Vous êtes sur la page 1sur 6

Did Apple become more ethical since Steve Jobs Death?

Despite the fact that most multinationals are increasingly becoming aware of the
consequences that would befall them for soliciting cheap labor and creating sweatshop
conditions, the absence of universally defined standards defining the acceptable corporate
citizenship restricting them, they will continually push the bounds of what is corporately
unacceptable in their quest to reap maximum profits out of the least possible investment. Apple
Inc is an example of such companies that has attracted numerous critics for its disregard of
human rights and corporate social responsibility.
Apple Inc is a multinational tech company based in America with its headquarters in
California. The company specializes in developing software for computers, phones and tablets.
Apple was founded in 1976 by Steve jobs, Steve Wozniak, and Ronald Wayne. Since its
inception into the market, the company has significantly grown to becoming one of the market
leaders as evidenced by the huge revenues. Apple Inc is the worlds largest publicly traded
company with a value of over USD $700billion (Lucas et al. 2013). The company enjoys
significant levels of loyalty among its customers based on the Inter-brand Best Global Brands
report. Despite the huge revenues and high levels of loyalty, the company has faced challenges
related to ethical issues in the recent past. The issues range from poor working conditions to
harassment and intimidation. In 2006, a media report revealed how the companys employees
based in China worked for more than 60 hours earning $100 a month. In addition, several media
reports have indicated that the company engaged in child labor. Therefore, this paper seeks to
investigate whether Apple Inc increased the level of CSR after the death of Steve Jobs. The paper
provides evidence to support the researchers argument that the company has increased its CSR
levels after the death of Steve Jobs. Part one outlines the various ethical issues that implicating

APPLE INC.S CORPORATE SOCIAL RESPONSIBILITY

Apple Inc. citing specific instances. The subsequent section discusses some of the steps that
apple has undertaken to reinforce its image and corporate social responsibility and the last part of
the paper highlights some of the recommendations and the conclusion.
Ethical Issues Surrounding Apple Inc
According to Clarke and Boersma (2015), Apple Inc has attracted many critics due to the
issues surrounding its supply chain management. Although the company enjoyed a period of
economic progress after the return of Steve Jobs, evidence shows the serious consequences of
unresolved human rights issues in the Apples supply chain based in China. Despite the quality
and beauty associated with Apples products, Clarke and Boersma (2015) noted that the
employees producing the gadgets have poor working conditions and disregard for human
integrity is a normal thing. However, poor working conditions are common in major electronics
manufacturing companies based in Asia, including the supply chains for Dell, Nokia, and Sony.
As the market leader in the field of electronics, Apple has the responsibility of ensuring high
integrity and dignity of the supply chain.
1. N-hexane poisoning at Wintek
Early in 2009, one of the primary Apples primary suppliers, Wintek, that manufactured
touchscreens for the iPhone, used n-hexane in one of their plants, East China LCD so as to
accelerate the production process due to inflation in demand. Workers reportedly suffer from
nerve disorders due to the chemical. It is alleged that Wintek coerced the affected workers to
resign so that they could absolve the organization of any future liabilities. Wintek offered cash
settlements. For those workers who refused, the company forced them to work for long hours
disregarding their state of health.
2. Suicides at Foxconn

APPLE INC.S CORPORATE SOCIAL RESPONSIBILITY

According to Lucas et al. (2013), Foxconn Technology group, another primary Apples
chief suppliers, produces around 40% of the worlds total electronics. Additionally, the company
has employed approximately 1.2million people. Unfortunately, majority of these people work
under deplorable conditions. The workers live and work in a highly populated area commonly
referred to as the Foxconn City. In 2010, fourteen employees committed suicide in Foxconn
City within a period of eight months, four suicidal attempts failed and twenty attempts were
prevented by the security officials. These high rates prompted the Scholars and Students against
Corporate Misbehavior to conduct undercover investigations of the Foxconn organization.
The investigations revealed that the workers were exposed to harsh working conditions,
thus denying them dignity. The report also established that the ultimate principle was profit
maximization and the workers' welfare was not a concern (SACOM, 2010). Another report by
Chinese sociologists revealed that many immigrant workers had appealed to the authorities to rid
some policies that allowed Foxconn to exploit the vulnerable (SACOM, 2010). Apple was at the
center of the accusations as it is the largest customer of the Foxconn group. Foxconn group
produces high profile Apple gadgets such as the iPod music and iphone mobile products. The
suicidal attempts took place despite Apples 2010 supplier code of practice that stipulates, All
suppliers must uphold the human rights of workers and treat them with dignity and respect as
recognized by the international community. A group of 150 workers participated in mass protest
at Foxconn in 2012. These workers were protesting the harsh working conditions.
3. Tax Evasion
According to Verschoor (2013), Apple Inc avoids paying billions of money due to
strategies that many consider as illegal. Verschoor (2013) noted that Apples tax structure is
difficult if not impossible to understand. The company has stationed its offices in areas of low

