ethics case study apple inc

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The FBI & Apple Security vs. Privacy

How can tech companies and government organizations strike a balance between maintaining national security and protecting user privacy?

In December 2015, the FBI attained the iPhone of one of the shooters in an ISIS-inspired terrorist attack that killed 14 people in San Bernardino, California. As part of the investigation, the FBI attempted to gain access to the data stored on the phone but was unable to penetrate its encryption software. Lawyers for the Obama administration approached Apple for assistance with unlocking the device, but negotiations soon broke down. The Justice Department then obtained a court order compelling Apple to help the FBI unlock the phone. Apple CEO, Timothy Cook, publicly challenged the court in an open letter, sparking an intense debate over the balance between maintaining national security and protecting user privacy.

Apple and its supporters, including top technology companies such as Google and Facebook, made the case on several fronts that the court order threatened the privacy of all individuals. First, according to Apple, the order effectively required the company to write code, violating its First Amendment right to free speech by forcing the company to “say” something it did not want to say. Previous court cases had already established computer code as legally protected speech. Second, such a backdoor, once created, could fall into the wrong hands and threaten the privacy of all iPhone owners. Finally, it would set a dangerous precedent; law enforcement could repeatedly require businesses such as Apple to assist in criminal investigations, effectively making technology companies an agent of government.

Representatives from both sides of the political aisle offered several arguments in favor of the Justice Department’s efforts and against Apple’s stance. Their central claim was that the U.S. legal system establishes constraints on the government’s access to private information which prevent abuse of search and surveillance powers. At the same time, the law still allows authorities to gain access to information that facilitates prevention and prosecution of criminal activities, from terrorism to drug trafficking to child pornography. Critics of Apple also rejected the slippery slope argument on the grounds that, if Apple cooperated, it could safeguard the code it created and keep it out of the hands of others, including bad actors such as terrorists or criminal groups. Moreover, Apple was accused of being too interested in protecting its brand, and even unpatriotic for refusing to comply with the court order.

Ultimately, the FBI dropped the case because it was able to circumvent the encryption on the iPhone without Apple’s help.

Discussion Questions

1. What harms are potentially produced by the FBI’s demand that Apple help it open an iPhone? What harms are potentially produced by Apple’s refusal to help the FBI?

2. Do you think Apple had a moral obligation to help the FBI open the iPhone in this case because it involved terrorism and a mass shooting? What if the case involved a different type of criminal activity instead, such as drug trafficking? Explain your reasoning.

3. Apple argued that helping to open one iPhone would produce code that could be used to make private information on all iPhones vulnerable, not only to the American government but also to other foreign governments and criminal elements. Do you agree with Apple’s “slippery slope” argument? Does avoiding these harms provide adequate justification for Apple’s refusal to open the phone, even if it could reveal crucial information on the terrorist shooting?

4. Politicians from across the political spectrum, including President Obama and Senator Ted Cruz, argued that technology preventing government access to information should not exist. Do you agree with this limit on personal privacy? Why or why not?

5. Ultimately, the FBI gained access to the iPhone in question without the help of Apple. Does this development change your assessment of the ethical dimensions of Apple’s refusal to help the FBI? Why or why not? Should the FBI share information on how it opened the iPhone with Apple so that it can patch the vulnerability? Explain your reasoning.

Related Videos

Incrementalism

Referred to as the slippery slope, incrementalism describes how we unconsciously lower our ethical standards over time through small changes in behavior.

Bibliography

Apple Fights Order to Unlock San Bernardino Gunman’s iPhone http://www.nytimes.com/2016/02/18/technology/apple-timothy-cook-fbi-san-bernardino.html

How they line up on Apple vs. the FBI https://www.washingtonpost.com/graphics/business/fbi-apple/

Why Apple Is Right to Challenge an Order to Help the F.B.I. http://www.nytimes.com/2016/02/19/opinion/why-apple-is-right-to-challenge-an-order-to-help-the-fbi.html

Apple’s Rotten Core: CEO Tim Cook’s Case for Not Aiding the FBI’s Antiterror Effort Looks Worse than Ever http://www.wsj.com/articles/apples-rotten-core-1456696736

Obama, at South by Southwest, Calls for Law Enforcement Access in Encryption Fight http://www.nytimes.com/2016/03/12/us/politics/obama-heads-to-south-by-southwest-festival-to-talk-about-technology.html

U.S. Says It Has Unlocked iPhone Without Apple http://www.nytimes.com/2016/03/29/technology/apple-iphone-fbi-justice-department-case.html

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Building a "Backdoor" to the iPhone: An Ethical Dilemma

By: Tulsi Jayakumar, Surya Tahora

In February 2016, Tim Cook, Apple's chief executive officer, challenged a U.S. Federal Court order for Apple to assist the Federal Bureau of Investigation (FBI) in a case involving suspected…

• Length: 10 page(s)
• Publication Date: Apr 28, 2016
• Discipline: Business Ethics
• Product #: W16245-PDF-ENG

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In February 2016, Tim Cook, Apple's chief executive officer, challenged a U.S. Federal Court order for Apple to assist the Federal Bureau of Investigation (FBI) in a case involving suspected international terrorism. The government wanted Apple to provide the FBI with access to encrypted data on an Apple product, the iPhone. Cook's refusal to acquiesce to the government's demands drew strong public debate, pitting the proponents of national security against those in favour of customers' digital privacy and security. The case invoked an ethical dilemma faced by management in issues involving right-versus-right decisions. Which right should Cook choose? What are the ethical dilemmas involved in making this decision? How should Cook resolve the dilemma?

Tulsi Jayakumar is affiliated with SP Jain Institute of Management & Research.

