Case 14 apple inc ethical success and challenges

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAM **** ASSIGNMENT REPORT: BUSINESS ETHICS CASE 14: APPLE INC ETHICAL SUCCESS AND CHALLENGES Lecturer: Dr Nguyen Bich Ngoc Student Name: Hoang Thai Duong Student ID: 11211553 Class: International Business Administration 63C Ha Noi, September 28st, 2022 Table of Contents 1|Page I, Case summary Introduction 2 Apple’s History Apple’s Corporate Culture Apple Ethics .7 Apple’s Ethical Problems The Future of Apple’s 14 II Questions: Question .15 Question .17 Question .19 III Works Cited .21 2|Page This is a preview Do you want full access? Go Premium and unlock all 23 pages Case 14: Apple Inc Ethical Success and Challenges Access to all documents Get Unlimited Downloads I Case Summary Improve your grades Introduction Headquartered in Cupertino, California, Apple Inc has experienced many Upload challenges throughout its business history From 1997 to 2011 many things had Share your documents to unlock happened but Apple’s share price still risen from $3.30 to $339.87 Before becoming a mega corporation as it is today, Apple had some hardships when the company first started They went through a few CEO’s and some up and down Free Trial Get 30 days of free Premium before truly succeeding Many companies have tried to compete, copied and beat Apple with their products, but none have succeeded in doing so To millions of consumers, the Apple brand embodies quality, prestige, and innovation The brand Already Premium? Log in is valued at more than $153 billion, making it the most valuable brand worldwide Apple’s History Apple began with their first product, Apple I Although it has some bugs and lacked a few essential things like a graphic user interface (GUI) and buyers had to add their own keyboard and display Co-founder Steve Jobs convinced Wozniak 3|Page that it could be sold as a commercial product Jobs and Wozniak continued to create innovative products Soon their new company, Apple Computer Inc., had surpassed $1 million in sales However, the mid-1980s saw some difficult times for Apple In 1983 the company introduced the Apple Lisa for $10,000 The product flopped In 1985 Steve Jobs was ousted after internal conflicts with the Apple CEO Its computer products the Mac I and the Newton were not successful, and the company underwent several CEO changes With declining stock prices, the future of Apple was in jeopardy Jobs returned in 1997 when the corporation was on the verge of bankrupt with new ideas to save the company When he returned, a major thing he changed was Apple’s “closed door” policy This was to ensure employees could not take Apple’s ideas and inventions to another company 4|Page Today Apple continues to remain vigilant in protecting its technology and ensuring that information remains proprietary Jobs also created a more flattened organizational structure; rather than go through layers of management to address employees, he addressed them directly Perhaps one of the most noticeable changes, however, was Apple’s expansion into new product lines within the electronics industry The company began to make a comeback when they introduced the iPod —a portable music player that forever changed the music industry The company also introduced iTunes, a type of “jukebox” software that allowed users to upload songs from CDs onto their Macs and then organize and manage their personalized song libraries Two years later Apple introduced the iTunes Store, in which users could download millions of their favorite songs for $0.99 each online In 2007 Apple was renamed Apple Inc., since they were producing more than computers but also a driver in consumer electronics Apple has begun to take market share away from its top competitors in the computer industry Sales of desktops, laptops, and netbooks began to decline after tablet computers were introduced Analysts believe that tablet computers will continue to grow at a rapidrate 5|Page This is a preview Do you want full access? Go Premium and unlock all 23 pages Access to all documents Apple’s Corporate Culture Get Unlimited Downloads Over the years, Apple made the transition from a computer to a consumer Improve your grades electronics company which is unprecedented and hard to replace This is based on the fact that Apple owned highly skilled employees and its strong corporate culture Upload create evangelists who extensively promote the corporation products Share your documents to unlock The concept of evangelism is an important component of Apple’s culture Corporate evangelists refer to people who extensively promote a corporation’s products Apple even had a chief evangelist whose job was to spread the message Free Trial about Apple and gain support for However, as the name evangelism Getits 30products days of free Premium implies, the role of evangelist takes on greater meaning Evangelists believe strongly in the company and will spread that belief to others, who in turn will Already Premium? Log in convince other people Therefore, evangelists are not only employees but loyal customers as well In this way, Apple was able to form what it refers to as a “Mac cult”—customers who are very loyal to Apple’s Mac computers and who will spread a positive message about Macs to their friends and families When Jobs return to Apple, he instituted two cultural changes: He encouraged debate on ideas, and he created a vision that employees could believe in By implementing these two changes, employees felt that their input was important and 6|Page that they were a part of something bigger than themselves, which creates loyalty among many at Apple