The life inside Apple’s fortress is highly demanding and has a deathly sense. Also, not many people know what goes on behind the closed doors of Foxconn. I have decided on the topic of focusing on the ethical status of a company and how it affects the views on that business as I am studying BTEC Business. For my business of choice for this project, I chose Apple Inc because of the recent issues occuring at Foxconn. Foxconn is one of Apple’s factories which has been under a lot of pressure in the media recently from not treating their employees fairly. The question which I formulated was ‘to what extent should Apple Inc. have been granted ethical status, with regards to their corporate culture?’ I found this ethical dilemma to be robust since there are very intense opinions about both positive and negative views on Apple’s actions at Foxconn. I have also chosen this topic since I enjoy looking at the inside of a business and how they work but this shows the downside of one of the world's biggest companies.
What is corporate culture? “Corporate culture is the beliefs and behaviors that determine how a company’s employees and management interact and handle outside transactions.” Corporate culture is a major part of a business as it can affect the business's productivity as well as not having a good environment to work which may cause issues between employees. “Awareness of corporate or organizational culture was first discovered in the 1960s but mainly for universities. Just after this the phrase corporate culture which was formed in the early 1980s and was widely known by 1990s.” The phrase in the 80s and 90s was used by people to describe the character of the company.
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Huffpost, Inc, Forbes have done research on what makes a business have an excellent corporate culture. HuffPost has stated 7 things which makes a great corporate culture which include a “purpose-driven company culture, effective communication pattern, a culture of feedback, embracing diversity, teamwork, engagement, and loyalty as well as finally growth and development.” Inc have also made a list with 7 things which make a good corporate culture starting with “if you want to be trusted you must trust, give employees a chance to get to know one another, create a cool space, give them free stuff, no people who disturb the business, encourage growth and communicate”. These two lists are fairly similar in the sense that must the things on the lists are the same.
As well as these lists of seven Forbes have created a list of 15 things which make a good corporate culture. “Enlist, empower and encourage, Create a respectful workplace, care about each other, live it, be inclusive, be the example, communicate properly, repeat your message, never forget your purpose, establish trust, make it about humanity, create a core values statement, focus on what is going right, share the same vision and have a common story” Research from Lauren from TruPath shows that “64% of employees do not feel like the company they work for has a strong culture.” This is really affecting the Labour turnover at these businesses with the “turnover at companies with poor culture being 48%” where as at companies with a “good culture the turnover is just 14%.” Labour turnover is defined as the proportion of a firm’s workforce that leaves during the course of the year. It is calculated by Number of employees leaving divided by the Average number of employees X 100 t give a percentage. For example, if there was on average 150 staff in a business and 6 of them are off sick, 2 on maternity leave, and 2 on holiday during the course of the year. The calculation will go 6+2+2=10 so ten employees are off in the year. Next, you will do 10 divided by 150 which gives 0.06666667 then you multiply that by 100 to give a percentage which it will give us 6.66%.
Research by Brain Merchant shows the negatives about Apple's Foxconn. The article states that “It’s not a good place for human beings” this is from one of the men which work at Foxconn. The man also stated that the management is both “aggressive and deceitful”. This has affected all the employees inside Foxconn via suicide and depression becoming normalised. This proves that Apple are treating their employees in a way in which is not respecting of them and not improving anything. From the research from Brain Merchant, I believe that apple should not have been granted ethical status because they are treating their employees unethically and inhumanely. In this example from Brain Merchant, their is a section referring to someone who unfortunately commits suicide, and it states: “Here someone dies, one day later the whole thing doesn’t exist” and to follow up “You forget about it.” This shows how unethical Apple is and that they should not be granted ethical. From looking at the research it seems that Brain Merchant is a bias source of information due to the fact he has actually been and worked in Foxconn undercover. The research also seems valid however it can be seen as biased as he has had experience with working for the company.
Apple should have not also been granted ethical status since research from Fran Hawthorne shows that Apple have forced their employees to work overtime and have elderly people work at these intense standards. Apple's worst ethical decision according to Fran Hawthorne is “the banning of all titles published by John Wiley & Sons from Apple stores” This is because Jobs did not like the book that was written about him. Fran Hawthorne also had an investigation raised on Apple for charges of child labour and horrendous conditions at Chinese factories. From this research I still do believe that Apple should not be granted ethical status because they are forcing the employees to work overtime as well as have the elderly and children working in factories. This seems like a valid piece of research conducted by Fran Hawthorne due to the fact that there are many people who have came back with similar information about the elderly and children working illegally at Foxconn. Her research shows how elderly and children should not be working in such a high-intensity workplace since they are more vulnerable than people of average working age.
