Background of Apple Inc. and Foxconn

Use an organisation that is or has been in the news during the past two years (work-related learning) and identify an ethical dilemma faced by that organisation as an example. Apply at least two theoretical concepts from managerial ethics to examine this dilemma critically.

Ethical dilemmas are defined as confusing situations in which ethical principles of a person are applied. The ethical dilemmas are often occurred due to complicated situations or disagreements between people based on moral perspectives. In certain situations, the confusing circumstances occur in a professional sense in which people are unable to decide the correct and moral course of action. Due to conflicting ideologies of people, the ethical dilemmas are creating in a professional setting. The ethical dilemmas can occur at any place or anytime, but they are often witnessed in workplaces globally. In today’s competitive world, the corporations are facing various ethical diversity issues which increase the incidences of ethical dilemmas. This essay will focus on analysing the role of ethical leadership and decision-making during the situations of ethical dilemmas. The essay will take the example of Apple Incorporation which is an American multinational company that provides its services worldwide. In past two years, Apple has been in the news because the company is facing ethical dilemmas relating to Foxconn. The essay will analyse two ethical theories that can be implemented by the management of Apple Incorporation to address the issues of ethical dilemmas. Further, the essay will provide various recommendations that can assist the management of Apple in making ethical decisions.

Apple Incorporation is an American multinational corporation that was founded in 1976; the head office of the firm is situated in Cupertino, California. The company operates in computer hardware, software, digital distribution and consumer electronics industry. Currently, Apple market value stood at US$900 billion, and it is one of the most valued companies in the world (Shen, 2017). The corporation is known for offering highly innovative products to its customers. The firm was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne as an electronics company. The products offered by the company include iPhone, iPad, iPod, iMac, MacBook Pro, Apple TV and many others. The corporation invests heavily in order to make environment-friendly products; the company avoids using harmful elements such as lead or mercury while manufacturing its products. The firm is committed to reducing its carbon footprint, and they do it by using 100 percent of renewable energy to power its data centres and 96 percent of its facilities worldwide (Apple, 2018). The organisation provides a positive working environment to its employees that promote diversity in the workplace. In order to reduce its manufacturing costs, Apple outsources its production operation to China. Foxconn provides the facility of assessing consumer electronic products to a large number of major vendors including Apple (Webb, 2017).

Ethical Dilemmas at Foxconn

In past few years, Apple has been in the news due to concerning working condition at factories that are owned by Foxconn. Many news stories have provided that the workers in Foxconn owned factories are working in hazardous situations. The company is facing ethical dilemmas because its products have a considerably high demand in the market and to fulfil such demand factories have to work in extensive hours (Sin, 2016). The employees work continuously in unhealthy situations to meet the demand of customers. The firm is one of the largest organisations in the world in terms of profits yet still it has failed to address the issue of its employees in Foxconn. Recently, due to increasing demand of iPhones, a large number of Foxconn employees threaten to engage in mass suicide. The CEO of Apple, Tim Cook, is facing serious ethical dilemma because of negative working conditions of Foxconn employees (Oster, 2016). Apple is a multinational firm and decisions of company’s management has a global impact; the company invest heavily in environment-friendly operations and employees’ diversity still it has failed to address the issue of Foxconn employees. According to Fortune, Apple is worth more than US$900 billion which prove that corporation has a remarkable success in the smartphone and computer market (Shen, 2017). However, the threat of mass suicide made by Foxconn employees proves that Apple has failed to make an ethical decision when it comes to its workers’ rights in China.

As per an article in ‘The Guardian’ posted in June 2017, the working condition of employees at Foxconn is considerably bad, and there are threats of mass suicide made by employees (Merchant, 2017). On 6^th January 2018, a factory worker of Foxconn committed suicide by jumping from the window of iPhone manufacturing factory (Fullerton, 2018). This incident adds to the countless times when employees of Foxconn committed suicide because of the negative working environment and long working shifts. As per Apple, the company has taken few initiatives to tackle the issue of suicide and improving the working condition at Foxconn. For example, the corporation installed hanging nets in the factory premises to prevent people from jumping off the building (Smith, 2016). Although, as per recent incident, it is a proof that the initiatives of the company have failed substantially and the condition of workers in Foxconn is still bad. With the new launch of iPhones, iMac, MacBook, and other Apple products each year, Foxconn has to increase the working hours of employees in order to meet the demand of the company.

Ethical Theories for Addressing Ethical Dilemmas

The management of Apple Incorporation can implement ethical theories to address the issues of Foxconn and improve the working condition of factory workers. The two main fundamental ethical theories that can be implemented by the firm include Teleological and Deontological. Both these theories can assist Apple in making the right and ethical decision in the situation and assist its management in implementing policies in order to improve the working condition of Foxconn workers (Yoon, 2011). The Teleological approach is an ethical concept that focuses on seeking a “telos” while taking a decision. Telos is a Greek word which means “goal” or “end”. This means that the approach is focused on how decisions and choices affect a particular desired moral outcome. There are two main teleological moral theories which include utilitarianism/consequentialism and the virtue ethics that was adopted by ancient philosophers (Broad, 2014). Both of these theories are part of “traditional ethical theories” which are based on consequentialists and non-consequentialists. Utilitarianism approach is widely popular in business and public policy context. The main concept of Utilitarianism provides that organisations should make ethical choices to provide great benefits to a great number of people (McGee, 2010). “Ends justify the means” is the key concept of this theory, for example, one person can be killed to save the lives of five people.