The unique corporate culture is what Apple take pride on, it ensures potential applicants that the organization has a flat structure, the layers of bureaucracy of other corporations Apple also emphasizes that it does not adhere to normal work environments in which employees are at their stations from 9:00 a.m to 5:00 p.m Instead, Apple markets itself as a fast-paced, innovative, and collaborative environment committed toward doing things “the right way.” By offering both challenges and benefits to applicants, Apple hopes to attract those who fit best with its corporate culture Apple is also looking for sales employees who fit well into its culture Apple wants retail employees to feel welcome to all consumers Inside Apple's retail stores, there are stations where customers can try and experiment with his latest Apple products Staff are trained to speak to customers within two minutes of entering To help keep retailers' employees motivated, Apple provides extensive training, higher compensation than similar store employees, and manager genies (employees trained to answer more difficult customer questions) Or offer opportunities to be creatives (staff members who train through individual customers or workshops) Apple also offers young people the opportunity to intern at Apple or become a school student representative Another advantage Apple offers is connecting employee concerns with environmental concerns To reduce the overall environmental impact, Apple offers 7|Page incentives, such as public transit subsidies, to employees who choose to use public transit These incentives reduce employee fuel costs while reducing emissions to the environment Apple Ethics Apple produces many of their products in other countries where labor costs are cheaper They make their suppliers sign a “Supplier Code of Conduct” in order to keep doing business with Apple This ensures that employees are being treated correctly, not being over worked, and being paid for their time Apple will then release an annual report stating how their suppliers are doing to prove that they are an ethical company Apple has run into some ethical issues such as product quality, privacy, sustainability, intellectual property, and patents Apple has also taken action to become a green company They wish to reduce the gases being released, and design their products around environmental factors Apple has also started a recycling program for old electronics 8|Page This is a preview Do you want full access? Go Premium and unlock all 23 pages Apple’s Ethical Problems Access to all documents Despite the effort they put on to improve the work environment, Apple still faces Get Unlimited Downloads many ethical issues These issues could have a profound effect on Apple’s sterling Improve your grades reputation could easily be damaged by serious misconduct or a failure to address risks appropriately These issues include:  Privacy Upload Share your documents to unlock Apple in the past had gone through consumer tracking controversy With the increase in social networking, mobile devices, and Internet use, the ability for companies to track customers is greater than ever before For Apple more customer Free Trial information can help it better market product understand its customers Get 30 its days of freeand Premium However, the firm must still show respect for consumer privacy, and a breach in privacy is likely to result in a backlash against the company Already Premium? Log in In 2011 Apple experienced just such backlash, Apple and Google Certain features of the cell phones they sell collect data about the location of the phone Consumers and government officials saw this as a violation of user privacy These companies have announced that users will have the option to disable these features on their phones, as some phones continued to collect location information even after users disabled the feature, which was not entirely true for Apple Apple attributes this to a bug they fixed in their new software Both Google and Apple defend their data 9|Page collection mechanisms, but many government officials disagree The government is considering passing a law on mobile privacy This is a move that could have significant effects on Apple and other electronics companies  Sustainability Although Apple has taken step to become an environmental friendly company like reducing the environmental impact of the facility However, the company admits that the majority of emissions come from its products In 2009, Apple said its activities contributed to his 9.6 million tons of gas emissions 3% come from the facility, while 97% come from the product lifecycle Because Apple's success depends on the constant development and introduction of new products, the environmental impact of its products is a serious concern One practice some consumers criticize Apple for is planned obsolescence It encourages people to replace or upgrade their technology when Apple releases updated versions Apple is constantly releasing new products, so older technology can be thrown away Apple has taken several approaches to this problem The company builds its products from recyclable materials to make them last longer To encourage customers to recycle, Apple has established a recycling program for old iPods, mobile phones and Macs in stores Consumers who trade in their old iPod can purchase the new version at a 10% discount Consumers who recycle old 10 | P a g e Macs that still have value can receive gift cards Apple works with local recyclers that comply with applicable laws Despite this recycling program, many consumers find it more convenient to dispose of older