APPLE INC.S CORPORATE SOCIAL RESPONSIBILITY

tax rates, a move that saves the company a lot of money. Infanti (2015) points out that since 2009
to 2012, Apples tax system has managed to evade taxes amounting to $44 billion. The iTax
structure is simpler as compared to the Double Irish, Dutch Sandwich structure used by other
multinational companies.
To ensure the company evades significant taxes, Apple Inc established wholly owned
subsidiaries in various parts of the world such as the Apple Operations International (AOI) and
Apple Operations Europe (AOE) in Ireland in 1980. Ireland tax rates are reported to be
significantly lower as compared to the tax rates in America. The Apple Operations International
is a shell company based in Ireland with no employees. The move to station the company in
Ireland was motivated by the definition of corporate tax residence of Ireland that makes the
country a better partner than the America.
According to Infanti (2015), the Irish definition of corporate tax residence is determined
by the central managements location. On the other hand, the US corporate tax residence is
determined by the location of incorporation. Apple Operations International does not fall into the
category of the US law nor the Irish law. Since the company is an intermediate holding company
for many groups of companies with operations overseas, it saves lots of money that would have
otherwise been taxed. For instance, for the period between 2009 and 2012, the company received
dividends of about USD $30billion but has not paid any corporate tax.
Corrective Actions Taken By Apple to Address the Ethical Issues
Although Apple Inc has attracted critics due to the neglect of ethical issues, the company
has undertaken significant steps in the recent past to address the critics. According to Frost and
Burnett (2015), the company has intensified audits since 2013. The audits aim at revealing noncompliance with the Supplier Code of Conduct. Where noncompliance is revealed, the company

APPLE INC.S CORPORATE SOCIAL RESPONSIBILITY

works in hand with the supplier to address the issue and drive change. The company has also
expanded education opportunities to its workers. This is a corporate responsibility issue that
Apple was in the past accused of neglecting (Frost and Burnett, 2015).
The company has also engaged in numerous campaigns aimed at cleaning its name
against tax avoidance. Also, the company has defended itself from Congress arguing that it has
not evaded tax and that it has fully complied with the laws of the land. However, no visible steps
have been taken to show that the company is willing the tax in which it is accused of evading
(Wallace et al. 2014).
Regarding the issue of poor working conditions for the supply companies, Apple has
continually emphasized the need for Foxconn to comply with the supplier code. According to
SACOM (2014), Foxconn has significantly improved the working conditions of its employees
although they do not meet the international standards. The Fair Labor Association shows that
Foxconn has reduced the number of working hours to 60hours. Apple in the recent past has taken
stringent measures against its suppliers who violate its code of conduct. For instance, Apple
dropped Pingzhou Electronics as one of her supplier for engaging in child labor.
Conclusion and Recommendation
It is agreeable that Apple Inc has attracted numerous critics due to failure by the
management to address the critical issues. However, I feel that the company has made significant
steps to promote good working conditions not only in its headquarters, but also in the supplier
companies. Stringent measures such as dropping the supplier are among the recent steps that the
company has taken to uphold dignity and integrity. Apple should as well consider increasing its
scope of Corporate Social Responsibility activities to create a better name for the company as
well as improve the customer loyalty.

APPLE INC.S CORPORATE SOCIAL RESPONSIBILITY

References
Clarke, T., & Boersma, M. (2015). The governance of global value chains: Unresolved human
rights, environmental and ethical dilemmas in the apple supply chain. Journal Of
Business Ethics, doi: 10.1007/s10551-015-2781-3.
Frost, S., & Burnett, M. (2007). Case study: the Apple iPod in China. Corporate
SocialResponsibility & Environmental Management, 14(2), 103-113. doi:10.1002/csr.146
In Infanti, A. C. (2015). Controversies in tax law: A matter of perspective.
Lucas, K. Kang, D. & Li, Z. l. (2013). Workplace Dignity in a Total Institution: Examining the
Experiences of Foxconn's Migrant Workforce. Journal Of Business Ethics, 114(1), 91106.
SACOM. (2010). Workers as machines: Military management in Foxconn. Retrieved from
http://sacom.hk/wp-content/uploads/ 2010/11/report-on-foxconn-workersasmachines_sacom.pdf
Verschoor, C. C. (2013). Maximizing Returns or Unethical Tax Avoidance?. Strategic Finance,
95(7), 13-16.
Wallace, D., In S Sabah Si, B., In Birch, N. J., In Laird, I. A., & In Rivas, J. (2014).A revolution in
the international rule of law: Essays in honor of Don Wallace, Jr.