Apple And Foxconn Case Study

• The enormous surplus of labor in China imperils workers worldwide as international competition puts incessant downward pressure on wages and working conditions, leading the apparel and textile industries to favor the cheapest and most Draconian producers.

Apple Inc. is a well-known company that designs, produces and markets media devices, personal computers, and mobile communication. Also, the company sells related software, network solutions, peripherals, applications and digital contents (Johnson et al., 2012). The company is best known for its devices including iPad, iPod, iPhone and Macintosh computers. The most famous of the devices is the Macintosh computers released in 1984 as it utilized a Graphic User Interface. This protocol allows users to use a mouse to activate pictures on the computer and has been exploited throughout the industry in all modern computers. The first smartphone in the world was the iPhone that acted as a mini-computer that has similar features of a computer.

Apple Inc. started off as a small computer company and rose to prominence over the following years. They faced great challenges and obstacles to evolve and become one of the top notch corporations today. Having a great CEO, Steve Jobs, is credited for the success of Apple. Under the leadership of Steve Jobs, Apple was able to innovate industry changing technology.

Hon Hai Precision Industry Co., Ltd which trades as Foxconn Technology group or as the media calls it Foxconn has been in media limelight recently due to labor problems that have surfaced from the organization. Foxconn is a major equipment manufacturer supplier to electronics giants like Blackberry, Apple, Microsoft Xbox, Sony PlayStation and the Nintendo Wii. The internet has several articles and controversies regarding the deplorable worker conditions and cases of suicides by the workers.

The TMA of B301A is about Apple Company. It has a case study and has many information about it and its history. I will answer all tow question. First question is about the strategy of Apple. However the second question is about Nokia Company and its strategy also why Nokia goes down and what strategy should use.

According to CNET, workers at an Apple factory in Shanghai work grueling hours in poor working condition for low wages (CNET). The working hours for Chinese laborers are so long that a worker reportedly died after working for to 12 hours a day during a workweek (Daily Mail). Unlike American workers who have a home and life outside of work, the Chinese workers live in cramped dormitories with their fellow coworkers near the work factory. As the sell for the latest Apple product increases, the cheaper the commodity Chinese workers become as they are steadily forced to make more Apple commodities under dire working conditions.

Recently, in July, Apple discovered that Foxconn are “violating, Chinese Laws and Apple’s own social responsibility code of conduct in part by forcing employees to work unpaid overtime.” This also reflects back to the Industrial Revolution through its use of overtime and pay, but the times the employees are forced to work are unlike any in a developed

Li Qiang, a labor rights activist and the founder of China Labor Watch, states that “they [contractors] are encouraging the exploitation of Chinese laborers by hiring factories based on the lowest price and the fastest production” (Chu and Yun). But what happens as a result, according to an academic journal coauthored by Dara O’Rourke, Ph.D., and industrial hygienist Garrett D. Brown, is that the country becomes a magnet for socially inadequate organizations due to lax enforcement of regulations and the suppression of labor rights activists. Furthermore, the easy accessibility of cheap labor indicates a “troubling model for countries seeking to attract foreign investment and develop domestic enterprise” (O’Rourke and

Behind the deception created by Apple’s claim, “We focus on making the world’s best products and enriching people’s lives,” their employees lack the basic rights their consumers, unlike them, receive. The Chinese government, the host of the largest labor force globally, is distinguished for their unwillingness to protect the civil liberties of their people. Corporations flock to China, most notably Apple and Walt Disney, in order to abuse the loose enforcement of their laws, cutting costs by infringing upon the rights of their employees. Through the years, several investigations have examined these greedy corporations, discovering the magnitude of human rights denied to their employees. The malpractices of these firms are hidden behind the joyfulness of their products; the Chinese government should shield their citizens against human rights violation rather than protecting a company 's bottom line. Specifically, companies should not have the authority to disrespect their employees, place them in hazardous conditions, provide them with an inhumane salary as well as employ minors.

