UNETHICAL BUSINES cases

Lec 2
Sweatshops
Definition:
A shop employing workers at low wages, for
long hours, and under poor conditions.

Factory where workers do piecework for poor

pay and are prevented from forming unions;
common in the clothing industry
NIKE
Nike sweat shops located

South Korea
China
Pakistan
Taiwan
Indonesia
vietnam
Labor laws
In china and Vietnam employees are
prohibited from making independent trade
unions
This is a big plus for Nike because there are
no organized groups to strike or fight for
their rights
Ethical issues in Nike
By the 1990s, disturbing stories were
coming from many of the Nike factories
throughout the world. Some described
child labor,
wages were below the poverty level
forced overtime.
physical abuse from factory overseers,
exposure to dangerous chemicals and
poor air quality.
Workers protest
These stories drew the attention of human
rights groups, which began to bring media
attention to these stories, hoping that
pressure from the public could bring about
change.
Groups such as Education for Justice, Global
Exchange and Students Against Sweatshop
Labor led the effort against Nike.
 WORKERS PROTEST
Along with the campaigns of human right's
groups, Nike began to see protests from the
factory workers themselves. While Indonesia,
China, and Vietnam all have minimum wage laws
on the books, Nike had successfully appealed
these wages with the governments of these
countries year after year, allowing them to pay
wages well below the minimum rate.
In April 1997, more than 10,000 workers from
Nike's Indonesian factories went on strike to
protest low and unpaid wages,
while 1,300 workers in Vietnam went on strike
hoping for a raise of one cent per hour.
Cont
The next year, 3,000 Nike workers in China
protested dangerous working conditions
and low wages.
All of these protests took place in spite of
the fact that these sorts of worker strikes
are illegal in these countries.
VIDEO
NIKE makes improvements
As pressure from the public and human rights groups
began to mount, Nike made efforts to improve working
conditions for its contracted workers.
Dangerous chemical replaced
In 1998, dangerous petroleum-based chemicals used in
most factories were replaced by less harmful alternatives.
Increase in wages
In 1999, wages in the Indonesian factories were increased
to rates higher than minimum wage.
Independent monitoring system
The company also agreed to allow random factory
inspections from the Fair Labor Association, and to set up
independent monitoring with both US and international
organizations.
NEW STANDARADS
CODE OF CONDUCT
In 2002, Nike issued a company Code of Conduct to
all its factories, regulating the conditions and safety
requirements that work should be conducted by.
HEALTH AND LABOR STANDARDS
The company's 2004 Responsibility Report
established further health and labor standards, and
described increased monitoring plans. This 2004
report was considered a major victory for workers
and many human right's groups, because Nike
included a full list of its factories and their
addresses throughout the world.
Apple unethical practices
APPLE
IPHONE
COMPANY OVERVIEW
Apple Inc. is a multinational corporation
that designs, manufactures and markets
personal computers, software, electronics
and other creative devices.
APPLE
Although Apple has consistently won first
place as the Worlds Most Admired
Company, it has experienced several
ethical issues within recent years.
Apple Inc., in 2011, were accused of treating
their employees inhumanly and like machines.
To cut costs and increase profits, Apple hired
roughly 500,000 employees and started to
manufacture their products at two factories in
southern China. At the plants inShenzhen and
Chengdu, there were reported complaints about
the conditions within and around the working
areas.
FOXCON
Foxconn is the largest and most technically sophisticated
manufacturing operation for consumer electronic products.
In addition to Apple, its clients include, among others, Dell,
H.P, Sony, Intel, and Microsoft. The company is the single
largest exporter of products from China.
Foxconn is fanatic about secrecy and security. Entry to its
plants and other facilities is almost impossible without
specific permission of the plant management and
authorization from the foreign buyers. This secrecy was
well suited to the interest of Apple and other hi-tech foreign
companies who were concerned about protecting their
intellectual property and new innovative products from
their competitors. It also provided Foxconn with a ready
excuse for shielding all aspects of its operations.
FOXCON
Foxconn, one of the companies that builds
iPhones and iPads (and products for many
other electronics companies), has a factory in
Shenzhen that employs 430,000 people.
Foxconn has been under media spotlight since
the beginning of 2010 Concerns over poor
working and living conditions and for
employees were triggered by frequent and
growing numbers of suicide incidents of factory
workers.
 unethical issues
There were multiple cases of unethical behavior
from Apple and the terrible things they put the
employees through.
Anti suicide contract
Employees must sign an anti-suicide contract
pledging that they will not attempt to commit
suicide due to the large number of deaths in 2011.
Overtime: workers were forced to work overtime as
well as on weekends and are not able to use their
paid days off benefits because of low salaries
Apple makes employees work around 98 hours of
overtime, almost three times as much.
Unhealthy living conditions
Apple built living dormitories near the factories for employees to
live in. These buildings have hundreds of dorms, each of which is
not very spacious.
24 people are assigned to a room and are subject to be woken up
at anytime for work. and approximately 320 people share just
one bathroom.
Perhaps related to the inhumane hours and tight quarters, at
least 100 workers have been sickened by highly contagious
measles and rubella, the investigator said.