Learning Objectives

This case can be taught in a 90-minute session of a business ethics course in a postgraduate or executive MBA program. It may also be used in an information management course to teach a module on ethics in information management, focusing on the moral and ethical dimensions of information handling and use, including gatekeeping. The case will help students to: -Distinguish between various kinds of executive management decisions: right-versus-wrong compared to right-versus-right. -Recognize and understand the moral dilemmas facing management involving right-versus-right decisions or "the-dirty hands problem." -Understand the frameworks used in developing practical approaches to resolving these dilemmas.

Apr 28, 2016 (Revised: Aug 16, 2017)

Discipline:

Business Ethics

Ivey Publishing

W16245-PDF-ENG

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Batterygate: An Ethical Analysis of Apple's Infamous Multimillion Dollar Mistake

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How Apple Is Organized for Innovation

• Joel M. Podolny
• Morten T. Hansen

When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments.

It’s about experts leading experts.

Idea in Brief

The challenge.

Major companies competing in many industries struggle to stay abreast of rapidly changing technologies.

One Major Cause

They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.

The Apple Model

The company is organized around functions, and expertise aligns with decision rights. Leaders are cross-functionally collaborative and deeply knowledgeable about details.

Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to 137,000 employees and $260 billion in revenue in 2019. Much less well-known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success.

• Joel M. Podolny is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.
• MH Morten T. Hansen is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and coauthor of Great by Choice . He was named one of the top management thinkers in the world by the Thinkers50 in 2019. MortentHansen

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Apple Inc. in 2020

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About The Author

David B. Yoffie

Related work.

• December 2020
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Apple Inc. in 2020 – Select Market Data

• Apple Inc. in 2020  By: David B. Yoffie
• Apple Inc. in 2020 – Select Market Data  By: David B. Yoffie

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Apple Inc. Ethical Dilemma: A Case Study Example

Ethical dilemmas present individuals with an unique opportunity to exercise rationality, impartiality, objectivity and ethics. Business managers and employees are constantly faced with ethical dilemmas. Choosing the right course of action is critical not only to the success of the business but also in showcasing one’s moral and ethical stance. A sample case study of an ethical dilemma is presented herein, and the best course of action in light of various ethical principles and theories.

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ABSTRACT. There have been many attempts during the history of applied ethics that have tried to develop a theory of moral reasoning. The goal of this paper is to explicate one aspect of the debate between various attempts of offering a specific method for resolving moral dilemmas. We contrast two kinds of deliberative methods: deliberative methods whose goal is decision-making and deliberative methods that are aimed at gaining edifying perspectives. The decision-making methods assessed include the traditional moral theories like utilitarianism and Kantianism, as well as second order principles, such as principlism and specified principlism. In light of this assessment, we suggest taking a closer look at two perceptive models, casuistry and particularism. These models are used for dealing with moral dilemmas that provide for edifying perspectives rather than decision-making. These perceptive models, though less scientific and not as good at prescribing an action, are more human in the sense that they enrich our moral sensibilities and enhance our understanding of the meaning of the situation.

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This essay explores the ethical dimensions of Apple's corporate conduct through the lenses of Christian morality, scriptural guidance, and industry competition. Drawing insights from academic perspectives by Ferrell et al. (2022), Ruddell (2014), and Syed Abdul Bukhari's analysis (2021), the study examines how Apple aligns its organizational philosophy with biblical principles, handles ethical challenges guided by Christian morality, and navigates industry competition within a Christian worldview. The analysis reveals that Apple's commitment to transparency, justice, and stakeholder ethics resonates with Christian values, as evidenced by its supply chain transparency, user privacy initiatives, and collaboration with industry peers. The essay underscores the importance of aligning corporate conduct with Christian principles and scriptural guidance to foster ethical decision-making in the dynamic business environment.

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The moral nature of corporations has been discussed for a long time. But, since 2001, with enormous economic effects of the misconduct of some corporations this discussion gained another dimension, it moved into the public sphere, the subject became more sensitive. The anger and mistrust of the public toward business triggered legislators and corporations to take urgent action. For example, just after the collapse of Enron (2001) the American Congress passed the Sarbanes-Oxley Act (2002) that covers the responsibilities of boards of directors and requires compliance training at all levels. It also revived the old controversial arguments about the nature of business – whether the only purpose of business is to make profits, the relationship of business and ethics – whether business ethics is an oxymoron, and human nature – whether it is ‘bad apples’ or ‘bad barrels’. Yet, with new sets of regulations, in 2017, we are still witnessing the misconduct of corporations on a global scale. This article investigates the effectiveness of corporate efforts such as revisiting mission statements, polishing the codes of ethics and conducting training, by evaluating the nature of business, human nature and the understanding of ethics in the workplace. By looking through the lens of utilitarianism of ethical issues in business, I will argue that codes of ethics and ethics training are necessary but not sufficient. Within the scope of this paper I wish to pave the way to a holistic approach which is necessary and sufficient to create ethical businesses.

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Ethics has long been a catchphrase that has come to mean different things to different people. Business ethics, in particular, has been known to mutate according to the context and requirements of the business entity in question. This paper seeks to elucidate the concept and application of ethics within the context of a particular industry and uses a case study approach to investigate the workings of a company with a focus on the operations of a local company in terms of its alignment to ethical norms. The methodology used was content analysis of documents pertaining to the company’s operations. The findings revealed that the company did use an ethical approach in its business operations thereby proving that a business enterprise can succeed without having to resort to unethical practices to secure profits.

The third edition of Business Ethics: Decision Making for Personal Integrity and Social Responsibility, by Hartman, DesJardins, and MacDonald, offers a comprehensive, accessible, and practical introduction to the ethical issues arising in business. The text focuses on real-world ethical decision making at both the personal and policy levels and provides students with a decision-making process that can be used in any situation. In addition, practical applications throughout the text show how theories relate to the real world. The third edition features thoroughly updated statistics and coverage of timely issues and dilemmas throughout the text.

