Business Proposal Put Together

Daniella Clingman

GCU PSC-495

Prof. Wesly Walter

May 27, 2018

Business Proposal

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Professor’s Comments:

Daniella; Very nice work here in the ppt covering all the assignment criteria! Your use of the Notes section to flesh out the details of the slides was laudatory! Even without a video this submission would have scored an “A” level grade if submitted on time. It will still do well.

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Apple is among the wealthiest firms in the world

Ranked as world’s most valuable firm in 2015

However, it has been attracting negative media publicity

Problem brought by ethical malpractices in its supply chain

Cases include: child labor, poor working conditions, harassment of workers, environmental degradation, and underpayment.

Introduction

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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.

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1. Poor Environmental Sustainability Standards

Suppliers in china violated government safety

Manufacturers accused of violating occupational safety regulations

There were numerous cases of pollution reported to government regulators

Large quantities of hazardous wastes were dumped into immediate neighborhoods, posing health concerns

1. Identification of Problems

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Environmental sustainability and conservation forms an integral part of an organization’s social responsibility. Although Apple’s supply firms such as Baosteel and Haworth have taken the lead in promoting environmental conservation, the two firms have attracted public criticisms from Chinese activists, government agencies, and non-governmental organizations (Murphy & Sherry Jr, 2013). Therefore, Apple has been accused of not just violating occupational safety, but also harming the environment. Although Apple responded by defending itself, it failed to address the main issues that were raised by these bodies. For instance, there were numerous cases of spread of pollution through the organization’s supply chain. A large body of case studies found that Apple’s supply chain had shocking levels of environmental pollution, resulting in direct harm to the immediate community members in terms of emission of poisonous gases (Murphy & Sherry Jr, 2013). There also large quantities of hazardous wastes that left hidden dangers for the Chinese communities that live within these factories. An audit report also found that there were blood-stained productions. Thus, as the organization carries on with its expansion agenda, it continues to confront numerous ethical challenges related to the environment. This has resulted in emergence of opposition in China through aggressive environmental groups and green coalitions such as the Green Choice Initiative. Therefore, Apple should seek ways of engaging its stakeholders on dialogue about environmental sustainability.

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2. Poor Employment Practices of Foreign Suppliers

Apple contracts organizations in developing countries to produce its products

Some firms hired women and children at below minimum wage rates

Workers were subjected to long working hours

Laborers operated in environments characterized by health hazards

Some firms were offensive to women and would deduct their salaries

Identification of the Problems

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Apple is one of the American firms that contract with organizations in developing economies to generate products, such as electronic devices. This is partly attributed to the fact that the wage rates in those countries are significantly lower than the wages in the United States. However, most of these firms exploit their workers through practices such as involving women and children at below minimum-wage rates or by subjecting them to long working hours in environments that are characterized by health hazards. In some situations, some supply chain organizations are offensive to women and often deduct their salaries for participating in labor unions. Just like other high-tech firms, Apple is reliant on foreign suppliers for production of components and assembly of many of its products (Clarke & Boersma, 2017). After the unveiling of many labor issues with its foreign suppliers and manufacturers, Apple reported that it began to assess practices at its supply chains and to communicate its ethics. However, this move has not generated its desired results. Critics argue that Apple was not fully committed to ensuring that its practices are fully observed and implemented.

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3. Failure to Verify the Supply Chain

. Apple failed to comply with federal and international regulations

Regulations require suppliers to have adequate controls to safeguard product safety and ethical practices

Company lacked an ethical monitoring, evaluating and auditing tool to assess suppliers’ ethical conduct

Identification of Problems

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Apple failed to comply with federal and international regulations that require verification that their supply chain has sufficient controls to safeguard both product safety and ethical practices. Numerous organizations have come to the fore in attempting to demonstrate ethical sourcing throughout their value chains (Gonzalez-Padron, 2016). The organization can manage ethical issues in the supply chain through monitoring efforts that evaluate their suppliers’ ethical environmental performance and competences in connection to ethical standards. In particular, the organization failed to undertake supplier audits, which is a popular mechanism of monitoring suppliers and essentially entails use of assessment questionnaires (Gonzalez-Padron, 2016). Additionally, the company may undertake regular site visits and inspections to verify the degree to which their suppliers comply with universally accepted ethical standards. Monitoring activities can be accompanied by consulting certification bodies such as Global Reporting Initiative, Social Accountability 8000, as well as ISO certification. These certification bodies often require proper verification of the degree to which a potential supplier complies with the global and local ethical standards (Gonzalez-Padron, 2016). Some firms often undertake supply chain audits ion a regular basis to evaluate the degree of compliance with internationally accepted industry codes of conduct, such as the Electronics Industry Code of conduct.

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Apple’s Audit Report on Cases of Violations in 2017

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Apple should develop a two-way communication channel to encourage stakeholders to voice their ethical concerns

Being listening organization helps to address the complaints

The company should introduce ethical auditing programs to evaluate suppliers’ conduct

2. Proposed Solutions

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Apple should develop an open and two-way communication channel in which people are able to voice their concerns and the organization’s leaders respond in a timely fashion. Therefore, Apple should work as a listening organization. Further, the organization should introduce an auditing model that evaluates the conduct of suppliers with respect to its ethical standards and guidelines. Currently, there is a major disparity between Apple’s declared values and standards and the actual ethical behaviors of its suppliers and business partners (Clarke & Boersma, 2017). Like other multinational corporations, Apple scores high-grade in corporate social responsibility standards but is in actuality breaching CSR principles in the behaviors of its suppliers. This is partly attributed to the fact that its social responsibility markers might not behave in a socially responsible way. Ethics auditing can be important in ensuring that all the ethical standards are observed by the organization’s suppliers.