The Deontology ethics theory focuses on the wrongness or rightness of the activities themselves as opposed to right or wrong consequences of such activities. In other words, the theory focuses on doing the right thing irrespective of the rightness or wrongness of consequences (Gotsis & Kortezi, 2010). As discussed above, Apple has made various contributions to the environmental protection and employees diversity issues which resulted in providing a better working environment to employees and good quality products to its customers, however, the firm has failed to take ethical actions regarding its employees in Foxconn. Tim Cook takes all the appropriate actions to increase company’s profitability, but as a result, the corporation faces serious ethical dilemmas. As per Utilitarianism approach, the unethical behaviour of Foxconn employees can be justified because it results in providing innovative and advances products to customers that assist in changing and developing the world (Renouard, 2011). But, on the other hand, the company can invest in improving the working condition of Foxconn factories and reduce working hours which may result in lowering the production, but it is ethical for the workers of Foxconn.

Teleological Approach

Ethical leadership and decision-making are connected in Apple Incorporation because company’s decisions directly influence the ethical dilemma faced by the firm. Apple has taken various initiatives to address the issue of child labour, suicide and excessive working hours in order to provide a safe working environment to employees (Xu & Li, 2013). However, due to recent media attention, the company is worried about negative publicity. Apple has a positive brand image because it manufactures its products with recyclable and environment-friendly materials. In case of bad publicity, customers might boycott Apple’s products because of the ethical dilemma at Foxconn which may cause huge loss to the company. Apple uses Asian labour because they are considerably cheaper and outsourcing its manufacturing facilities to China result in lowering the overall cost of Apple (Hoejmose & Adrien-Kirby, 2012). By investing in environment-friendly products and taking initiatives for employees’ diversity, Apple has adopted Utilitarianism approach since it focuses on future benefits. The Utilitarianism approach enables Apple’s management to focus on greater development of the society, but this approach has failed to address the ethical dilemma faced by the firm currently. The management of Apple can implement a Deontological approach to address this ethical dilemma.

The actions of Apple Incorporation are based on effective performance of its workers; therefore, the CEO should take appropriate actions to improve their working conditions and health. Else, the corporation can face serious issues regarding negative publicity which might result in reducing the profits of the enterprise. High rate of suicide rates also increases employee attrition rates which result in reducing the number of factory workers. Low job satisfaction also hinders the performance and productivity of employees which negatively affects product quality (Finkelman & Lopez, 2012). Customers prefer to buy Apple products since they manufacture their products ethically but the incidents at Foxconn can reduce company’s reputation. Apple is a multinational corporation; therefore, its actions are always in the spotlight of media which increases the chances of bad publicity. Lack of ethical decision can frustrate customers, and they can boycott company’s products (Lucas, Kang & Li, 2013). On the other hand, Apple’s competitor companies such as Google and Microsoft are focusing on maintaining a positive brand image by taking ethical actions. Therefore, Apple is requiring addressing this ethical dilemma by taking appropriate actions to maintain its competitive advantage in the industry.

The corporation can implement the principles of Deontology ethics theory in the decision-making process to ensure that it establishes ethical leadership. Foxconn treats its employees like “machines” and did not implement appropriate policies for their safety and health requirements. Northouse (2015) provided that without strong leadership, the policies implemented by an organisation may not be appropriate and for the entire business. Foxconn leadership style incorporates the policies of a dictator rather than an ethical leader. Foxconn is required to adopt a post bureaucracy approach which incorporate shared responsibilities for the employees and increase trust between managers and employees. The management of Apple can assist in implementing this leadership approach in Foxconn (Greenwood, 2013). Apple is the biggest client of Foxconn, and it has significant power over its operations. The decision taken by the enterprise can have a significant impact on working condition of Foxconn employees, and it can assist in improving their situation. The decision of Apple has a direct impact on ethical actions of Foxconn which prove how decision-making and ethical leadership are connected with each other.

Deontological Ethics Theory

The Deontology ethics theory provides that corporations should take ethical actions irrespective of its consequences. The management of Apple can implement these policies to address the ethical dilemma at Foxconn (Place, 2010). The decisions of Apple have a direct impact on Foxconn policies and corporation can take appropriate actions to address the issue faced by employees. Instead of focusing on future consequences, the company should analyse the current situation and implement policies to address the ethical dilemmas. The leadership has a direct influence on ethical actions of an enterprise. The manager takes appropriate actions and implements organisational policies to ensure that operations of the enterprise are ethical. During the decision-making process, managers have to evaluate the issues clearly and implement appropriate policies to ensure that they deal with the issue ethically. The management of Apple can implement similar policies to face the ethical dilemma. The decisions taken by the management of Apple directly influence the condition of Foxconn workers. For example, if Apple decided to increase the sales of new iPhones, the factory workers are required to work in extra shifts and overnight to meet the demand for new products. The consumer electronic products offer by Apple include some harmful chemical that negative affects workers health and appropriate security precautions are necessary to be taken by the company to maintain the security and health of their employees (Schwartz, 2016).