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Apple has long been the target of numerous campaigns due to workers' rights issues at its supplier factories.

But the multi-billion pound tech giant has also been found wanting in other areas.

Is Apple ethical?

Our research highlights several ethical issues with Apple, including climate change, environmental reporting, habitats & resources, pollution and toxics, arms & military supply, human rights, workers' rights, supply chain management, irresponsible marketing, anti-social finance, and political activities. 

Below we outline of some of these issues. To see the full detailed stories, and Apple's overall ethical rating, please sign in or subscribe .

In December 2019 a Guardian article named Apple as defendants in a lawsuit filed in Washington DC by human rights firm International Rights Advocates on behalf of 14 parents and children from the Democratic Republic of the Congo (DRC). Other defendants in this lawsuit included Google, Dell, Microsoft and Tesla.

Several families were seeking damages and compensation for the death or serious injury of children who they claim were working in cobalt mines in Apple's supply chain.

Also in 2019 the Ranking Digital Rights (RDR) Corporate Accountability Index gave Apple a score of just 46% . The report rated companies on "commitments and policies, based on international human rights standards." Apple was said to have scored poorly, "due to its lack of governance and oversight over human rights risks, and also lack of clear disclosure of policies affecting users’ freedom of expression."

Environment

Apple received Ethical Consumer's worst rating for environmental reporting in 2019. Whilst the information in their 2019 Environmental Responsibility report covered Apple's main environmental impacts, including conflict minerals, it included only one dated and quantified future environmental target:

“By 2020, Apple and our suppliers will generate or procure at least 4 gigawatts of clean energy in our supply chain.”

Because Apple lacked a second future-dated, quantified target we deducted a mark in the Environmental Reporting category.

Apple's 2019 Environmental Responsibility Report included sections on the use of potentially hazardous chemicals such as PVC, BFR and phthalates.

It claimed that all of its newer products were BFR and PVC free, and included a table that listed the dates at which these substances has been phased out of specific parts of products and packaging. Apple commented that "Apple products are free of PVC and phthalates with the exception of power cords in India, Thailand, and South Korea, where we continue to seek government approval for our PVC and phthalates replacement." As the company had already achieved the elimination of PVC, BFR and phthalates from its products except in some exceptional cases, it received Ethical Consumer’s best rating for its pollution and toxics policy.

There was third party verification by Bureau Veritas (BV) and of product-related carbon footprint by Fraunhofer. 

In 2018, Apple was fined £10 million by the Italian authorities for ‘planned obsolescence’ built into their smartphones. Furthermore in the US, Apple lobbied a right to repair bill which helped to cause its being pulled. As a result, Apple can be seen as part of the problem of toxic e-waste .

In July 2019 Ethical Consumer awarded Apple a worst mark for strategies that were likely to be used to avoid tax. This was because the family tree for Apple Inc on  www.hoovers.com  and showed that the company had subsidiaries in Ireland, the Netherlands, and Singapore. 

These were jurisdictions which were considered by Ethical Consumer to be tax havens and were therefore considered to be at high risk of being used for tax avoidance purposes.

Upon further investigation, Ethical Consumer found a statement given by Apple that provided a narrative explanation for why the company had subsidiaries in Ireland. This wasn't strong enough to affect our decision to give Apple a worst rating for tax avoidance, especially given that we found no country-by-country financial information or reporting (CBCR), nor a clear public tax statement confirming that it was this company’s policy not to engage in tax avoidance activity or to use tax havens for tax avoidance purposes. Apple is one of the silicon six, which has been revealed to have a tax gap of $100 billion so far this decade .

As a result, Apple Inc lost a whole mark in our tax avoidance category.

Company information

Company address:.

• Annual revenue: £318,000,000,000
• Website: https://investor.apple.com

Contact Apple

Tweet Apple to let them know what you think of their ethics.

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• Send a positive email
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Associated brands

Related product guides.

• Desktop computers
• Ethical Laptops
• Ethical Mobile Phones
• Tablets and e-readers
• Ethical Bookshops
• Email Providers
• Video Conferencing

Ownership structure

Ethical stories, pre 2024 ratings, climate change.

• Best Ethical Consumer Rating for Carbon Management and Reporting

Environmental Reporting

• Middle Ethical Consumer rating for Environmental Reporting

Habitats & Resources

• Best Ethical Consumer rating for conflict minerals policy and practice
• Criticised for using gold possibly mined illegally from Brazilian indigenous lands

Pollution & Toxics

• Best Ethical Consumer rating for toxic chemicals policy – electronics
• Halted iPhone 12 sales over radiation exposure levels

Human Rights

• Middle Ethical Consumer rating for operations in oppressive regimes
• Involvement in facial recognition technology
• Named in ASPI report: Uyghurs for sale, beyond Xinjiang
• Named in US lawsuit over Congolese child cobalt mining deaths
• Ranking Digital Rights

Supply Chain Management

• Middle Ethical Consumer rating for Supply Chain Management

Workers' Rights

• Information only: KnowTheChain rating
• Criticised for union-busting at New York store
• Police beat iPhone workers at Foxconn plant
• Allegations of insecure working contracts breaching Chinese labour laws
• Apple Allows Supplier Factory Foxconn to Violate Labor Laws

Anti-Social Finance

• Excessive remuneration for directors or other staff

Political Activities

• Member of five free trade lobby groups
• Political donations and lobbying for contracts or policy changes

Tax Conduct

• Worst Ethical Consumer rating for likely use of tax avoidance strategies
• Decade of not paying enough tax

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Corporate Governance and Ethics A case study of Apple Inc.