Apple Company Incorporated was founded on April 1, 1976. Apple was established by Steve Jobs and Steve Wozniak. Both Steve Jobs and Steve Wozniak sought to create computers small enough to be placed in households and workplaces. Furthermore, they wanted a “user friendly”computer . The first Apple product was built in Job’s garage. Moreover, the first Apple computer was sold and Apple’s sales jumped from $7.8 million in 1978 and to $117 million in 1980. The first computers were a triumph. However, Wozniak left the company in 1983. But Jobs made a deal with Adobe, a small company and the creator of the PDF (Portable Document Format). Together, Jobs and Adobe introduced desktop publishing. IBook, a personal laptop, was introduced by jobs and a while later MP3players ,more commonly known as iPods, were announced. Later, the media player software, iTunes was presented. Later, the iPhone and Apple TV were created. In January 2010, the first iPad was released. One year later on October 5, 2011, Steve Jobs died.Yet his legacy, Apple, continues.

Labor is one of the largest and in certain sectors the most expensive component in the production of goods. Outsourcing acknowledges the labor cost to produce a particular product is cheaper if the manufacturer were to produce the same product in-house where the cost per unit is significantly higher. Stable labor costs are important for long-term revenue projections to be relied upon by managers because they are a precursor of where a company is trending financially. It is this efficiency-in-scale that confirms the benefit of the division of labor memorialized by Adam Smith. As a result of the wage disparity between the costs of American workers versus Chinese workers, hundreds of U.S. based firms relocated all or part of their operations to China, taking advantage of the inexpensive labor market and the many cost-saving incentives offered by the Chinese government.

The global outsourcing in this predicament, no matter how much it “benefits the shareholders and the customers in the United States” has become harsh reality to the workers in China (Jones, 2008, p. 139). As stated in our textbook, “numerous products sold in U.S. stores have been outsourced to countries that do not have U.S.-style regulations and laws to protect the workers who make the products (Jones, 2008, p. 135) These workers have not been compensated for working overtime, are not allowed to use the bathroom facilities during work hours, and it is very hard to ask off for a sick day (China Labor Watch, 2008). As a result of these bad ethical standards, the “Business and Human Rights” has sent Wal-Mart these allegations and their response was sent back on July 29, 2008 reporting that they “have launched an investigation of the factory to assess the allegations” and stated that they “maintain a very strict code of conduct (Business and Human Rights Resource Center, 2008). Wal-Mart needs to put into consideration that “The result of this unethical behavior could lose: their reputation and resources, shareholders who sell their shares, skilled managers and employees who leave the company and customers who turn to the products of more reputable companies” (Jones, 2008, p. 138).

The more enormous the production scale, the lower a producer 's average cost per unit. It is especially influential for those industries without production differentiation, producing certain manufactures such as steel and iron, tires and cars. As a result, they are forced to search for the advantages of cost leadership. In this situation, the advisable solution to the pressure of reducing costs is enhancing the scale of production to lower the fixed costs. In order to achieve it, enterprises have a tendency to pay the employee’s salary as less as possible, which contributes to exploitation. Consequently, exploitation result in unfavorable working conditions and the unequal distribution of wealth; increasing number of people living below the poverty line can cause social problems such as homelessness. In sum, it is necessary for enterprises to ensure proper working conditions while searching for cost leadership.

Apple Inc. is a globally recognised pioneer in the tech industry. It is a corporation that designs, develops and sells electronic products such as tablets, computers and phones. Founded by Ronald Wayne, Steve Jobs and Steve Wozniak in 1976, it is a multinational corporation with headquarters in Cupertino, California. Tim Cook has been CEO since Jobs’ passing in 2011.

This paper presents a case study of Apple Inc. Apple Inc. is a technology based corporation with emphasis on computer software and hardware (MAC and Apps), tablets (IPad), smart phones (IPhone), and mp3 plays, (ITouch). Apple Inc. has grown tremendously over the years and ever since 2001 has expanded its brand and retail stores to over 375 stores/outlets globally. The business has seventy two thousand eight hundred employees in thirty eight countries. Apple Inc. has truly become one of the most efficacious corporations within its field behind or competing with Microsoft and Google Inc.