Situations like this make life absolutely miserable for employees

of the plants. Even if someone wanted to end their life, Apple
installed anti-suicide nets on the outside of all the dorm windows
so that the people would be caught and brought back to work.
LONG WORKING HOURS
Workers also can only take one day off every
two weeks.
Low wages
The normal wages for an employee are around
$17-$22 a day.
Investigation by China Labor Watch
(CLW)
In a bombshell investigation obtained by Radar, factory
workers rights non-profit China Labor Watch (CLW) arranged
for an undercover reporterto infiltrate Quanta Computers
Dafu Computer Changshu, where employees produce,
assemble and test the Apple Watch in back-breaking, tedious
work.
Loss of lives of workers
The covert investigator, who worked at the filthy factory for
two weeks, was shocked to learn that a male workers lifeless
body was found floating in a river located nearthe employee
dormitories in the early morning of April 2.
The very next day, a female worker was also discovered dead
in the river. Both deaths were rumored to be suicides.
Cont..

Exposure to dangerous chemicals

Employees are regularly exposed to dangerous chemicals
including n-heptane, which can cause dizziness and even
loss of consciousness. They are not warned about the
severe risks, and instead are simply told to wear a thin
mask.
Offensive taunts
Supervisors constantly push the workers to produce more
and more in anticipation of the Apple Watchs April 24
launch. If someone falls behind, they are subjected to
cruel taunts, including pig, one of the most offensive
Chinese insults.
 July 2009:A Foxconn employee fell from apartment
building after losing iPhone prototype. 18 more
workers try to commit suicide over next two years.

2010:137 workers at Suzhou facility, owned by

Apple suppliers Wintek, injured by poisonous
chemical, n-hexane, used to clean iPhone screens
because it dried faster.

May 2011:Four workers dead and 18 injured in

dust explosion at Foxconn factory in Chengdu, which
produces iPad parts.

December 2011:61 workers injured in gas

explosion at Riteng Computer Accessory Co factory
in Shanghai, which was testing aluminium iPad 2
back panels.
VIDEO
video
BRIBERY SCANDAL

Wal Mart
History of Wal-Mart

Wal-Mart began in 1950, when its creator, Sam Walton,

bought and opened a small store called "Walton's 5-
10" in Bentonville, Arkansas.
He opened a second store in Rogers, Arkansas later
that same year.
By 1967, the chain had 24 stores across the state of
Arkansas. 1968 marked the first stores to be placed
outside of Arkansas, one in Sikeston, Missouri and
Claremore, Oklahoma.
Over the next 10 years, Wal-Mart began rapidly
building new stores and supercenters. They also began
buying out other companies and venturing into new
territories, becoming the Wal-Mart we know today.
BRIBERY SCANDAL
One of the world's most successful and
respected companies, Walmart, has just
been caught in a massive bribery
scandal that extends to the highest
levels of the organization.

