The multinational organizations like Apple have the utmost responsibility to follow labor laws and standards when they operate in countries outside their home country. The multinational organizations must operate in a manner that it can develop a balance in their economic interests, environmental and labor laws. Most of these companies, operate in low-cost labor countries as they want to maintain their production costs, which results in the exploitation of labor such as hazardous working conditions and employing child labor (Goldberg, p.1).
What possible ethical dilemmas are on the horizon? What makes you think that?
Outsourcing business operations to developing countries is a highly profitable business avenue for multinationals like Samsung, Apple, Microsoft, Dell, etc. as it helps in cost cutting. Apart from cost-cutting, the flexibility and speed that Asian workforce offers help in remarkable turnaround time of new products, but there is a major human cost involved here as most of the developing nations have non-existent labor laws (Jefferies, p.2). In the articles studied, the Chinese suppliers often tend to hire people and then fire them as per their production requirements with no permanent contracts meeting labor standards.
The working conditions in most of these factories do not meet the labor laws and the environment provided to the employees is extremely difficult to work in. The employees are forced to work overtime (Jefferies, p.2). The employees are forced to work for seven days a week without any holiday and the halls they tend to work in do not have proper ventilation and are overly crowded. In order to develop products, many employees are forced to stand in assembly lines for hours, until their feet swell and they are unable to walk properly (Jefferies, p.2).
Another major ethical dilemma in factories located in China working in manufacturing of Apple products is that most suppliers are employing child labor in order to develop Apple products (Enderle, p.1). Most teenagers are employed in factories under the semblance that they are working as an internee. Instead, they are hired on a temporary basis so that suppliers can meet their production quotas. It is important to note here, that these under-age workers have developed some of the most popular and complex Apple’s products. During the process, they encountered hazardous chemicals and materials that are certainly not disposed of properly by the suppliers that in return cause environmental degradation and exposure to the harmful material (Enderle, p.1).
Has the company done anything to address these issues?
The major reason, why Apple has been mostly unaware of this horrific situation prevailing in the factories in China is because, the suppliers have kept the circumstances under great secrecy so that there are able to meet their production quotas. This has been possible because the suppliers provided false information and records to all the external auditors sent by Apple Inc. The suppliers have been violating the international standards for quite a time and were unable to provide suitable and healthy working conditions to their employees. Some of the steps that have been taken by Apple Inc. is that they are sending in more external auditors now that are experts and vigilant in their audit practices so that suppliers are unable to provide false records. The Apple Inc. has also sent many teams that provide training sessions to the employees in China. Apart from this, the employees are encouraged to educate themselves so that they are aware of their rights and are not easily exploited. The company has now started the working hours and sessions so that employees are not forced to work overtimes with full load and work non-stop for seven days a week without any holiday (Hawthorne, p.1).
This seems like a lot, but there is not much that is done to improve the working conditions by the company as these multinationals believe that if an investment is done to improve the working conditions of the employees in developing countries with providing them with less hazardous and improved working environment, this will in return improve the operational costs and will increase the overall product cost (Worstall, p.2).
What do YOU think the company should do to address the ethical Dilemma(s)?
I believe that apart from employee training and education, it is important that an agreement must be made with suppliers to ensure that they follow the labor and environmental laws in order to meet ethical and social responsibilities. The company must predict and help the suppliers to manage the surge in production so they are well-prepared beforehand to meet their workforce requirements rather than hiring under-age children. My second suggestion is that financial incentives must be provided to suppliers who meet environmental and ethical targets (Jefferies, p.2).
Enderle R. Apple and the Ethical/Business Problems of Child Labor and Other Unsavory Practices, IT Business Edge, (2010), p.1, http://www.itbusinessedge.com/cm/blogs/enderle/apple-and-the-ethicalbusiness-problems-of-child-labor-and-other-unsavory-practices/?cs=39724
Goldberg E. Clothing Labels List Sweatshop Atrocities So Buyers Will Shop More Consciously, The Huffington Post, (2015), p.1. http://www.huffingtonpost.com/2015/03/29/cambodia-sweatshop-condit_n_6956244.html
Hawthorne F. Apple's Appalling Ethics, The Huffington Post, (2012), p.1. http://www.huffingtonpost.com/fran-hawthorne/apples-appalling-ethics_b_1651264.html
Jefferies D. Is Apple cleaning up its act on labour rights? The Guardian (2014), p.2, http://www.theguardian.com/sustainable-business/apple-act-on-labour-right
Worstall T. Has Apple Become More Ethical Since Steve Jobs' Death A Year Ago? Forbes, (2012), p.2, http://www.forbes.com/sites/timworstall/2012/10/05/has-apple-become-more-ethical-since-steve-jobs-death-a-year-ago/