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Company should develop labor relations principles and standards for all suppliers

Firm should cut ties with suppliers who do not embrace good labor laws

Company should disengage with suppliers who punish employees who have joined labor unions

Apple should collaborate with activists and stakeholders to improve standards of living of employees in supply chains

Proposed Solutions

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Finally, Apple should develop labor relations principles and standards that should be followed by its suppliers. The firm should cut ties with suppliers who are expressing hesitance to embrace good labor laws (Adeyeye et al. 2015). For instance, Apple should disengage with suppliers that punish employees who join labor groups and unions. In addition, the company should join hands with activists and other stakeholders to improve the standards of living of employees within its supply chains. Further, the organization should launch business transformation and change management initiatives. Apple can improve its own ethical climate by promoting radical transformations from the top, too speedily and in frequent ways. In particular, the implementation of programs such as those that seek to avoid conflicts of interest.

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Apple should develop management, assessment, and control of its supply chains’ ethical programs

The firm will start by developing standardized ethical codes for all suppliers

Codes will address unfair labor practices, child labor, employee harassment , and environmental issues

A communication plan will be developed o update stakeholders on ethical progress

All suppliers and employees will undergo ethical training and ways to ensure employee safety

3. Implementing the Solutions

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In light of the above challenges, Apple needs to cope and respond to the realities of implementing an ethics program for its supply chain. This will require execution of specified actions that ensure the realization of business ethical objectives. In particular, Apple will develop strategies of managing, assessing, and controlling its business ethics programs. There are five key elements that will form the basis of the implementation plan. First, the organization will develop a standardized code of ethics for all its supplies. The contents of the code of ethics document will include ethical issues that mainly affect these companies, such as unfair labor practices, child labor, employee harassments, environmental degradation, and poor working conditions. In addition, a clear communication plan will be developed to communicate to the public and all stakeholders on the efforts that Apple is taking to address the ethical concerns raised by the media and members of the public. The communication plan will also be used to receive regular updates from all suppliers on the progress that they have made to address the ethical concerns that are affecting them. Communication will be done on a regular basis in order to effectively manage progress and potential challenges that might emerge. Another important part of the implementation program will include training and mentoring of all suppliers on ethical issues. Training will be offered on a periodical basis to keep them updated on major changes that might occur. Further, regular ethical audits will be conducted on suppliers for conformity. Audits will examine the degree of observance of ethics in relation to the ethical standards set by the company.

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Evaluation will be done with respect to how far the company has reached its ethical goals

Evaluation procedures will include: summative, impact, and outcome evaluations

Impact evaluation will examine goal realization and consequences of the implementation plan

Metrics will include: increase or reduction in number of complaint calls, and percentages f anonymous complaints

Another metric will include use of Measurement and Metrics Guide (MMG)

4. Evaluation Plan

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The evaluation process will mainly focus on assessments of the degree to which the goals have been realized. These assessment criteria often fall under these evaluation mechanisms: summative, impact, and outcome evaluation. Impact evaluation not only measures the goal realization, but it also assesses all the consequences of the implementation plan. Based on these evaluation mechanisms, the program will identify several metrics of assessing the performance of the implementation plan (Mertens & Wilson, 2012). Organizational ethics will be assessed in two ways: as a process and as an outcome. For instance, the number of calls and complaints to the help-line is a measured that will be helpful in examining the severity of the problem. Thus, the percentage of anonymous calls to the ethics help-line is an effective indicator of how comfortable employees and other stakeholders feel about the company’s ethical image.

Another method is derived from a model proposed by the Open Compliance and Ethics Group, which proposes an objective measurement and Metrics Guide (MMG). This model uses leading and lagging indicators that would support the company to examine and report compliance with ethics programs and guidelines (Information Resources Management Associations, 2016). For example, lagging indicators can expose past performance in terms of revenue growth as a direct effect of improved ethical behaviors such as reduced cases of theft, reduction in unfair labor practices, and decline in environmental emissions and wastes. Leading indices can project future performance in terms of timely delivery rates due to low levels of employee loafing. Whatever standard that will be used, the company will ensure that they are specific, measurable, actionable, relevant, and timely (Information Resources Management Associations, 2016). Finally, the implementation program will use people survey as a tool to determine the ethical quality of the company as viewed by both external; and internal stakeholders. This tool can be important in comparing a collection of data over a specified period of time and compare the firm with the performance of other competing organizations.

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Adeyeye, O. J., Adeniji, A. A., Osinbanjo, A. O., & Oludayo, O. O. (2015). Effects of Workplace Ethics on Employees and Organizational Productivity in Nigeria. International Conference on African Development Issues (CU-ICADI) 2015: Social and Economic Models for Development Track

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.

Gonzalez-Padron, T. L. (2016). Ethics in the Supply Chain: Follow-up processes to audit results. Journal of Marketing Channels, 23(1-2), 22-33.

McLaverty, C., & McKee, A. (2016). What You Can Do to Improve Ethics at Your Company. Harvard Business Review.

Murphy, P. E., & Sherry Jr, J. F. (Eds.). (2013). Marketing and the Common Good: Essays from Notre Dame on Societal Impact. London: Routledge.

Schiller, B. (2010). Analysis: Apple’s supply chain – iResponsibility. Ethical CorporationRetrieved from http://www.ethicalcorp.com/supply-chains/analysis-apples-supply-chain-Irresponsibility

Sethi, P.S. (2012). Two faces of Apple. Carnegie Council for Ethics in International Affairs.

References

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