is Asia. However, as production and exports have soared in recent years, there has been quite a bit of concern raised over the treatment of laborers in these cultural epicenters. In particular, China has suffered through quite a bit of negative press concerning this culture’s utter disregard for generally accepted CSR practices. Though it is important to acknowledge this powerful nation’s cultural history in order to truly appreciate the ethical confines of their productive system.
Prior to the late 1970’s, the vast majority of Chinese companies were owned and operated by the state. As one might assume, operational and productive protocols were streamlined and there was little debate regarding human rights or social responsibility . During this period of predominantly state-owned business, private organizations had little chance of competing and contributed almost nothing to China’s overall economy. It was only after the government allowed for the privatization of many firms and industries in the 1980’s, that this sector began to contribute to China’s overall GDP . During this massive transition, the Chinese government was intensely focused on ensuring profitability to its newly privatized businesses and creating a reliable tax structure so that the government would be sure to profit from these firms as well . However, several critical aspects of business and production (most notably safety regulations and Corporate Social Responsibility) escaped the governmental eye. Thus, being that poverty was a widespread concern in China during this period and there were millions of people desperate for work, private firms realized a large opportunity for exploitation and quick profits. This disreputable realization gave birth to sweatshop production in China . During this regrettable period of business operations, women and children were often displaced from their homes and forced to work atrociously long shifts in inhumane conditions for miniscule amounts of pay . The foundation of this situation progressively evolved as China opened the doors to foreign ownership and greatly increased their economic profitability through their exploitive production techniques.
From the perspective of Apple, there was not much choice in where to manufacture their products. For many years, China has been a world leader in this field and the United States remains uncompetitive . In fact, there are very few firms in the United States that would even be capable of producing Apple’s product in their desired quantities. And with the unionization of labor in the United States, this option (if it did in fact exist) would surely be very unprofitable as compared to overseas production. Therefore, Apple was forced to enter into a critical partnership with a member of this productive, yet supposedly oppressive, culture. With the great influence of the media in portraying companies and their products, and the great amount of harmful media attention being directed at Chinese manufacturing firms, this alliance was an unquestionably tricky endeavor. The ethical and economic consequences of a mistake in this arena would surely be monumental. However, to Apple’s great relief, there seemed to be certain options that appeared to be much safer than others. For, the Chinese government, feeling the heat from the global press, recently passed legislation that required its domestic firms to adhere to several CSR standards in production . And while it remains unclear if these laws are being adequately enforced, there are several Chinese firms that have reportedly taken active roles in adapting these regulations in an attempt to secure a reliable and respectable global reputation. As one might assume, many of these firms have already established their own global presence and hope to continue in their journeys to industrial leadership positions. Such firms were the ideal candidates in Apple’s partnership selection process. And noting the prestige and dominance of this massive firm over the years, there were certainly a long line of esteemed candidates.
After narrowing this long list of aspirants, Apple conducted thorough inspections of the facilities of their prospective companies to ensure that no abusive or exploitive practices continued to occur. Upon the culmination of these examinations and the collective review of their results, Apple chose a select group of firms to manufacture the bulk of their products. One of the primary manufacturers that is now under contract with Apple is the Foxxcon Corporation . This is a Chinese firm that Apple has forged a relationship with namely due to its capacity to produce and manufacture several of their popular product lines (most notably the iPhone and the iPad) . In addition to Foxxcon, Apple has also formed an ongoing partnership with another esteemed Asian company, the Samsung Corporation. While this well-known organization does not have as large a share in the manufacturing of completed Apple products, Samsung has been entrusted with the production of one of the most critical pieces of all Apple products: the microprocessor .
Ultimately, while Apple has experienced great levels of success as a result of its strategic approach to this cultural and ethical issue. The fortitude of its relationships and the practices of its partners continue to require diligent monitoring and care in order to ensure that this ongoing concern is accommodated. The cultural differences between the nations in which these different partnering firms are located are certainly massive and could cause problems in the maintenance of control and trustworthiness in this strategic alliance. Though considering the significant global reach of all parties concerned, it does not seem like either side would do anything to jeopardize their reputation or their potential for increasing profitability. Therefore, it seems like there is substantial motivation for these firms to engage in a great degree of self-policing in order to maintain their honorable statuses. Thus, Apple should feel assured in these partnerships and not feel chronically worried about their activities abroad. This sense of confidence should allow Apple to focus on innovating and designing new products and subsequently maintaining their leadership position in the world’s technology industry. Though while…
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