products, especially those that have lost their value E-waste will continue to be a significant problem as long as consumers discard old electronic devices  Intellectual Property Intellectual property theft is a major concern for Apple, and an issue the company is actively pursuing Apple is serious about keeping proprietary information confidential to prevent other companies from stealing its ideas This has resulted in a number of lawsuits between Apple and other technology companies In 1982, Apple filed a lawsuit against the Franklin Computer Corporation, which had a major impact on intellectual property law Apple claimed Franklin's illegally formatted copy of the Apple II operating system and ROM could run on a Franklin computer Franklin's attorney argued that some of the computer programs were not copyrightable The court initially sided with Franklin, but later overturned the ruling The court ultimately ruled that the code and programs are copyrighted The law gives technology companies broad intellectual property protection Another notable case was Apple's lawsuit against Microsoft after Apple licensed its technology to Microsoft When Microsoft released Windows 2.0, Apple claimed 11 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages that the license agreement only applied to Windows 1.0 and that Microsoft's Access to all documents Windows had the "look and feel" of Apple's Macintosh graphical interface system Get Unlimited Downloads "GUI" The court ruled in Microsoft's favor and determined that the license did not cover the "look and feel" of Apple's Macintosh GUI Although the two had Improve your grades similarities, the court ruled that Windows did not infringe any copyright or license agreement simply because it resembled the Macintosh system Upload The other two lawsuits involved more serious ethical to issues on Apple's part One Share your documents unlock circled around Apple's use of the domain name iTunes.co.uk This domain name was registered by Ben Cohen in 2000 Ben Cohen used this name to redirect users Trial to other of his websites CohenFree eventually used this domain name to redirect users Get 30 days of free Premium to Napster, a direct competitor of Apple Apple tried to buy Cohen's domain name, but after negotiations fell through, the company appealed to UK registrar, Nomi net The first person to register a domain name usually the rights to that Already Premium? Log acquires in name However, the mediator in the case found that Cohen had abused his registration rights and unfairly exploited Apple Apple was granted the right to use the domain name, leading to complaints that large companies (Apple) were being favored at the expense of smaller companies Cisco claimed that Apple had infringed its iPhone trademark Cisco has owned this brand since 2000 Apple and Cisco were debating whether Apple would allow the use of the trademark However, Apple withdrew from the discussion The company 12 | P a g e has since opened a front organization, Ocean Telecom Services, and registered the iPhone trademark in the United States, according to Cisco Some stakeholders viewed Apple's actions as an unfair way to circumvent the negotiated proceedings The lawsuit ended with both parties agreeing to use the iPhone name However, his Apple response to the situation remains controversial  Rioting In early 2012 Apple stopped selling the iPhone 4s at retail stores in China This resulted in massive crowds waiting for 48 hours outside of the flagship store in Beijing began to riot The estimated crowd was upwards of 2000 people Customers waiting for the iPhone starting throwing eggs and harassed the employees  Price Fixing In July of 2013 a judge ruled that Apple had conspired to fix prices on electronics books (e-books) in conjunction with five major book publishers A federal judge ruled that Apple was part of a deal that required publishers to give Apple’s iTunes store the best deals in the marketplace for e-book prices for iPad, and Apple received 30% of the proceeds (known as the “agency model”) Apple denies any wrongdoing and association with this deal and plans to appeal the decision  Threats to Other Companies 13 | P a g e A document suggests that in 2007 former CEO Steve Jobs allegedly threated former CEO of Palm Edward Colligan with patent litigation if Palm did not cease and desist poaching valuable Apple employees Jobs suggested each company should respectively comply with the idea of not taking valuable employees away from other companies This “unspoken agreement” seems to have also included companies such as Adobe, Google, Intel, Intuit, Pixar  Supply Chain Management Issues Apple makes each supplier sign its supplier code of conduct and perform factory audits to ensure compliance In addition, Apple says it has trained over million workers about their rights, increased the number of suppliers it audits by 80 %, and allows outside organization to evaluate its labor practices However, in the last few years serious supply chain issues threaten to undermine Apple’s status as a highly admired and ethical company To meet the continuous demand of Apple consumers, products from the company must be readily available For Apple, most of these products are produced throughout Asia, but more specifically within Foxconn factories in China In the past, multiple accusations pertaining to improper working conditions, underage labor disputes, and worker abuse (which resulted in suicide) have come into question 14 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages Additionally, despite its attempt to audit its factories and enforce strong supplier Access to all documents