• 1. İstanbul Okan Üniversitesi

Description

Corporate governance and ethics are critical components of any successful business. This is especially true for a company like Apple Inc., which operates in a highly competitive and rapidly evolving industry. In this context, effective governance mechanisms are essential for maintaining trust with stakeholders and creating long-term value. Apple has prioritized these areas by promoting transparency, ethical business practices, and a strong commitment to stakeholder interests. This has included initiatives to improve sustainability, board diversity, and data privacy and cybersecurity.

Corporate Governance and Ethics A case study of Apple Inc..pdf

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Ethics Unwrapped: Apple Suppliers & Labor Practices Essay

Introduction, scenario summary, ethical issues, alternative viewpoint, responsible culprits, affected stakeholders, ethical perspective.

Apple Inc. remains one of the most successful American companies that innovate, design, and market a wide range of consumer electronics. It is associated with a unique business model that resonates with the changing demands of its key partners while at the same time maximizing profits. The selected case for this discussion is “Ethics Unwrapped: Apple Suppliers & Labor Practices”. The analysis presents unique ideas and approaches for dealing with some of the emerging concerns in an effort to make the company more sustainable and profitable.

Being a reputable company at the global level, Apple identifies and partners with specific suppliers whose business models are capable of delivering positive results. This organization sources materials and liaises with firms in different parts of Asia to mass-produce and assemble some of its products. While the model is designed to work seamlessly to promote the most appropriate ethical standards, environmental protection measures, and work practices, some challenges have emerged that continue to cause criticism (Aljafari, 2016). For instance, the selected article has described how some of the raw materials are mined unethically in different parts of Indonesia. Specifically, some young children could be forced to work on deep cliffs while exposing themselves to imminent danger.

In light of these predicaments, Apple has always been on the frontline to defend most of its practices by asserting that it lacks the capacity to regulate each and every component or raw material. The complexity of the sourcing model allows the organization to deal with thousands of miners of tin and other materials. On top of these issues, the leaders at Apple have gone further to implement better strategies for improving the practices of labor and supply (Axon, 2020). Such measures are usually intended to make the company sustainable and eventually ensure that positive results are recorded. Unfortunately, the level of criticism has continued to exist since the company is pushed to the limits to meet the expanding demand for some of its products, including the iPhone and the iPad.

Human beings are always required to identify and address most of the ethical challenges affecting their relationships with each other and the surrounding environment. Players in the corporate world are usually expected to deal with the same challenges if they are to remain sustainable. Apple Inc. has found itself in the midst of an ethical crisis that it needs to address from an informed perspective.

The first ethical question at play in the selected case is the inclusion of underage children in labor practices. Specifically, the problem of child labor remains questionable malpractice that all stakeholders should be ready to address. The case describes how children below the age of 15 are compelled to work in tin mines (Axon, 2020). Such minerals are eventually used to produce Apple’s outstanding products. The second ethical concern is that of environmental sustainability whereby the company’s mining and manufacturing processes fail to promote conservation measures.

The studied case reveals that Apple is an unethical organization that is incapable of meeting the demands of all key stakeholders. The fact that its business model does not remove suppliers who fail to meet the outlined standards makes the company guilty. However, a new perspective or viewpoint is possible for understanding the current case study and making the relevant interpretations. For instance, the leaders are Apple has indicated that most of the operations are monitored and analyzed to ensure that they are sustainable and capable of promoting the integrity of the natural environment (Zane et al., 2016). The company controls its suppliers to ensure that they engage in initiatives that are ethical and acceptable in nature.

To understand what could have happened, researchers can focus on the processes that Apple can control successfully. This approach means that Apple might not be in a position to monitor the operations and initiatives undertaken to produce tin in Indonesia and other Asian countries. Additionally, some middlemen can acquire the product and identify new ways to market it to Apple without any kind of suspicion (Axon, 2020). The end result is that Apple might not be in a position to control each and every mining activity. From this viewpoint, it is possible to acknowledge that Apple might still be an ethical company that ensures that most of the business procedures are sustainable and in line with the developed business model.

The studied case study identifies Apple as the obvious culprit for promoting practices that are deemed inappropriate and unethical. However, analysts will acknowledge that there are other companies and stakeholders whose actions contribute to the nature of this problem. First, the suppliers and miners in Indonesia and other countries whereby Apple outsources some of its raw materials should be blamed (Heller, 2020). Specifically, such players fail to put proper mechanisms in place to ensure that tin is mined using procedures that are acceptable and sustainable in nature. Some of these suppliers fail to monitor the manner in which their smaller partners mine tin and achieve their business aims.

Second, specific systems are to blame in Indonesia and other countries for allowing this problem to exist. For instance, the governments have failed to formulate and implement superior policies for monitoring the nature of mining and the process of delivering the final metal products to the targeted customers, such as Apple. Without proper mechanisms and systems, chances are high that the company will eventually acquire raw materials that have been produced or mined using unethical and unacceptable methods (Heller, 2020). The presence of proper systems and monitoring procedures could have reduced the chances of recording this ethical dilemma.

Third, the affected countries could be blamed for failing to support or promote powerful institutions that can monitor the ethical engagements of local mining companies. Such organizations have also failed to implement proper mechanisms for monitoring such partners and ensuring that they promote practices that are acceptable in nature (Sonnemaker, 2020). Unless the governments in these Asian countries consider these issues, chances are high that the problem will continue to be recorded and affect the ethical position of this country.

The identified case study reveals that different stakeholders are affected by the unethical issues arising from Apple’s business engagements. These malpractices are capable of disorienting the lives of many people and affecting the overall integrity of the natural environment. The first group of stakeholders that this issue affects the most is of underage children. These individuals are exposed to dangerous working environments that could claim their lives (Sonnemaker, 2020). Such children are required to engage in economic activities at a time when they should be in school pursuing their educational goals (Zane et al., 2016). Without proper interventions, chances are high that these individuals will grow up to become unsuccessful citizens in their respective communities.

