OB presentation

Apple goes global

 Shifted its manufacturing overseas

 Almost 70 million iPhones, 30 million iPads and 59 million other Apple products
are manufactured in Asia and Europe
 20,000 direct jobs and 7,00,000 other jobs lost overseas
 U.S wages would add only $65 to each iPhone’s expense, where the profit
mounts to hundred of dollars per phone
 Apple’s leaders believe that the flexibility, diligence and industrial skills
available to them in China’s market is far more superior as compared to the
U.S labour force
 The overseas advantage portrays an image that the U.S workforce needs to
be better led, better trained, more effectively managed and motivated
 Apple’s switch from 100% American-made items to just 10% represents the
company going global and serves as the best example of global ingenuity.
Q1. What are the pros and cons for
local and overseas labour forces of
apple’s going global? What are the
potential political implications for
country relationships?
 Pros:
 Labour cost is pretty cheap in the developing countries as compared to
the U.S
 Company earned more profit per device
 In the process also created a better brand value there which led to more
revenues
 Labour in the developing countries are quite flexible and adaptable to
the changes
 The labour market is quite efficient and motivated towards mastering new
skills
 The overseas workforce got new opportunities
 This boosted their economy and led to a reduction in their unemployment
rates
 Cons:
 Unemployment rates increased in the U.S economy
 This led to an increase in pressure to train more workforces and create
more work opportunities
 The workforce in the developing countries are more risk prone and
susceptible to the changing MNC’s needs

 Potential relationship between the U.S and the developing countries may
get spoiled in the future.
 Trade war between US and China
 Other developing countries caught in the crossfire
 Deteriorating trade relations due to increase in trade tariffs
Q2. Do you think Apple is justified in
drawing the observations and conclusions
expressed in this case? Why or why not? Do
you think it is good or harmful to the
company that its executives have voiced
these opinions?
“The speed and flexibility is breathtaking.”
 When the leadership appreciates the working culture
of another company or another branch of the same
organization, the employees can react in two ways-
 Being motivated because of a direct comparison
 Losing trust in the leadership
 In this case, the statement seems fine because the
company is trying to defend itself for its move to shift away
its production from the home country.
“There’s no American plant that can match that.”
 Itis a direct demotivation for the workers working in
America because the executive has directly stated
that American workers are inferior.
 Such statements will not only decrease the efficiency
of the workers but also can create a negative image
of the company.
“We shouldn’t be criticized for using Chinese workers.
The U.S. has stopped producing people with the skills
we need.”
 Thisstatement not only criticizes the workers in the U.S.
but also try to question the lack of skilled American
labour.
 Thisstatement too can have a negative impact on the
labour and can create a negative brand image.