Apple’s Supplier Code of Conduct and Foxconn’s Chinese Factories

MBA 520- Ethics & Leadership in a Global Environment

09192015

Abstract
Corporate citizenship is a very important topic within the global business environment today. Consumers have much more hands on access to company data and can question the actions of corporations much easier than before. The access to the Internet and forms of social media has been some of the reason that corporation’s feet are being held to the fire. They cannot get away with social irresponsibility.
In 2012, Apple was the largest publicly traded company in the world (Lawrence & Weber, pg. 156). They are a company that is always in the limelight. The way they operate and the decisions they make that effect the environment and their consumers does not go unnoticed. Apple has had issues with their manufacturing suppliers. They have had to make many hard decisions to be sure their products were being made in safe and healthy working environments. This has lead to many supplier issues, because it seems as though Apple takes corporate citizenship much more seriously. As we look into this issue further we see that Apple not only wants to be seen as strong corporate citizens, but they will hold any business associated with them to the same standards.

Introduction

Corporate citizenship is a topic among businesses large and small. The affect corporations have on employees, consumers and our financial and global environment has shaped the way these businesses operate. Companies are held to higher standards whether they like it or not. They are forced to be more transparent than they have ever been before. Some corporations embrace it and choose to make it their own, while others are more reluctant to be transparent. Being a corporate global leader, Apple has been faced with opportunities to show themselves to be corporate citizenship leaders. Over the years, they have had opportunities to turn a blind eye to how their suppliers were manufacturing their products, but they didn’t. They chose to be transparent about what they thought was acceptable in business and fired 11 of their suppliers. They were holding their suppliers accountable just as others in the community hold Apple accountable. Apple chose to partner with the Fair Labor Association to run an audit on labor conditions of their supplier Foxconn. The findings were subpar to say the least. The violations that they encountered were detrimental to the supplier code of conduct. These findings allowed Apple to hold Foxconn accountable for their actions and pushed them in making these issues right again.
1. Do you think Apple has demonstrated global corporate citizenship, as defined in this chapter? Why or why not? Being a global corporate citizen is not just showing social and environmental responsibility locally, but it is the act of showing responsibility globally (Lawrence & Weber, pg. 138). Apple made a conscious effort to have this audit done at Foxconn in China. There were probably plenty of opportunities for Apple to turn a blind eye and focus on generating more revenue and reveling in their successes. They didn’t do that though, they showed a strong commitment to the effects their business was having on others globally. They took a step up to address many concerns for the employees who were underpaid and working week after week to make their products a success. By stepping into a situation that could have caused them to find yet another supplier, they knew it was the right thing to do. I believe that this was proof enough to show that they are strong global corporate citizens.
2. In its response to problems in its contractor factories, do you think Apple moved through the stages of corporate citizenship presented in this chapter, or not? Why do you think so?
I do believe that over time Apple has gone through each of these stages of corporate citizenship. During the 90’s Apple seemed to be in the elementary stage of corporate citizenship. It seemed to be quite undeveloped, but as a few years went by they started the second stage, the engage stage of global corporate citizenship. They started becoming aware of the public expectations and began to adopt their own codes and standards to follow. During the, should we say supplier crisis, Apple adopted the Innovative stage and the Integrated Stage. They began to see that they needed to implement codes of conduct to help hold their suppliers accountable. Apple ran their own investigations into some of their previous suppliers, which showed they were not following the codes of conduct they had put in place. They were getting pressure publically due to the change.org petition that was launched. They knew they needed to partner with someone to help carry out these safe working environment initiatives. Just a week later they had announced that they had joined the Fair Labor Association (Lawrence & Weber, pg. 157). This led them to completing the final Transforming stage. By joining the FLA they were showing the public how serious they were about global corporate citizenship. Due to the findings after the FLA completed their audit, Apple could hold them accountable to the lack of obedience to the codes of conduct that had been put in place. Globally, this was a positive fix to what could have been even more devastating for Apple and the Foxconn employees.
3. What are the advantages and disadvantages to Apple of using its own company-specific supplier code of conduct, rather than a global code, such as those discussed in this chapter? If apple uses its own company-specific supplier code of conduct that is the advantage right there, it is company specific. I believe that every company should have company specific codes of conduct. They are more specific to the individual company and create more pin-point codes to help hold everyone accountable. It is also beneficial to adopt global codes as well, because those can be all encompassing for the industry. One example the book gave was the Electronics Industry Citizenship Coalition Code of Conduct (Lawrence and Weber, pg 147).
4. What are the advantages and disadvantages to Apple of using an independent third party auditor, rather than rely solely on its own internal audits?

This topic goes back to accountability. Apple could have continued to do their own audits, but when you bring in a third party you are opening yourself up to be completely transparent to the public eye. This could pose to be very good or very bad, depending on how the public portrays it in the media. For apple, having a third party was very good. They were getting pressure from the public with the change.org campaign and I believe did the right thing by including the FLA. The positives of having a third party can be seen as an extra set of eyes. Nothing should be missed if you have multiple people auditing a situation for you. The negative could be what they find and they did find quite a few negative things, which forced Apple to make some choices. Apple chose the right thing, but holding Foxconn accountable to what they found. Joining together with FLA made the findings of the audit more credible and reliable.

References
Lawrence, A. T., & Weber, J. (2014). Business and society: stakeholders, ethics, public policy (14th ed.). New York: McGraw-Hill Higher.