The second group is that of final customers. Although these individuals purchase Apple’s products with the aim of pursuing their goals, chances are high that the ethical malpractices have the potential to disorient the integrity of the natural environment. This development will eventually affect such stakeholders negatively since they will be compelled to encounter extreme weather conditions. For instance, all people are today facing the challenges of typhoons or increased global temperatures (Sonnemaker, 2020). These challenges will continue to affect the integrity of the natural environment and expose lives to unprecedented weather issues.

The third group of stakeholders that this ethical issue affects the most is the suppliers involved in the production and marketing of tin and other raw materials. While these companies expect to market their products at the international level, chances are high that they might be unable to attract new business partners (Heller, 2020). This outcome is possible since most companies at the global level would be unwilling to do business with such suppliers. The nature of these issues explains why there is a need for Apple to transform its model, address the recorded ethical concerns, and focus on the best ways to achieve its maximum potential.

Ethical theories are powerful models for guiding companies to make informed decisions and consider how they can introduce meaningful changes. The most appropriate perspective that can help different partners understand the nature of this case is utilitarianism. Popularized and hypothesized by John Stuart Mill, this theory encourages firms to pursue actions and initiatives that have the potential to improve the outcomes and maximize the happiness for the greatest percentage of people.

The involved and affected stakeholders should be keen to analyze the nature of this problem and propose proper mechanisms to address the situation (Krummel & Siegfried, 2021). By applying the theory, it will be possible to understand how the decision to allow children in mining sites is inappropriate and unacceptable. Such a move makes it hard for them to complete their studies and eventually become successful members of their respective communities.

By applying this model to the case, analysts can identify some of the reasons why the current problem exists. They will go further to apply the utilitarian principle to address the recorded issues and ensure that most of the culprits transform their practices. Apple can rely on the model to improve its monitoring processes and identify additional partners who are acceptable and capable of promoting sustainable practices (Feng et al., 2016). These measures will make the organization more acceptable and ethical, thereby maximizing its chances of recording additional profits.

The completed case analysis has identified Apple as one of the successful companies in the international market. Unfortunately, the corporation continues to grapple with a number of ethical challenges that might affect its overall profitability. The analysis has presented powerful insights regarding the role of ethics in business and how it might affect performance or maximize profits. Unethical procedures are capable of affecting different stakeholders while making companies less attractive. In my future career, I will rely on these ideas to promote ethical procedures and strategies that can maximize profitability and improve the profitability of the companies I lead.

Aljafari, A. (2016). Apple Inc. industry analysis: Business policy and strategy . International Journal of Scientific & Engineering Research, 7 (3), 406-441. Web.

Axon, S. (2020). Ex-Apple employees say the company ignored China’s labor-law violations . Ars Technica. Web.

Feng, Y., Yoon, Y., & He, Y. (2016). The impact of corporate social responsibility on brand value: An empirical study of top 100 global brands. International Journal of Business and Social Science, 7 (10), 61-71. Web.

Heller, M. (2020). Apple rebukes suppliers for labor code violations . CFO. Web.

Krummel, D., & Siegfried, P. (2021). Child labor ethics through the prism of utilitarianism and deontology. Open Access Library Journal, 8 (2), 1-14. Web.

Sonnemaker, T. (2020). Apple knew a supplier was using child labor but took 3 years to fully cut ties, despite the company’s promises to hold itself to the ‘highest standards,’ the report says. Business Insider. Web.

Zane, D., Irwin, J., & Reczek, R. W. (2016). Why companies are blind to child labor. Harvard Business Review. Web.

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IvyPanda. (2022, July 17). Ethics Unwrapped: Apple Suppliers & Labor Practices. https://ivypanda.com/essays/ethics-unwrapped-apple-suppliers-amp-labor-practices/

"Ethics Unwrapped: Apple Suppliers & Labor Practices." IvyPanda , 17 July 2022, ivypanda.com/essays/ethics-unwrapped-apple-suppliers-amp-labor-practices/.

IvyPanda . (2022) 'Ethics Unwrapped: Apple Suppliers & Labor Practices'. 17 July.

IvyPanda . 2022. "Ethics Unwrapped: Apple Suppliers & Labor Practices." July 17, 2022. https://ivypanda.com/essays/ethics-unwrapped-apple-suppliers-amp-labor-practices/.

1. IvyPanda . "Ethics Unwrapped: Apple Suppliers & Labor Practices." July 17, 2022. https://ivypanda.com/essays/ethics-unwrapped-apple-suppliers-amp-labor-practices/.

Bibliography

IvyPanda . "Ethics Unwrapped: Apple Suppliers & Labor Practices." July 17, 2022. https://ivypanda.com/essays/ethics-unwrapped-apple-suppliers-amp-labor-practices/.

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Ethics and marketing – a case study about Apple Inc.

Analysis includes target market, pricing, product obsolescence and supply chain topics. Target Market and pricing is compiled under one section as it made sense to the overall marketing mix analysis

Introduction

Apple Inc., headquartered in Cupertino (USA), is a producer of mobile communication devices and personal computing hardware. It is the first company in history that reached a 1,5 trillion USD stock capitalization (Axon, 2020). Because of its economic and technological influence, its actions are microscopically analyzed by all stakeholders (Harris, 2015, p.21) – Apple is one of the pillars of 3rd and 4th industrial revolution (Schwab et al., 2018) and the company has navigated several long-standing ethical problems in its 44 year history – pricing discrrimination, anti-competitive behaviour and the use of sweatshop labour to name a few.  

