Business Proposal Presentation

GCU PSC-495

Professor Wesley Walter

April 15, 2018

Problem Statement: Unethical Practices in Apple’s Supply Chain

Identification of the Problem

Apple is one of the richest organizations in the world. In 2015, the organization was ranked as the world’s most valuable brand at $247 billion (Clarke & Boersma, 2017). The company was the first American firm to attain a market capitalization of &700 billion, which is almost double the market capitalization of Google and Microsoft combined (Clarke & Boersma, 2017). Nonetheless, the world’s most valuable organization has attracted a lot of negative media publicity in the last five years. The organization has come on the spot for allegedly failing to observe universally accepted labor standards in its supply chains in Africa and Asia (Schiller, 2010). For instance, media firms and human rights activists have identified and evaluated more than 100 facilities. In these premises, approximately 17 key violations, such as eight cases of excessive recruitment fees, three cases involving underage employees, and three situations in which suppliers utilized non-certified hazardous waste disposal providers.

A significant number of laborers have been subjected to poor working conditions and low wages. Furthermore, most of companies that provide supply services to the organization subject their laborers to long working hours and over-working conditions, approximately over 60 hours a week (Schiller, 2010). This was especially common in about 55 factories. The cases of violations by far surpassed the limits by more than half the timeframe (Schiller, 2010). Numerous complaints relating to low payments and underpayments have also been identified in these supply factories. For instance, more than half of the apple employees raised complaints that they were not just deprived of their federal and internationally-required minimum wages, but they were also denied maternity leaves. In worst case situations, some employers even refused to pay them altogether due to disciplinary purposes (Schiller, 2010). Although Apple insists that its policies prohibit such unethical practices, the company has not made significant efforts to address the problems that continue to confront its supply chains scattered across the planet.

As Apple continues to enjoy meteoric rise as the world’s most iconic brand, there is an increasing body of evidences that emerge of the negative impacts of unresolved human rights, environmental, and ethical dilemmas in its supply chains (Clarke & Boersma, 2017). Indeed, the beauty of the organization’s brilliant designs and highly polished products eventually rely on the suffering of youthful laborers in electronic sweatshops (Clarke & Boersma, 2017). In such premises, there are gross and systematic violations of human rights standards, labor laws, and environmental safety policies.

Potential Consequences of Not Addressing this Problem

Apple must resolve the ethical problems that continue to affect it for it to protect its image and reputation as a listening and caring organization. Public image is one of the indicators of consumer loyalty. Therefore, as the organization continues to hit the headlines as one that accommodates gross and systematic violations of human- and labor rights, consumers are most likely to lose confidence in the brand. A significant number of consumers often support equality and fair labor standards. As such, they are less likely to associate themselves with an organization that neither stands or social justice, not environmental conservation and sustainability. Apple is also most likely to face numerous lawsuits and litigations that will only result in dramatic reduction of its revenues due to heavy fines.

Proposed Solutions to the Problems

There are various steps that Apple can take to reverse the worrying trends of unethical practices in its supply chains across the world. Proactive strategies are often the best steps that can be taken to deter possible loss in consumer loyalty to the company (Errell & Speh, 2017). However, when the crisis has already taken place, the organization can manage ethics in the distribution and supply chain strategies. For instance, the company can develop a supplier code of conduct. This must be followed by undertaking regular audits to ensure that supply firms are observing compliance standards (Errell & Speh, 2017). Most significantly, the organization can engage in public relations and communication campaigns to assure its clients and stakeholders that they are taking genuine steps to address the problems.

References

Errell, O.C., & Speh, W.T. (2017). Marketing strategy, loose-leaf version. Boston: Cengage

Clarke, T., & Boersma, M. (2017). The governance of global value chains: Unresolved human

rights, environmental and ethical dilemmas in the apple supply chain. Journal of Business

Ethics, 143(1), 111-131.

Schiller, B. (2010). Analysis: Apple’s supply chain – iResponsibility. Ethical Corporation.