compliance standards, over 50% of suppliers audited by Apple violated at least one Get Unlimited part of its supplier code of conduct every year Downloads since 2007 Suppliers claim that Apple’s manufacturing standards are hard to achieve Improve your gradesbecause suppliers are allowed to keep more slim profit margin Also they claim that Apple’s focus on the bottom line forces them to find other ways to cut costs, usually by requiring employees to Upload work longer hours and using less expensive but more dangerous chemicals Share your documents to unlock Because of this, mistakes and safety issues become more common, according to the company’s own audits, 62% of Apple’s suppliers did not comply with workinghour limits, 35% failed to meetFree Apple’s Trial standards to prevent worker injuries and Get 30 days of free Premium 32% not follow hazardous-substance management policies Under page workers, falsified records, overcrowded worker dormitories, and other labor violations Apple claims itAlready is significantly improving supplier Premium? Log in condition and becoming more transparent about its labor processes The future of Apple Apple appears optimistic about its future The company has created a cult following of consumers who are intensely loyal to Apple products Apple’s products or services are meant to offer superior solutions to those of competitors 15 | P a g e With other threats of new and existing companies coming out with new and improved products, they still have their loyal customers These customers have always and will always buy Apple products In one of Apple's newest products, Apple continues its foray into the music industry The company struck deals with record labels to introduce his iCloud, a service that allows consumers to create and listen to their own music collections without having to upload individual songs Google and Amazon offer similar music storage services, but Apple has more songs available in her iTunes and deals with its record labels Seize these opportunities to increase Apple's share of the music and consumer electronics markets They are constantly working on producing a new product to benefit their customers and to stay ahead of the game of evolving technology In the last decade, Apple has excelled at keeping pace with the quickly evolving industry of computers and consumer electronics Its diversification, collaborative corporate culture, and product evangelism propelled it to heights that could not have been envisioned when Jobs and Wozniak sold their first computer kit in 1976 The company shows no signs of stopping its momentum, while consumers have shown no signs of reducing their admiration for Apple II Question Explain how Apple’s philosophy and organizational culture have impacted how it handles ethical decisions: 16 | P a g e Apple is an innovating company, though not as innovating as before, they credit they’re company by practicing high form on integrity throughout their business endeavors and they seem to try to handle ethical issues how it is best for the company as a whole For example, being a green company is very important to some customers, and it may be the decision of whether or not to support that company In response, Apple began measures to become a greener company by reducing gasses that are released and introducing an electronic recycling program Apple keeps up to date on any threats on the company itself from companies like HTC, Microsoft, and most recently Kodak The company prides itself on having quality products In order to keep up with this reputation, they try their best to stay ahead of glitches, and they are fixed as soon as they are found Many believe that a big part of Apple’s success is because of the CEO, Steve Jobs’, work ethic When the CEO of one of the biggest companies in the world like company sits down and listens to your idea while you’re just a customer service representative or even an intern, that makes you feel that you can achieve things beyond your capabilities, and that is what Steve jobs has imbedded in the roots of the company and till this day because in the past no matter how many times he failed or a product failed, he always came back to try again This shows the rest of the employees at Apple that mistakes are OK, and they can be corrected and come back stronger 17 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages Access to all documents Get Unlimited Downloads Improve your grades Why is Apple’s industry so competitiveUpload and how could this affect the ethical risks in Apple’s operations? Free Trial Why is Apple’s industry so competitive and how could this Premium? Log inin affect the Already ethical risks Apple’s operations? Share your documents to unlock Get 30 days of free Premium Why is Apple’s industry so competitive and how could this affect the ethical risks in Apple’s operations? Apple's industry is one of the most competitive The technology industry has a fiercely competitive scene and Apple has a wide range of products related to technology It is found in various industries such as computer industry, mobile 18 | P a g e phone, music download industry, etc Perhaps the company's biggest competitors are in the mobile phone industry, where it has revolutionized the way people use mobile technology It has integrated different technologies into one product The mobile phone can perform multiple functions and resembles a minicomputer Today, most of what people use has been automated, changing people's lifestyles Nowadays, people want gadgets that make their life easier and save time They want innovative mobile devices that give them the freedom to work