Processes or operations in the IT industry are relatively new and businesses cannot foresee long-term consequences of their strategic choices – a deontological framework alone (Harris, 2015, p.28) is not sufficient to analyze ethical dilemmas. For example – Steve Jobs banned Adobe Flash technology from iOs devices which would later be evidenced as the starting point of unnecessary ecosystem demise (Haslam, 2019). Additional examples are AirBnb’s influence over housing prices (Barron et al. 2019) or datacenters effects on the level of carbon dioxide in Earth’s atmosphere (Oberhaus. 2019).

IT industry is facing additional modern concerns such as privacy issues or planned device obsolescence where Apple has been standing on both sides of the fence – either working with governments and NGOs to reduce ethical misconduct (Apple Website, 2020) or directly inducing moral wrongdoings (Nash, 2018). 

Analysis – Target Market & Pricing

Apple’s marketing mix is based around uniquely designed high-quality products. This philosophy is reflected on product packaging, minimalistic advertising and prices which could go up to 1,500 USD for new iPhone models.

One of the target marketing strategies include temple-like stores that invite a religious following (Laskow et al., 2015). This opens up a first ethical question – are Apple fans socially vulnerable consumers (Harris, 2015, p.53) that are buying anything that company serves in a cult-like fashion? Research from Robles-Anderson (2015) states that Apple stores are intentionally built like churches to improve individualistic and collective reasoning around the Apple brand.

Additionally, Apple Release Days, a series of events that promote new products, are organized around the same tokens as pilgrimage holidays or similar religious gatherings. This strategy is legalistic (Stage 2) by Reidenbach and Robin’s model of corporate development (Harris, 2015, p.36), but comes at a cost of wealthier consumers buying expensive hardware that they probably not need and excluded poor consumers that can’t afford high quality iPhones at all (Bell, 2015).

Cult-like following and extreme prices exclude possible users and poor consumers that could benefit from privacy-aware and secure Apple products. For instance, Apple’s dedication and stance to maximize its users’ privacy (and security) is seen in various solutions such as no-backdoor policy (Morrison, 2020). Android users, an 85.4% of global mobile user base (IDC, 2020), are excluded from this high-end solutions and are prone to privacy and security related Android issues (Eddy, 2019). 

Apple started to remedy consumer exclusion and the action has placed them not only in “responsive”, but in an “emerging ethical” (stage 4) model of corporate behaviour. Their newest strategy includes an offering for iPhones with an approachable price-specification set – a 4th approach by Alwitt (Harris, 2015, p.57). Company claims that the practice of offering 399 USD iPhone will become a permanent one (Sullivan. 2020) making the iPhone accessible to most consumers. 

On the other hand, company was involved in time-based pricing discrimination (Harris, 2015, p.73) – forcing early-adopters who waited long lines to pay full iPhone price, while allowing major discounts two weeks later after the launch (Hafner et al., 2007). Those occurrences stopped in the coming years and Apple has a predictive iPhone launch and pricing schedule. A topic that we will discuss in the next section.

Analysis – iPhone Product and planned obsolescence

By Kotler’s classification of products, iPhones are of high immediate satisfaction and long run consumer welfare (Harris, 2015, p.60). As such, they should be used over many years to give it’s customers best “run for the money” and long-term peace of mind. Indirectly – long-term iPhone usage reduces waste and the need to recycle electrical materials. 

Apple is launching new iPhone models on a yearly basis and this strategy has been inline with publishing system updates that are available for both old and new iPhone models. IT industry welcomes constant system updates and this is a wise engineering, security and ethical practice. But Apple has been silent about using system updates to decrease older iPhones technical capabilities – hidden planned obsolescence of iPhone products is an ethical problem for which the company has received criticism from consumers and governments (Clover, 2017).

In short,  users reported a shorter battery life once they applied a new system update. Some users also reported a decreased performance i.e. slower booting-up of the device and underperformance of camera operations after system upgrade.

These technical problems are in contrast with the long-term usage plan for most users. Apple knew about hidden planned obsolescence, but the company’s stance was that they need to optimize operating systems for newer devices  – without detailing the specifics of how these optimizations would affect older devices. This is the opposite of utilitarian ethics framework (Harris, 2015, p.27)  i.e. new system updates improve the quality of the product, but for a smaller subset of users. If we use a deontological framework – categorical imperative, then optimizing system updates for newer models is a rational policy by Apple. 

Real ethical problems were not technical implementations, but communication towards consumers. Apple has a legal right to plan and implement system updates in a frequency that the company seems fit. But it also has a legal obligation to communicate end-of-life expectancy or system degradation. Investigations found out that Apple implemented system update practices for a long time, but they didn’t surface it until users became alarmed. Consequently, French and US governments have fined Apple Inc. for unethical business practices for a total of 525 million dollars (Papadopoulos, 2020). Apple did pay the fines, but didn’t stop implementing these kinds of system updates. The company has made user interface changes on the iPhone operating system so that users know when their iPhone is operating in a limited capacity.

iOs battery settings screen after system updates. The user interface gives you warnings that your battery life is coming to an end and that you should replace it. The cost of replacement is 69 USD or included with your AppleCare+ warranty, if you have any (Apple Web, 2020). Both options represent additional cost on top of already expensive devices.

In this particular case, Apple has been amoral (stage 1) as it hid the truth from consumers, but then it has become responsive (stage 3) ethical company by modifying its practices and paying damages towards consumers (while still holding on to its software updates practices)

Yearly iPhone release cycle is a reflection of the mobile devices market and Apple is not alone in these dynamics (UNEP, 2019). Battle between Huawei, Samsung, and Apple has an effect on increased pollution, recycling electrical waste problems and pressures to maximize efficiency of the supply chain  – which leads us to the last part of analysis.