Just as bad, Walmart's senior

management appears to have long
known about the scandal and has
deliberately tried to cover it up.
Wall mart de maxico
Walmart de Mexico, a highly successful business for Walmart
(1/5th of Walmart's stores worldwide are in Mexico), systematically
bribed Mexican government officials for years.

The bribes, which may have totaled more than $24 million, were
paid to win permission to open new stories vastly more quickly
than would have been possible if the company followed to Mexican
laws.

The bribes were initially hidden from Walmart's global

headquarters in Bentonville, Arkansas, by disguising them as
normal legal bills (a.k.a., accounting fraud).
One of the key executives in charge of the bribery payments quit
the company in 2005 after being passed over for promotion. He
then detailed his behavior to some of Walmart's lawyers,
implicating many senior Walmart executives in the process.
Conti..
The CEO of Walmart de Mexico during
the period of the bribery scandal
,Edurado Castro-Wright, is said to
havepersonally approved of the bribes.Soon
thereafter, Castro-Wright was praised by
Walmart's senior team for his astonishing
success in Mexico and promoted to run the
company's US business. Castro-Wright is
currently the vice-chairman of Walmart.
Walmart's global headquarters
immediately launched an investigation
of the practice.But, despite finding much
evidence of at least suspicious behavior
(and, at worst, clear violations of Mexican
and US laws), Walmart effectively shut the
investigation down.
Why is this such a big
deal?
First, the alleged bribery in Walmart's fastest-
growing market violates the company's public
commitment to maintaining the highest ethical and
moral standards.
Second, many of the people allegedly involved in
the bribery scheme or cover-up are still with the
company: Eduardo Castro-Wright, Walmex CEO from
2002 to 2005, and reportedly the driving force
behind the rampant bribery, is now Walmart vice
chairman; thenCEO H. Lee Scott Jr. is still on
Walmart's board; and current CEO Michael Duke was
in charge of all foreign subsidiaries in 2005.
Third, although its own investigator informed
top Walmart officials that "there is
reasonable suspicion to believe that Mexican
and USA laws have been violated," the
company didn't inform U.S. law enforcement
untilThe Timesstarted poking around, five
years later.
WALL MART SWEAT SHOP VIDEO
Sweatshops and Wal-Mart
Sweatshops and Wal-Mart
Wal-Mart products
Produced in 48 different countries
Products mainly from Asian and Central
American factories
Produced using sweatshop labor
Sweatshops and Wal-Mart
Wal-Mart as an importer
10% of all Chinese imports are imported by
Wal-Mart
Own global procurement division

The Wal-Mart Squeeze

Endless quest to squeeze countries for lower
wages and cheaper goods
Lowering working standards where ever they
go
Sweatshops and Wal-Mart
Textiles and Wal-Mart
Produced by young women 17 to 25 years
old
Forced to work seven days a week
12 to 28 cents an hour
No benefits
Housed in crowded and dirty dormitories
24-hour-a-day surveillance
Sweatshops and Wal-Mart
Toys of Misery and Wal-Mart
Seventy-one percent of the toys sold in the
U.S. come from China
13- to 16-hour days molding, assembling,
and spray-painting toys
20-hour shifts in peak season (Christmas)
Seven days a week
Paid as low as 13 cents an hour
Live in Shacks or Dorms
No medical care or safety equipment
Poor Conditions
Sweatshops and Wal-Mart
Not just China
Bangladesh
El Salvador
Sweatshops and Wal-Mart
Some of the common abuses in the
sweatshops
Forced overtime
Locked bathrooms
Starvation wages
Pregnancy tests
Denial of access to health care
Workers fired and blacklisted
Occasional beatings
Withheld wages
Sweatshops and Wal-Mart
Not just over seas
US labor law violations
Violating child labor laws
Employees forced to work off the clock
Locking employees into stores overnight
Undocumented workers