The growing suicide rate is an indication that employees at Foxconn are facing serious issues that are necessary to be resolved by the enterprise. The decision taken by the management of Apple directly influences the working condition of Foxconn employees. The link between employees’ condition and managerial decision prove that there is a direct link between ethics, leadership and decision-making (Jennings, 2014). Effective leadership approach assists management in considering ethical policies in the decision-making process. Tim Cook can implement similar policies to address the ethical dilemma facing by the corporation. For example, recently the corporation started taking initiatives to manufacturing its products in California which increases the overall cost of production, but it also assists the company in controlling different parts of the manufacturing process and makes them more environment-friendly (Craft, 2013). The corporation is requiring implementing the principle of Deontology ethics theory to forget about the consequence in order to address the ethical dilemma. The company might have to decide on reducing the production of its products to ensure that workers in Foxconn are not facing hazardous working condition. The corporation can adopt effective leadership approach to implement ethical policies in its decision-making process which can assist the firm in facing an ethical dilemma.

Ethical Leadership and Decision-making at Apple Inc.

Following are various recommendations that can be implemented by Apple Incorporation to ensure that it takes ethical decision for addressing the ethical dilemma faced by the enterprise and also positively influencing their brand reputation. Tim Cook should immediately implement policies to improve the working conditions of Foxconn employees. Firstly, the company should ensure that workers are not treated like machines by the supervisors of Foxconn. The employees should be treated appropriately, and they should have employment rights. The workers should have a fix time period for shifts, and it should not be more than 8-9 hours (Clarke & Boersma, 2017). For extra one or two hours, workers should be paid double money, and it should be their choice whether they want to do overtime or not. The management of Apple should consider the capacity of the workforce before placing the manufacturing order in Foxconn. The corporation should also implement policies for the safety of the employees. The workers who deal with hazardous material in production process should be given appropriate safety equipment by the company to ensure that they are protected. Most of the Foxconn employees live near the factory location in the rooms provided by the company. The living facility of workers is substantially bad, and they lack appropriate facilities relating to electricity, water, and food. The corporation also puts restrictions on employees to visit outside the factory premises because they might leak secrets of company’s products (Tian & Slocum, 2016).

Apple should ensure that employees are given appropriate rights, and restriction of visiting should be cancelled. The workers should be given better living accommodation with facilities to basic necessities such as food, water, and electricity. To address the issue of mass suicide, Apple should send some of its senior management to analyse the situation at Foxconn and provide a report on the issue. Apple should take ethical decisions based on such report to ensure that the enterprise addresses each part of the ethical dilemma. The suicides rate can be reduced if employees are given appropriate accommodation and healthy working environment (Ford & Richardson, 2013). The management of Foxconn should communicate with employees to understand their issues and implement policies to address such problems. As per Teleological ethics approach, the enterprise should implement personal development policies for employees which assist in their future development. Ethical leadership approach of Apple can assist Foxconn in establishing a suitable and healthy working environment (Woiceshyn, 2011). Apple is one of the most profitable enterprises in the world, and it can invest in providing better facilities and salary packages for workers of Foxconn. The reducing in working hours might decrease the number of products offer by Apple, but customers will prefer to purchase ethical products rather than unethical products. Therefore, these policies can be implemented by the enterprise to address the ethical dilemmas which will assist the corporation in increasing its brand image and relationship with employees.

Recommendations for Addressing Ethical Dilemmas at Apple Inc.

Conclusion

From the above observations, it can be concluded that Apple is one of the biggest and ethically driven corporations globally, but still, the company is facing ethical dilemmas due to its manufacturing process which is outsourced to Chinese factory Foxconn. The employees working at Foxconn are facing issues regarding negative working conditions and overtime shifts because the demand of Apple’s products is continuously growing and to address such demand, Foxconn forces its employees to work in long shifts. The enterprise also faces multiple threats of mass suicide by the workers of Foxconn. As per news in past two years, many employees have committed suicide because of the negative working conditions in Foxconn and Apple has failed to address these issues. The suicide of employees creates a significant ethical dilemma in the corporation which negatively affects its brand image. The corporation can implement two traditional theories of ethics to address the ethical dilemma which include Teleological and Deontological. The Deontological ethics theory provide that Apple’s management should focus on implementing current policies to address the ethical dilemma such as improving working conditions, providing better salary and accommodations, establishing communication channels, and reducing overall work pressure. As per Teleological approach, the firm should implement programs for personal development of employees to increase their future growth. These ethical leadership approaches and decisions can assist Apple in addressing the ethical dilemma which will assist in increasing their brand image and market reputation

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