Analysis – Distribution (supply chain management)

Foxconn, the biggest employer in China, has been Apple’s partner for many of its product lines. Foxconn implements aggressive cost management practices which benefits Apple’s strategy to reduce expenditures.

The partnership is intertwined with many continuous ethical dilemmas such as low wages, unbearable operating conditions, constant overtime usage and over-pressured working atmosphere. Simultaneously, Apple has been one of the most profitable companies in the world and a manufacturer that has the largest profit margin on a sold device. During 2018, it received 87% of all the industry profits while selling 18% of global mobile devices. (Seitz, 2018)

Foxconn-Apple situation has not happened overnight – first reported problems involved a 2009 suicide case involving a worker reporting the loss of an iPhone 4 model. Researchers from Telegraph (Topping, 2009) found evidence that the worker has been beaten by security guards before committing suicide. Problems continued during 2010 where several suicides occurred due to poor working conditions and low pay. Foxconn addressed these measures, but only on the surface – hiring a PR company Burson-Marsteller and installing a series of protective nets so that workers could not leap from a building where iPhones are made.

Foxconn management showed lack of ethical understanding as it did not firstly resolve the underlying basis of repeated suicides – low wages. In these cases, Foxconn has been amoral (stage 1) while Apple has been legalistic (stage 2) i.e. Apple did not directly influence Foxconn management and wages practices. Apple’s approach on Foxconn problems started to change at the same time Tim Cook took over the role of Apple CEO on August 24, 2011 (Fiegerman, 2016).

Apple has introduced departments and teams specialized in auditing vendors and all workforce problems in its supply chain. Company has a dedicated supplier responsibility team that oversees vendors actions and efforts in maximizing benefits for its workforce (Apple Web, 2020).

Supplier responsibility team publishes yearly public reports with a clear benchmark on their suppliers grades and accomplishments. Apple went a step further and has introduced frequent checks and audits, primarily towards it’s main supplier Foxconn, but also towards its vast network of supply chain partners. This action by Apple has been neecesery due to aforementioned suicide cases, but also from overall Foxconn workforce negligence. In this case, Apple has been responsive at first (stage 3) and then emerging ethical (stage 4) company due to its systematic long-term solutions. Possible actions that could place Apple into ethical stance (stage 5) will be presented in the last section of this document.

Suggested actions

Apple has demonstrated its willingness to tackle ethical problems – either through empowering special teams devoted to auditing suppliers or working with it’s vendors in improving the production environment. Company also addresses pricing discrimination on a marketing mix strategy level by introducing cheaper and more accessible iPhone models. Their resolution of planned product obsolescence has been responsive, but the company did not change its system update practices. Listed evidence in the analysis section show that Apple proactively managed most ethical dilemmas and that the solutions were not a one-time PR “stunt”. 

There are a couple of solutions and actions that Apple could additionally take to become a truly ethical (stage 5) company.

Supply chain – suggested actions:

• Current supply chain audits are performed by third party consultants, but Apple does not reveal their name and precise audit methodology. Apple’s leadership could manage audits from transparent parties such as the International Trade Union and clearly publicize findings. Some investigations state that Apple actions are only driven by public relations and not as a real care for its Foxconn workforce – hiring independent auditors could remedy those issues. (Linchuan Qiu, 2017)
• Apple and Foxconn should allow transparent and clear unionization of their workforce. For instance, workers demanded a monthly paycheck of 650 USD while reports found out that Foxconn has organized fake union teams that undermined these wage increase efforts. (Boersma, Clark, 2018)
• Foxconn and Apple should immediately stop illegal activity such as extensive overtime work. Only systematic and legalistic approaches to work load will benefit the workforce in the long-run
• Apple should observe how other mobile phone manufacturers produce devices. For instance, Fairphone has brought positive ethical changes to the mobile device industry such as replaceable batteries, non breaking system updates and workforce benefits that match the highest working standards. Fairphone is assembled in Hi-P (Suzhou, eastern China), a factory that is also an Apple supplier. Hi-P Workers state that working for Fairphone is better and more rewarding than working for Apple assembly line (Linchuan Qiu, 2017)
• Evenly distributing financial resources among all elements of the supply chain could also lead to improving the quality of work and workforce environments, but this is an encompassing financial management decision that needs to take global mobile device market needs and competition dynamics into account. Apple’s current profits and market valuation, as presented in earlier sections, shows that the company has a valid 207 billion USD cash-cushion (!) to engage listed solutions with direct monetary influx. (Feuer, 2020)

Pricing discrimination – suggested actions

• Implementing AppleCare+ with higher end iPhone models. Users that buy a 1.500 USD iPhone should not be charged 69 USD extra for wanting to replace their batteries
• Redesigning iPhone so that the batteries are replaceable by users. Apple has been vehement about its product design and not allowing battery replacement is one of those strategies. Apple should re-think this policy and allow battery replacements on some models.
• Versioned system updates so that older iPhones receive different system updates than newer iPhones. Currently, new iOS system is pushed towards all consumers. Some iPhone owners can abort system updates, but only for a limited time. Solution would be to have different versions of system updates – optimized for every iPhone model specifically.

Apple has a good chance of becoming a truly ethical (stage 5) company if they choose to implement some of these solutions. At least there are no shortages of financial resources. Long term ethical choices should lead to stable profits and high quality solutions (an assumption) that could benefit Apple and serve as a lighthouse for the IT ecosystem as a whole.