and communicate Many companies are aware of this and are developing products to meet this need This has increased competition within the industry Competition fuels business Efficiency and productivity are increased, and in most cases, product prices are reduced When an industry is highly competitive, companies tend to go all out to secure a large market share This could affect the ethical risk in Apple’s operations in a few ways Firstly, Apple could “lose sight” of their out of country operations They could have them sign the Supplier Code of Conduct, but they may stop enforcing it so much The case states that Apple does random audits to make sure their suppliers are working under the correct and legal working conditions, but they could skip that step and just assume since the agreement is signed, it is happening 19 | P a g e Secondly Apple could also push their suppliers to work faster to produce their products The suppliers could begin taking short cuts to make the product quicker, which could decrease the value of them The product may not last as long, or have more bugs in it In turn, this could affect the customers If they receive a new phone that still has kinks that need to be worked out, they may not be a happy customer and may leave the Apple name for another brand Apple has also been accused of hiring cheap labor, which in itself is unethical Some of the company’s products are manufactured in Taiwan, where the employees work in abusive conditions (Leonard) However, it is important to note that the company has managed to stay all these years with only a few scandals that touch on ethical standards This is because the company has instilled upon its employees to conduct themselves right irrespective of the circumstances How you think Apple has handled the various ethical issues that it has faced in the past? I think Apple has responded well to most of the ethical allegations made against the company For example, it had ensured not to use toxic chemicals in manufacturing products Most toxic substances such as fluorescent lights have been replaced by light-emitting diodes that not require mercury for lighting In addition, the company has established a recycling program aimed at recycling old electronics to reduce improper disposal and ensure the sustainability of the rapid 20 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages innovation in electronics, making old electronics obsolete Access to all documents Get Unlimited Downloads Improve your grades Upload Share your documents to unlock T Free Trial herefore, recycling program ensures that materials used in older electronics are not daysThis of free Premium wasted, as some materials are Get still 30 usable means that environmental concerns, which are important issues for many companies these days, and sustainability in development and innovation, are taken into account Remember, through programs Already Premium? Log in like this, Apple has acted ethically in addressing this ethical issue All the more so given that customers offer discounts and gift cards to exchange their old or working devices for new or updated devices Moreover, while this would cost the company a lot of money, the move is an example of a company dealing with ethical issues on a scale similar to the impact it would have if left unaddressed Apple is also definitely reducing its carbon footprint by offering free transfers This means that the employee does not have to use the car to commute, thus not 21 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages increasing CO2 emissions in the atmosphere Recently, the company was accused Access to all documents of making its Taiwanese employees work in appalling and abusive conditions Get Unlimited Downloads Some workers complained that they were forced to work more than 60 hours a week, more hours than required by law.your Additionally, Improve grades some workers claimed that their children were allowed to work in the company Management responded and resolved the issue by changing working conditions at the affected factories Upload Finally, another ethical issue the company occasionally Share your documents to faces unlockis privacy After the company, along with Google, revealed that the phones sold collect data on the phone's location This made customers feel their privacy was violated The Trial company fixed the problem byFree introducing software, but some complain that the Get 30 days of free Premium problem still persists after Apple says customers can choose to turn the software on or off This has prompted the government to consider passing new legislation on the matter This will definitely affectPremium? the company.Log This in is one area where Apple Already has not fully resolved ethics-related issues However, the company has dealt with majority of its ethical issues well III Works Cited: Daniels Fund Ethics Initiative Apple Inc’s Ethical Success and Challenges University of New Mexico 22 | P a g e This is a preview Do you want full access? Go Premium and unlock all 23 pages Enderle Rob Apple and the Ethical/Business Problems of Child Labor and Access to all documents Other Unsavory Practices itbusinessedge.com, Mar 1, 2010 Web May 7, 2012 Get Unlimited Downloads your grades Ferrell, O C et al BusinessImprove Ethics: Ethical Decision Making and Cases New York, NY: Cengage Learning, 2010 Print Upload Leonard, Andrew There is no Ethical Smartphone Feb 23 2012 May 4, 2012 Share your documents to unlock Trevino, K Linda and Katherine, A Nelson Managing Business Ethics Hoboken, NJ: John Wiley & Sons Free Trial Get 30 days of free Premium Already Premium? Log in 23 | P a g e