'"Dr. Reborn only"'

34 P

Executives want to improve working conditions within the factories of subcontractors such as Foxconn, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products.74

Case Discussion Questions

2. In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here?

3. What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple deal with these?

4. On balance, do you think that the kind of outsourcing undertaken by Apple is a good thing or a bad thing for the American economy? Explain your reasoning?

16. J. Bhagwati, Protectionism (Cambridge, MA: MIT Press, 1989). 17. F. Williams, “Trade Round Like This May Never Be Seen Again,”

Financial Times, April 15, 1994, p. 8. 18 W. Vieth, “Major Concessions Lead to Success for WTO Talks,” Los

Angeles Times, November 14, 2001, p. A1; and “Seeds Sown for

Future Growth,” The Economist, November 17, 2001, pp. 65–66. 19. Ibid.

20. World Trade Organization Press release, “Trade to Remain Subdued in 2013 after Sluggish Growth in 2012 as European Economies Continue to Struggle,” April 10, 2013; World Trade Organization, International Trade Statistics 2012 (Geneva: WTO 2012).

21. United Nations Conference on Trade and Investment, “Global FDI Recovery Derails,” Global Investment Trends Monitor, January 23, 2013.

22. United Nations, World Investment Report, 2012 (New York and Geneva: United Nations, 2012).

23. Moore’s law is named after Intel founder Gordon Moore. 24. Data compiled from various sources and listed at www.internet-

worldstats.com/stats.htm. 25. From www.census.gov/mrts/www/ecomm.html. See also

S. Fiegerman, “Ecommerce Is Now a Trillion Dollar Industry,”

Mashable Business, February 5, 2013. 26. For a counterpoint, see “Geography and the Net: Putting It in Its

Place,” The Economist, August 11, 2001, pp. 18–20. 27. Frankel, “Globalization of the Economy.” 28. Data from Bureau of Transportation Statistics, 2001. 29. Fernald and Greenfield, “The Fall and Rise of the Global

Economy.” 30. Data located at www.bts.gov/publications/us_international_

trade_and_freight_transportation_trends/2003/index.html. 31. “America’s Pain, India’s Gain: Outsourcing,” The Economist, January 11, 2003, p. 59; “The World Is Our Oyster,” The Economist, October 7, 2006, pp. 9–10; “IBM and Globalization: Hungry Tiger, Dancing Elephant,” The Economist, April 7, 2007, pp. 67–69; P. Mishra, “New Billing Model May Hit India’s Software Exports,” Live Mint, February 14, 2013; and “India’s Outsourcing

Business: On the Turn,” The Economist, January 19, 2013. 32. N. Hood and J. Young, The Economics of the Multinational

Enterprise (New York: Longman, 1973). 33. United Nations, World Investment Report, 2012. 34. Ibid.

1.

What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential costs and risks to Apple?

Endnotes

1. G. Thompson, “Behind Roses’ Beauty, Poor and Ill Workers,” The New York Times, February 13, 2003, pp. A1, A27; V. Marino, “By Any Other Name, It’s Usually a Rosa,” The New York Times, May 11, 2003, p. A9; “The Search for Roses without Thorns,” The Economist, February 18, 2006, p. 38; L. Kwoh, “Rose Growing Industry Wilts in U.S. as South America’s Blossoms,” The Star Ledger, February 6, 2011; and R. Nevado and J. Nevado, “When a Rose Is more than Just a Rose,” The Washington Post, November 11, 2002.

2. Figures from World Trade Organization, Statistics Database, 2013. 3. Thomas L. Friedman, The World Is Flat (New York: Farrar,

Straus and Giroux, 2005). 4. Ibid.

5. T. Levitt, “The Globalization of Markets,” Harvard Business Review, May–June 1983, pp. 92–102.

6. U.S. Department of Commerce, Internal Trade Administration, “U.S. Export Fact Sheet,” May 10, 2012.

7. C. M. Draffen, “Going Global: Export Market Proves Profitable for Region’s Small Businesses,” Newsday, March 19, 2001, p. C18. 8. B. Benoit and R. Milne, “Germany’s Best Kept Secret, How Its Ex- porters Are Betting the World,” Financial Times, May 19, 2006, p. 11. 9. See F. T. Knickerbocker, Oligopolistic Reaction and Multina- tional Enterprise (Boston: Harvard Business School Press, 1973); and R. E. Caves, “Japanese Investment in the U.S.: Lessons for the Economic Analysis of Foreign Investment,” The World

Economy 16 (1993), pp. 279–300. 10. I. Metthee, “Playing a Large Part,” Seattle Post-Intelligencer,

April 9, 1994, p. 13. 11. “Operating Profit,” The Economist, August 16, 2008, pp. 74–76. 12. R. B. Reich, The Work of Nations (New York: A. A. Knopf, 1991). 13. D. J. Lynch, “Flat Panel TVs Display Effects of Globalization,”

USA Today, May 8, 2007, pp. 1B, 2B; P. Engardio and E. Woyke, “Flat Panels, Thin Margins,” BusinessWeek, February 26, 2007, p. 50; B. Womack, “Flat TV Seller Vizio Hits $600 Million in Sales, Growing,” Orange County Business Journal, September 4, 2007, pp. 1, 64; E. Taub, “Vizio’s Flat Panel Display Sales Are Anything but Flat,” The New York Times Online, May 12, 2009; and Greg Tarr, “HIS: Samsung Dusts Vizio in Q4 LCD TV Share in the U.S.,” This Week in Consumer Electronics, April 12, 2012, p. 12.

14. United Nations, “The UN in Brief,” www.un.org/Overview/brief. html.

15. J. A. Frankel, “Globalization of the Economy,” National Bureau of Economic Research, working paper no. 7858, 2000.

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