Apple Inc. Web, 2020, People come first. In everything we do . Available at

https://www.apple.com/supplier-responsibility/

Axon Samuel, 2020, Apple is now worth 1.5 trillion dollars , available at https://arstechnica.com/gadgets/2020/06/today-apple-became-the-first-us-company-worth-1-5-trillion/  

Barron Kyle, Kung Edward and Proserpio Davide, 2019, Research: When Airbnb Listings in a City Increase, So Do Rent Prices , available at https://hbr.org/2019/04/research-when-airbnb-listings-in-a-city-increase-so-do-rent-prices  

BBC Web, 2020, Apple settles iPhone slowdown case for $500m , available at  https://www.bbc.com/news/technology-51706635  

Bell Killian, 2015, Is there a class divide between iPhone and Android? , available at https://www.cultofmac.com/398525/is-there-a-class-divide-between-iphone-and-android/  

Boersma Martijn, Clark Thomas 2018, Apple, the $1 trillion company searching for its soul , available at  https://theconversation.com/apple-the-1-trillion-company-searching-for-its-soul-101030  

BusinessTeacher.org. 2018. Ethical Issues faced by Apple . Available at : https://businessteacher.org/reports/ethical-issues-faced-by-apple.php?vref=1  

Clover Juli, 2017, Apple Addresses Alleged Throttling of iPhones With Degraded Batteries , available at  https://www.macrumors.com/2017/12/20/apple-addresses-iphone-throttling-degraded-battery/  

Eddy Max, 2019, SecurityWatch: Android vs. iOS, Which Is More Secure? ,  available at  https://www.pcmag.com/opinions/securitywatch-android-vs-ios-which-is-more-secure  

Feuer Will, 2020, Apple now has $207.06 billion in cash on hand, up slightly from last quarter , available at  https://www.cnbc.com/2020/01/28/apple-q1-2019-cash-hoard-heres-how-much-cash-apple-has-on-hand.html

Fiegerman Seth, 2016, Apple under Tim Cook: More socially responsible, less visionary , available at 

https://money.cnn.com/2016/08/24/technology/apple-tim-cook-five-years/

Hafner Katie and Stone Brad, 2007 IPhone Owners Crying Foul Over Price Cut, available at https://www.nytimes.com/2007/09/07/technology/07apple.html  

Harris Fionna (2015), B324 Block 2 Ethics and Marketing , Milton Keynes, The Open University.

Haslam Oliver, 2019, Steve Jobs and his 2010 ‘thoughts on flash’ show why Apple still misses him , available at https://www.imore.com/steve-jobs-and-his-thoughts-flash-show-why-apple-still-misses-him  

IDC Web, 2020, Smartphone Market Share , available at https://www.idc.com/promo/smartphone-market-share/os  

InfoNewt, 2020, VISUALIZING APPLE PRODUCT RELEASE PATTERNS , available at https://infonewt.com/apple-release-patterns/#iphone  

Larson Barbara Z., Vroman Susan R. and Makarius Erin E., 2020, A Guide to Managing Your (Newly) Remote Workers , available at

https://hbr.org/2020/03/a-guide-to-managing-your-newly-remote-workers

Laskow Sarah, Robles-Anderson Erica, 2015, We Asked a Cultural Historian: Are Apple Stores the New Temples? , available at  

https://www.atlasobscura.com/articles/we-asked-a-cultural-historian-are-apple-stores-the-new-temples

Linchuan Qiu Jack , 2017, A bloody decade of the iPhone , available at  https://theconversation.com/a-bloody-decade-of-the-iphone-82974

Nash Tim, 2019, Which smartphone is more ethical, Apple or Samsung? , available at https://www.corporateknights.com/channels/responsible-investing/sustainable-stock-showdown-apple-vs-samsung-15706340/

Morrison Sara, 2020, Why Attorney General Bill Barr is mad at Apple , available at  https://www.vox.com/recode/2020/5/18/21262731/fbi-apple-unlock-iphone-encryption-bill-barr-alshamrani  

Oberhaus Daniel, 2019, Amazon, Google, Microsoft: Here’s Who Has the Greenest Cloud , available at  https://www.wired.com/story/amazon-google-microsoft-green-clouds-and-hyperscale-data-centers/  

Papadopoulos Loukia, 2020, Apple to Pay up to $500 Million over Intentionally Slowing Down Phones , available at

https://interestingengineering.com/apple-to-pay-up-to-500-million-over-intentionally-slowing-down-phones (not available any more)

Porter Jon, 2019, Foxconn founder urges Apple to move production from China to Taiwan , available at  https://www.theverge.com/2019/6/21/18700647/foxconn-terry-gou-apple-iphone-china-taiwan-production

Reidenbach, R.E. and Robin, D.P., 1991,  A conceptual model of corporate moral development , Journal of Business Ethics, vol. 10, no. 4, pp. 273–84.

Schwab Klaus, Davis Nicholas , 2018, Shaping the Future of the Fourth Industrial Revolution, Penguin Books Limited

Seitz Patrick, 2018, Apple Rakes In 87% Of Smartphone Profits, But 18% Of Unit Sales , available at https://www.investors.com/news/technology/click/apple-rakes-in-bulk-of-smartphone-profits-but-small-slice-of-unit-sales/  

Sullivan Mark, 2020, A new low-cost iPhone is coming in March—and it’s a smart move for Apple , available at https://www.fastcompany.com/90461424/a-new-low-cost-iphone-is-coming-in-march-and-its-a-smart-move-for-apple  

Topping Alexandra, 2009, Apple factory worker kills himself after disappearance of prototype , available at https://www.theguardian.com/world/2009/jul/22/apple-worker-suicide-prototype-missing  

UNEP Web, 2019, Is your phone really smart?, available at https://www.unenvironment.org/news-and-stories/story/your-phone-really-smart

Ex QBASIC developer that ventured into a web world in 2007. Leading a team of like-minded Open Source aficionados that love design, code and a pinch of BBQ. Currently writing a book that explains why ‘coding is the easier part’ of our field.

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