SJCET

ST. Joseph’s College of Engineering and Technology, Palai

Academic Year: 2020-2022

Department: MBA

ASSIGNMENT: 2

Case Study: Apple Suppliers & Labor Practices

Subject: Ethics, Governance and Corporate Responsibility

Submitted To: Submitted By:

Dr. Joseph Purayidathil Sindhya Benny

Assistant Professor Adm. No. 20/MBA/034
Dept. of Management Studies MBA [Batch 2020-2022]
SJBS, Palai, Kottayam SJBS, Palai, Kottayam

Date of Submission: 01-01-2021

Apple Suppliers & Labor Practices

Functional Area: Corporate Social Responsibility

Corporate Social Responsibility is the main topic

everywhere. If any firm wants to create the right image in the society, they should contribute
some of their profit and earnings to CSR. Many companies are donating some percentage of
their revenue for the welfare of society and the environment Apple is a world-renowned
company and is famous for their aristocrat design and quality. Apple is committed to the
highest standards of social and environmental responsibility and ethical conduct. Apple’s
suppliers are required to provide safe working conditions, treat workers with dignity and
respect, act fairly and ethically, and use environmentally responsible practices wherever they
make products or perform services for Apple. Although, is good in rest of segments but it
doesn’t mean that Apple doesn’t mean to be careless especially for the CSR issues because
customers are getting awareness about the importance of CSR strategy. In recent days,
customers don’t prefer those organizations which are not giving importance of the CSR.

The case named “Apple Suppliers & Labor Practices”

states that Apple has failed to perform the responsibility towards the suppliers. During the
2014 holiday season, 74.5 million iPhones were sold. Demand like this meant that Apple was
in line to make over $52 billion in profits in 2015, the largest annual profit ever generated
from a company’s operations. Despite its consistent financial performance year over year,
Apple’s robust profit margin hides a more complicated set of business ethics. Similar to many
products sold in the U.S., Apple does not manufacture most its goods domestically. Most of
the component sourcing and factory production is done overseas in conditions that critics
have argued are dangerous to workers and harmful to the environment.

Tin is a major component in Apple’s products and much

of it is sourced in Indonesia. Although there are mines that source tin ethically, there are also
many that do not. A study was conducted on this basis it reveals that many workers are
children and are working in unsafe conditions, digging tin out by hand in mines prone to
landslides that could bury workers alive. About 70% of the tin used in electronic devices such
as smartphones and tablets come from these more dangerous, small-scale mines. An
investigation by the BBC revealed how perilous these working conditions can be. In
interviews with miners, a 12-year-old working at the bottom of a 70-foot cliff of sand said: “I
worry about landslides. The earth slipping from up there to the bottom. It could happen.”
Apple defends its practices by saying it only has so much control over monitoring and
regulating its component sources. The company justifies its sourcing practices by saying that
it is a complex process, with tens of thousands of miners selling tin, many of them through
middle-men.

This case can be analyzed in two ways firstly, Apple is not

responsible for the lapses made down on the ground because its transactions are made
firsthand by the middlemen. Suppliers of tin are delivered to apple through the middlemen
and they are not aware of the ways or process how these are being produced. In order to
protect the business ethics Apple should continue to work with the suppliers in an effort to
change practices because they are probably their largest buyer so their opinion and input
would actually lead to change, whereas leaving it be would let the problem continue and have
no outside objection.

On the other hand, if Apple knew from the start that the
digging of these tin minerals was done mostly by the children in Indonesia which considered
a child labor, then Apple is already responsible for the ethical lapses made by the its
suppliers. In such situation Apple should not continue with such suppliers since the company
has a moral responsibility towards the society. If the suppliers are engaged in unethical
practices Apple should refuse to work with them thereby impacting their business in a big
way. Once that happens the suppliers will reduce their profits and adopt more ethical
practices due to the fear of losing a large chunk of business which comes from Apple.
Certainly, consumers should take into account the ethics adopted by companies. Just as
companies are responsible for fulfilling their social responsibilities individual should
contribute to the society by refusing to buy goods from such companies. Once that happens
the companies will automatically start adopting ethical practices which will in turn benefit the
consumers and the society as a whole. Moreover, other companies will take a lesson and will
move towards ethical practices.

We should feel obligated to do something against child labor.

The first important thing, an obligation, is to stop importing of tin until the problem would be
solved, since child: labor is legal prohibited across the world. I t is not only a legal issue, but
also a social and moral issue that interferes with the ability of children to attend regular
school an it will be dangerous mentally and socially. It is against global sustainable
development goals that requires for adoption sustainable and social responsible polices.

Promoting human rights through the education and training of the

employees and promote human right compliance. Having clear policies against child labor,
and complies with the international human rights laws and make sure to maintain strong
governance structures and adherence to law. Code of ethics and business conduct can outline
all ethical standards and procedures of company. Helping the business to be conducted with
honesty, integrity and respect for all employees, customers and community. Asking company
to be transparent to the public would be an important responsibility of CSR. Establishment
and support of initiatives in education of child labor and preparing them for future society
would be one of the philanthropic acts, which can support supplier’s relationships and
increases productivity. Furthermore, this practice can build a good reputation for the
company, retain a motivated workforce and improve current corporal social reputation lost.
Most organizations must practice genuine corporate social responsibility to be successful in
the modern marketplace.