Apple Ethics

Apple was founded in 1976. Apple and its subsidiaries manufacture and design marketing mobile communication and media devices, personal computers, and portable digital music players along with related software, services, peripherals, networking solutions, and third-party digital content and applications. (nytimes.com) Ethical or unethical behavior in the workplace of Apple as a company has been up and down with some controversy.

Apples ethics have been noted as being unethical in the past and recently Apple has been accused of overworking employees long hours and having dangerous working conditions in its suppliers in China. Recent ethical behavior of Apple was the touring and visiting of Foxconn factories in China to monitor the work conditions there. On the unethical side poor working conditions there have gone on for years with numerous accidents and fatalities. Apple has recently done audits of these companies and given pay raises to the workers there. Not until recently, has attention been given to do something about the problem. (ethicsbob.com).

Apples CEO & his personal ethics have affected the company in different ways. Apples’ CEO is Tim cook. He has incorporated his personal ethics into Apple. One article quoted him as being highly ethical while I have seen some instances in the news that show other examples of ethics. It has been stated that Tim Cook has imprinted his leadership into to all aspects of Apple. (9to5mac.com). Recently, people have been tying Tim Cook’s ethics into his decision of turning down stock dividends worth $75 million dollars.

He turned down what some would call an excessive compensation that a lot of companies have been offering their CEO’s lately. Some say that Cook used this opportunity to show the companies ethics and improve its image due to the current work conditions going on in its Chinese production. It was stated that cook may be trying to improve or make Apple’s social image look better. One researcher had mentioned that Cook’s ethics and leadership were a bad match to Apple because the company is more of a charismatically-driven organization when it comes to leadership;.

Examples of Apples CEO’s ethical behavior have been demonstrated throughout many situations. On Apple’s webpage it mentions the governance and expectancies regarding what ethical guidelines their CEO and board of directors should follow. The board of directors is to oversee their CEO’s and other senior management complies with competency ethical operations on a day to day basis. Apple mentions their CEO should take a proactive, focused approach to positions while setting standards committed to business success and high standards.

One example is Tim Cook’s recent visit to workplaces at Foxconn in China and also met with Vice Premier Li Keqiang to strengthen relations with them in a law following manner to also increase honesty in relations. Cook has also responded to emails and complaints to make an ethical I-phone to change workplace conditions by saying, “Apple cares about every worker in their worldwide supply chain”.

Cook also stated that any accidents related to the company were deeply troubling and any issue with working conditions is a concern to Apple. (Ngak). Apple’s CEO’s statements show his ethical behavior by acknowledging there is a problem and it a concern. It shows the values he holds as well as the organization to society by acknowledging the problem and commenting on it.

In the following paragraph are some examples of Apples CEO’s unethical behavior. Recently Tim Cook Apple’s CEO got bad press for a bonus package he received. (DeWitt). Some may consider it bad ethical behavior to except such a bonus package. Some may consider this unethical behavior because it could be considered a conflict of interest because it involves a payoff or kickback. Earlier in the year Cook was granted one million dollars in restricted stock units and he got some bad press for the unethical look of this. (DeWitt). How has the CEO’s ethics affected Apple?

His competency to identify ethical issues such as in the case with workplace conditions show his ethical behavior affecting Apple by showing the company cares about its workers and what society thinks of their ethical behavior. Apple’s CEO also affected Apple by helping change the workplace conditions and modifying their pay.

This showed a willingness to make decisions concerned with ethics of the company. Cook also turned down a $75 million recently which looked good as a leader for the company. Some might say that this showed honor to the company in the right moral category because he was not morally obligated to forgo the cash. He could have taken the dividend like other shareholders and been fully in his own and Apples rights, both legally and ethically. (Macdonald).

What has Apples CEO done to fix ethical issues? He has recently worked on changing the working conditions in the Foxconn factories that make I-pads and I-phones. Apple has recently done audits of these companies and given pay raises to the workers there. Not until recently has attention been given to do something about the problem. (ethicsbob.com). Treatment of workers in the workplace: Apple has recently been accused of having unethical workplaces.

These conditions included: labor in harsh conditions, onerous work environments and serious or sometimes deadly safety problems. Workers health was treated as not as important or of concern with safety risks. Working conditions had gotten so bad that workers were committing suicide and safety nets were installed to catch them from falling to their deaths. Employees also work excessive overtime and live in crowded dorm style living. Underage workers were also working in the workplace. (Duhigg). What ethical rights are being violated? Human rights are the major right being violated here. Values such as perceptions of right and wrong are violated in some of these cases.

For example honesty in the provision of accurate information was violated by letting underage workers be employed and the destruction of the records of them doing so. (Duhigg). Instrumental and Terminal values are effected in the situations of unsafe workplaces and safety because they concern honesty, sufficiency, happiness, self-respect and freedom. Other ethical issues that come into play in these situations are interpersonal abuse, organizational abuse, rule violations, ethical dilemmas, lying, deceit and accessory to other unethical acts. How the unethical treatment of these workers affects the company’s reputation and sales?

The company’s reputation has been effected by the unethical treatment of workers in the workplace, but it has not seemed to hurt their sales much. People have petitioned and protested for a more ethical Apple to change its labor ways. Some protestors mentioned that they could no longer ethically support Apple because of the products harming the people who make them and they need to be held accountable. (Segall).

The unethical treatment of workers has also affected the company’s image as they like to be known for “feel good” products and services. It was said, “That consumers feel disingenuous to offer feel good products at the cost of laborers who don’t feel good”. For this reason, Apple has recently been said to be motivated to ensure that feeling good is experience throughout their entire production cycle. (resourceslife.com).