This is emphasised by the work in which Eric Yaverbaum, who within his report states: “the students maintain they were forced to work there by their school in order to graduate, while both Foxconn and their school maintain the work was voluntary; for its part, the local government of Henan province mandated that student labor, were available, be sent to Foxconn to help meet demand.” From this you can see how Foxconn is forcing students to work for them by making schools making it no voluntary to work at Foxconn and making so they need to work there to graduate. This shows they should not be given ethical status as they are forcing children to work extremely long hours way over the child overtime limit. This seems like a valid source of information since Fran Hawthorne has gained similar information about the elderly and children working at Foxconn.
However, according to an article in 2002 by Xinhuanet, it states “State organs, social bodies, enterprises, institutions, non-governmental not-for-profit organizations and private businesses (hereafter referred to as employers) are prohibited from employing minors under the age of 16 (employment of minors under the age of 16 are hereafter referred to as using child labour).” This shows how China was trying to stop child labour although it still occurs to this day especially at Apple Foxconn. This seems like a non bias piece as they are just stating the child labour laws so that companies can abide by them and potentially reduce the progression of child labour in the country.
Richard Bilton from the BBC conducted research about Apple failing to protect its workers. The research via BBC shows how exhausted the workforce of Apple. The employees have been forced to work extremely long hours ranging from 12 to 16 hours a day. Some of the employees state in which when they finish they do not have enough energy to move and will not have any time to rest before their next shift. An undercover reporter had to work 18 days straight before they were allowed a day off. The reporter stated 'Even if I was hungry I wouldn't want to get up to eat. I just wanted to lie down and rest. I was unable to sleep at night because of the stress.' In the report it also states that Apple declined interview for the continuous improvement program. Apple also declared 'We are aware of no other company doing as much as Apple to ensure fair and safe working conditions.” This research shows how since 2014 there has been no improvement in apple’s workplace.
According to research into Apple’s corporate culture via Ben Sins. During his research he found out that the Chinese factory workers were falling victim again to high demands and lack of rest. With the high amount of demand in which the factory workers have to deal with huge amounts of pressure from the management. The pressure being caused by meeting the high demands are causing more suicides. The employees of Apple are being paid extremely low wages for the excessive workload. During the construction of the Iphone 7 apple have employed tens of thousands of staff. It is seen very unethical since apple are charging hundreds of dollars for a phone and only paying staff minimal.
Research from Harrison Jacobs shows that Foxconn produces half the world's iphones and they employ about 350,000 people. Before the fall release of a new Iphone the factory produces 500,000 phones a day and around 350 phones a minute. The site of foxconn is regarded as a city because of all the 12 story buildings. Overall Foxconn has around 1.3 million employees in China. Foxconn reaches a span of 2.2 miles and dozens of buildings. Foxconn have very strict rules in which the employees have to follow
- “Wake up at 6:30 a.m.
- Head to the factory at 7 a.m.
- Eat breakfast and start working at 8am
- Take an hour for lunch. Most people eat at the canteen inside the campus, but some head to vendors outside because the food is better.
- The shift ends at 5 p.m., but if overtime is offered, most will take it and work until 8 or 10 p.m.
- After work, eat dinner with friends or play video games until 10 or 11 p.m. Then go to sleep.”
The schedule is switched for those who work the night shift.
On the other hand Apple has good corporate culture because since coming under the spotlight for bad corporate culture they have improved slightly since then but still not fully. They first come under media pressure in 2007 when someone committed suicide at Foxconn. Apple have changed this since they have made working conditions a bit better since this but they have done anything major since to improve the working environment for them.
From an article on Foxconn’s social and environmental responsibility it states on page 10 that “Foxconn upholds a corporate culture of dignity and integrity.” From considering the evidence of it shows how Foxconn pride themselves on being honest and honourable since they have a full compliance with local and international anti-corruption, and anti-bribery laws and regulations. This allows Apple to have an ethical status as it’s showing how they stick to the laws.
Research from Tim Worstall states that foxconn is not the worst factory in china since they “pay some attention to appearance and laws.” He goes on to state that the worst factories in China are small ramshackle and unregulated workshops because they pay no attention to laws and appearance. Throughout the essay, Tim Worstall declares that the conditions their have dramatically better than these ramshackle factories. Foxconn has raised the wages four times from 2009-2012. An average worker at foxconn get paid $2 an hour and gets around $400 a month. They work between 40-50 hours a week.
