Module Six Assignment: Global Supply Chain Case Study
Tara Bates
INT220 Module Six Assignment
Professor Brian Griffiths
October 13, 2024
Module Six Assignment: Global Supply Chain Case Study
When you are an innovative multinational technology conglomerate, the spotlight is often
shown on areas that would normally go unnoticed. Foxconn, a major supplier in China of Apple
products during 2009, was accused of violating labor rights laws. Apple worked hard to
overcome the negative publicity received for their supplier’s poor management, but then in
December 2014, Apple was in the media again for labor law violations, this time with their
supplier Pegatron. The negative publicity Apple received from supplier’s labor law violation
prompted the firm to evaluate their business practices to overcome the negative press. Jeff
Williams was promoted to the role of senior vice president for Operations 15 days prior when he
was put in charge of what Apple called “end-to-end supply chain management dedicated to
ensuring that Apple products meet the highest standards of quality.” This stance worked when
Apple made the Forbes list of companies that have the best reputation for corporate social
responsibility. When operations are outsourced to outside the company’s corporate headquarters’
country it is difficult to oversee how your suppliers are truly managing the business and
production.
Apple products are on a platform all their own, which in turn drives the cost of the
products. Apple’s smartphone was key to their success and has contributed to customer loyalty
which generates sales for other products within their line. With success came responsibilities
from stakeholders, consumers, investors, NGOs, and government. Apple has an obligation to
meet the expectations from their home country. While all multinational firms are required to
follow the laws in the countries, they do business in, it seems that Apple was put under a
microscope largely in part because of their reputation. Another area that has caused problems for
Apple was their relentless price policy. They had exceedingly high expectations but wanted their
price point at lower costs. When Foxconn met their high standards, they had no choice but to
Module Six Assignment: Global Supply Chain Case Study
increase their prices, which caused Apple to find alternate suppliers, entering the business model
is Pegatron.
Closing Apple production in the U.S. was also an unfavorable change in business. The lost job
opportunities in production were made up in areas like research and design. Moving all their
production overseas reduced operation costs, increasing profitability. Employee treatment is an
important part to having a successful business. Socially responsible companies attract the best
employees who have a greater interest in the company aside from earning a paycheck.
Employees who work for companies who are striving to make a difference have an improved
morale in the workplace, and as a result are more productive. In addition to morale and
productivity, another benefit to social responsibility is the brand image which is positively
reflected in the bottom line. The media today has a great deal of influence on societies opinion.
There are other technology conglomerates that did not experience the same scrutiny as Apple.
While the labor violations could have really damaged the Apple brand, they took the high
road and made positive, sustainable changes. In turn, this made a positive impact on the brand
and what they stand for. While it is impossible for a company to manage a suppliers business
practice it is important for a multinational firm to follow up with suppliers to ensure they are
following the laws as outlined by the governing country. Apple is not the first company to
undergo accusations of poor business practices, but their response to the accusations is what
makes them stand apart from others. Apple moved their production out of the United States
because they needed a skill set that was no longer available. Moving operations to China allowed
Apple to utilize workers with the skills they needed at a much lower operating cost.
Outsourcing creates a communication and quality barrier because you are giving up
control when you move production elsewhere. When Apple made the decision to move
Module Six Assignment: Global Supply Chain Case Study
production offshore it was their responsibility to ensure that their suppliers were following the
law, specifically the labor laws. If Apple had kept in closer contact with the suppliers, they may
have noticed that they were violating laws through general communications. According to Wired,
Apple is featured in 15.1 percent of tech news coverage which is more than any other company.
The reason being that the company delivers on their promises. In doing so they are putting
themselves in a position to be scrutinized. It is imperative that they heavily monitor all aspects of
their business model to prevent negative press.
Module Six Assignment: Global Supply Chain Case Study
References:
Murphy, C. B. (2024, January 27). Why is social responsibility important to some businesses?.
Investopedia. https://www.investopedia.com/ask/answers/041015/why-social-responsibility-
important-business.asp
Patel, D. (2021, December 10). The Pros and cons of outsourcing. Forbes.
https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-and-the-
effect-on-company-culture/