What is being done to fix unethical workplaces of Apple to an ethical situation? Apple is taking control of fixing unethical issues by working on labor and human rights. They are doing this by taking a strong stand on prohibiting practice that threatens human rights even in situations where local laws and customs permit the practices.

Apple has taken action by ending excessive requirement fees, preventing the hiring of underage workers and prohibiting discriminatory policies at its suppliers. Apple is also now the first company to be admitted to the Fair Labor Association. By being a member of the FLA they have opened themselves up to audits to be done in their workplaces. So Apple is trying to improve their ethical behavior and incorporate their values more. (Apple.com). Lawsuits or recalls that pertain to Apple have affected the company. An anti-trust lawsuit was filed against Apple by the department of justice in April of 2012 against them and several book publishers.

Apple is accused of conspiring with book publishers to e-book prices in connection with I-pad. (Wingfield). How the lawsuits or recalls have affected the company: The e-book lawsuit has not affected the company much as only a small part of sales comes from e-book. (Rubin). However, customers were now aware that they were paying more than they should have which looks bad for Apple’s reputation and ethics. With the second lawsuit it gave the company a bad image of its ethics in my opinion.

One major recall that affected the company was the recall of the I-phone 4. Bad consumer reports hurt the company ethically as Apple was said to know of these faults as the product came out. (wsj.com). This has raised questions of rule violations, personal decadence, hiding or divulging information and deceit which are all ethical issues.

What was done to fix the issues and what does say about Apples ethics? Apple had filed a formal response stated its objections in a new filing stating this: “Accusing the government of siding with “monopoly, rather than competition”. This was in reference to Amazon’s e-book retailing being a leader in this line of business. (Wingfield). Apple’s CEO has made some wise and unwise decisions ethically.

Some have reflected well on the company while other decisions were made to look bad ethically by the press. For, example the payoff that Tim Cook received was looked as having bad ethical value on his part by the press than later looked at as now being ok sense turning down more money.

In the workplace with Apple’s suppliers unethical behavior was dominant for a long time researched showed. Unethical treatment like unsafe work environments, lack of safety and worker suicide gained a lot of attention. As of this year Apple has begun to change those workplace practices and audit the supplier’s workplace conditions more often. Apple is now being more dedicated to changing those practices and is gaining publicity for their ethical behavior.

Lawsuits and recalls have affected the company’s ethics and reputations, but not seem to hurt sales that much. It did have an effect on the way the company is perceived with their ethics and where their values come into play.

My personal opinions on Apple’s ethics have led me to some different conclusions concerning ethics. Apple has violated a lot of ethical principles in my opinion through their suppliers. It looks as if they are trying to better these conditions as make their values of the company more consistent with their ethical behavior.

Workplace conditions of their supplier really made their company look bad from an ethical standpoint. Lawsuits have brought to light some of Apples showed unethical behavior by knowing about unethical behavior and failed to report it by fixing prices. What I have learned and how my perceptions have changed with regard to ethical behavior has changed.

I have learned there is a lot more to ethical behavior than what I thought before. Actions, decisions, consequences, organizational value all effect ethical behavior. One person such as a CEO can affect the whole company or direct ethical or unethical behavior. My perceptions of what we sometimes see in the news as bad ethics is not always bad ethics such as in the case with Tim Cook taking a payoff. I don’t really think it was that unethical after seeing he turned down more money later on and could have actually received more money. I learned that different

cultures hold or accept different values of ethics. For example, what went on in China for so long with Apples supplier would have never been accepted or went on that long in the United States, I think. I have learned that a company that has competency to identify issues of the unethical nature can do a lot by recognizing the problem and taking steps to fix it. This really goes a long way to change a company’s reputation or image.

Sources Cited:

  • “Apple CEO Tim Cook gets report card from Al Gore in TIME’s 100 Most Influential People list,” http://9to5mac.com/2012/04/18/apple-ceo-tim-cook-gets-report-card-from-al-gore-in-times-100-most-influential-people-list/
  • “Hooray for Apple CEO Tim Cook for seriously addressing labor issues in China. When will Nike follow suit?” http://ethicsbob.com/tag/apple/
  • “Apple Incorporated” http://topics.nytimes.com/top/news/business/companies/apple_computer_inc/index.html
  • Wingfield, Nick “Apple Strikes Back at Government E-Book Lawsuit” http://bits.blogs.nytimes.com/2012/05/25/apple-strikes-back-at-government-e-book-lawsuit/?ref=applecomputerinc
  • Rubin, Josh “Apple, publishers, e-book price fixing lawsuit could benefit consumers” http://www.thestar.com/business/article/1159613--apple-sued-for-e-book-price-fixing
  • Ngak, Chenda, “Apple's Tim Cook visits Foxconn in China, speculation ensues” http://www.cbsnews.com/8301-501465_162-57406420-501465/apples-tim-cook-visits-foxconn-in-china-speculation-ensues/
  • DeWitt, Phillip, “Apple CEO Tim Cook to forgo a $75 million dividend payout”. http://tech.fortune.cnn.com/2012/05/24/apple-ceo-tim-cook-to-forgo-a-75-million-dividend-payout/
  • Duhigg, Charles, “In China, Human Costs Are Built Into an iPad”. http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all
  • Segall, Laurie “'Ethical iPhone' protests hit Apple stores”. http://money.cnn.com/2012/02/09/technology/apple_foxconn_petition/index.htm
  • “Apple and Ethics: Consumer Response to Unethical and Inhumane Factory Labor Practices in China” http://www.resourcesforlife.com/apple/ethics
  • “ Labor and Human Rights” http://www.apple.com/supplierresponsibility/code-of-conduct/labor-and-human-rights.html
  • “Apple Knew of I-Phone Issue” http://online.wsj.com/article/SB10001424052748704682604575369311876558240.html