for prof Frank only

Introduction

Our group plans to explain and show the different corporate and social responsibilities when dealing with outsourcing production to minimise labour costs and the ramification of breaking these responsibilities. We will be covering the major impact that outsourcing has and the implications that is put on these companies as a result. The biggest impact on a community is job loss, by taking manufacturing and moving it to a different country you are taking a job away from someone in your country and locally that may affect their opinion of your product. People are also expecting that even though a product is being made in a different location they still expect it to be of the same quality and somewhat cheaper due to the different working costs.  This along with the examples of people who didn’t abide by their social responsibility and the consequences will be listed in this project. these examples include but are not limited to, Nike, Apple, Foxconn, and various clothing companies. These infringements can be anything from deaths at the workplace to child labour and we hope to explain these different situation in detail in different sections of our report. We currently have 3 sections chosen and some statistics and facts ready to show our message.

Foxconn suicides

In 2010, 18 employees making iPhone and iPads at the Foxconn factory in China attempted suicide. Much was made of this in the media at the time. These shocking events focused world attention on the manufacturing supply chains of China’s export industry and the experience of working within them. Among the most prominent firms in the global supply chain that operates in China is Foxconn, the Taiwanese-owned multinational electronics contract supplier. Foxconn is the trading name for Hon Hai Precision Industry Company and, with a workforce of 1.4 million, it is the largest private sector company in China and one of the world's largest employers (iSuppli, BBC, 20 March 2012). Foxconn's rise to become the leading global electronics manufacturer has been hailed as a success of China's export-oriented industry. However, Yu's lived experience illustrates how the company's obsession with production goals, business growth and profits frequently results in the sacrifice of the basic human needs of its workers. According to other Research by Chan, "Foxconn's operating margins have declined steadily over the past six years, from 3.7 percent in the first quarter of 2007 to a mere 1.5 percent in the third quarter of 2012, even as total revenues rose in the same period with the expansion of orders. By contrast, Apple's operating margins peaked at 39.3 percent in early 2012 from initial levels of 18.7 percent in 2007."

Nike’s Negative Publicity

Nike is one of the most well known examples of outsourcing and the negative effects that can be tied to it. One of their outsourcing locations is Bangladesh, which was named the 4th top clothing export in the world in 2012 (Banjo, 2014). On April 24, 2013 a building in the Rana Plaza located in the district of Dhaka collapsed, resulting in 1,100 casualties. This building collapse was “the worst industrial disaster in Bangladesh's history” (Banjo, 2014). This issue is essentially saying that cost controlling vs. safety conditions is often unbalanced, and the unbalance can have serious repercussions. This is not the only problem Nike has faced in relation to outsource, as the ethical issue of sweatshop work has given the company a lot of negative publicity. Supply Chain Digest summarizes that “The Nike story is illustrative of just how tough such global sourcing decisions can be, especially in the apparel sector” (2014).

HP