According to Travel China Guide “The Chinese government stipulates a five-day workweek and the business hour is regulated as no more than 8 hours a day and no more than 44 hours a week in the Labor Law of People's Republic of China.” Foxconn violates these rules by offering 50 hours a week to their employees. This is granted as unethical as it is going over the work rate and seems like foxconn are forcing their employees to work what seems to be non-stop.
The research in which Phil Muncaster produced shows how Foxconn has been granted ethical status. The report states that the fair labour association has claimed that Apple's foxconn is ahead of schedule. The report made from the fair labour association shows how it has improved its internship programme. This programme ensures that “students don’t work overtime and that they can terminate the internship at anytime.” It also states that many physical changes have occured to improve worker health and safety. Foxconn now have regular checks to see if equipment is working properly for safety purposes and they also test the emergency equipment. Foxconn according from Phil Muncaster has reduced hours per week down to 60 including overtime with a goal of reaching 40 hours per week including 9 hours overtime without affecting pay.
The research by Peter Kane shows that the president of the US has stated Foxconn will bring potential of 13,000 jobs. Foxconn is the largest contract electronics manufacturer and makes everything from ipods, to kindles and to LCD screens. Foxconn will initially hire 3,000 employees instead of the 13,000 in the next 10 years. It would cost taxpayers “$17,273 per worker per year” Foxconn has started to invest into automation systems since they will be more efficient and less expensive. This is seemed as ethical since they are reliving employees of tough and harsh conditions and making robots do the jobs for them.
In conclusion I believe that apple’s corporate culture can do with some drastic improvements in how they treat their employees since it can be look at as inhumanely. Besides I do feel Apple has improved slightly via they are cutting down the amount of child labour since the child has a choice in which if they want to continue with the internship.
Research conducted by Pauline Meyer shows how important corporate culture is to Apple. In Pauline Meyer’s report it states that it is a “key factor for success” suggesting that they have worked hard to gain the title of being a good ethical company. As well as this Apple have gained an ethical status according to Pauline Meyer is that Apple “maintains the business philosophy, values, beliefs, and related behaviors among employees.” This shows that Apple should be awarded an ethical status as they do consider employees values and beliefs which in some companies do not. This causes the employees to feel appreciated within Apple and is why apple should be awarded an ethical status.
From the CSR rating it shows that apple are very ethical since they have a rating of 88 out of 100 which is regarded as high which shows that they have a good corporate culture. This shows that apple looks after their employees and treats everyone fairly. This research was compared to “18,553 different companies” which show Apple having one of the best scores. This is also backed up with research from Joanna Zambas as she regards apple as having a great corporate culture. Apple according to her research an employee she interviewed stated “competitive pay, great benefits, amazing people, great work, awesome opportunities, excellent experiences, great atmospheres in a beautiful store, no matter where you’re working!” This shows that the employees at apple are enjoying working at Apple since they are being treated fairly since they are saying it’s an amazing place to work. This shows that Apple have a good ethical status as the person states that they get great benefits which can show them caring for their employees and everyone involved in the business.
The corporate culture at apple is not even half as good as Netflix's corporate culture as they are one of the best companies for corporate culture as they were in the top five great corporate cultures from Forbes. The first thing they do which apple do not is value there their employees since netflix believe that their “values are skills and behaviours that they seek in people.” Compared to apple whose values are based on the customers. They also base their values on innovation, good management, quality/excellence and positive social contribution. Apple do include team spirit but from my essay about Apple (Foxconn), this must not include those working in the factories.
Apple apparently aim for effectivenesses and quality of life. Netflix compared to apple allow their employees to have freedom which makes them responsible. From doing this netflix have told employees to rely on logic and common sense instead of having strict rules. Apple on the other hand have strict rules which limits their employees of staying within the rules. According to the values of apple they believe that having aggressive goals will help the team drive towards achievements. Also having built the company on innovation when providing products helps Apple set the aggressive targets. Netflix is less aggressive in setting goals as they have clear strategies and goals planned which are far less intense than Apple’s.
Overall I believe with the side in which Apple should not of been granted ethical status since there are way more negatives than positives. Also from looking through my research I conducted there was some distressing images of conditions within and at Foxconn. Some of the images showed their living condition which was in a tight space which seemed like they are caged up just for work. I don’t agree with the fact of child and elderly labour at Foxconn since they are the most vulnerable and have to put up with the intense demand of Foxconn. The working hours at Foxconn are way to high since 40 to 60 hours a week on $2 an hour is absurd. It seem like high levels of intense work for very little reward as well as barely getting any rest before their next shift. My last point is there is a strict timetable of employees days which is forcing them to feel like they are still working even when they are scheduled to
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