A Case Study: How Can Apple improve Corporate Social Responsibility towards their

suppliers?

Tawasil, Fatima Mariam M.

Submitted to:

Mr. Francis Arroyo

BSBA

11 October 2019
 I. Synopsis

According to Sun Hye Lee, & etc.. (2016) Case study, it was stated that Apple had an

excellent reputation in the global market; they were recognized to have an excellent

reputation in terms of corporate social responsibility during the year 2014. For the past

years Apple has been leading and increasing its sales yearly. Apple’s supplier in

producing their products were from Foxconn company however since apple was

notorious for its price policy, by squeezing suppliers to produce products at lower and

lower costs they therefore chose to partner with Pegatron company instead because

they can produce apple products at cheaper cost. With this matter aside from switching

to another manufacturing company Apple has been already accused of having allowed

labour rights violation in China when Foxconn Company was still their supplier, a major

supplier of its products in 2009. Nevertheless the company had worked hard to

overcome these issues to avoid any negative consequences for its corporate image.

However in year December 18, 2014 a new evidence was presented in a British

Broadcasting Corporation (BBC) documentary showed that labour rights violations

continued to occur in China, this time it happened at Pegatron company another large

Apple supplier that specialized in the assembly of Apple iPhone. At December 19 2014

a global news media accused apple and Pegatron by emphasizing apple “broken its

promises” to maintain CSR. A variety of poor practices to their laborers were exposed

first, workers had to hand in their identification cards before entering a factory, second

they were not given basic health and safety training and lastly they were forced to work

excessive hours. Their requests for day off were routinely ignored. This only proves that

apple has to improve its CSR towards their people and their suppliers.
II. Problem Statement

Determine the solution on how apple can improve their corporate social

responsibility to their suppliers.

1.) What are the possible solution that apple can do to solve their poor practices

of corporate social responsibility towards their laborers?

2.) How will the Apple Company build back its good reputation to the global

market despite of the circumstances?

3.) How can Apple maintain its good relationship to their suppliers in terms of

their favor to protect their laborers as well?

III. Objectives

1.) To be able to improve the good practice of apple’s corporate social

responsibility to towards their laborers who produce their products.

2.) To be able to maintain a good reputation on the internal most especially the

external factor of the market of apple in order to maintain customers demand.

3.) To ensure that the manufacturing company will still continue to partner with

apple in producing smartphones and etc… with proper treatment along with

their laborers.
IV. Areas of Consideration

STRENGTH WEAKNESSES
 Apple was the Largest player in the  Due to the focus of increasing sales

industry of Smartphones and good quality of apple products,

 Apple has very good features they lack the monitoring process to

 Apple’s products were differentiated internal factor

from those of its competitors by its use  Apple had been accused of having

of a proprietary operating system (iOS) allowed labour rights violations in

 Apple earned 90% of profit from year China Foxconn company during the

2014 and 2015 and it continues to year 2009

increase throughout the years.  During December 18 2014 new

 Apple ranked 5th on Forbes to be one evidence that BBC presented that

of the “best CSR reputations” list. labour violations still continue to occur.
OPPORTUNITIES THREATS
 Customers have been trusting apple  Apples external reputation is in danger

throughout the years due to its good due to its poor practices of Corporate

quality and services. Social Responsibility.

 Customers were extremely loyal to  Apple will having a hard time deciding

apple products. how to solve its issue towards their

supplier.

 Apple take CSR for granted

V. Alternative Courses of Action

A. Apple should improve their monitoring process to their suppliers

 Apple’s corporate social responsibility was not maintained, with this matter, the

company needs to improve its monitoring process to ensure that suppliers do not

violate labor rights against their workers to prevent issues.

B. Apple should fix the working conditions tor their suppliers as well as their

laborers.

Apple should strengthen the rules and regulations on how suppliers should treat

their labourers’ rights. Presence of DOLE may appear. In this solution a

negotiation between their suppliers may occur in order to fix the necessary

problem that was exposed in public to protect the both company’s reputation.

C. Change the manufacturing company

If suppliers won’t further agree to the terms and conditions that apple would like

to suggest for Foxconn and Pegatron. The best option is to change the

manufacturing company, since the brand of apple came originally from the United

States they can change the manufacturing company to US instead, it will be

more convenient for apple to monitor them frequently since apple brand came

from the same location as well.

VI. Recommendation
With the given 3 options above the proponent will rather choose option letter C

which suggested changing the manufacturing company. The proponent would

rather take this solution to apple’s problem with 2 main reasons first, the 2

manufacturing companies from China where apple has considered it to be the

biggest suppliers Pegatron and Foxconn has already violated the rights of

labourers several times. Second, these 2 companies may be doing great in

producing Apple products at lower cost so it means they are earning profit since

they produce a more apple products, however internal conflict along with the

suppliers labourers does not function as to what Apple expected because

labourers are being abused to accomplish what the company’s desire. If the

companies are one of the biggest suppliers that apple will have then why would

they not practice corporate social responsibility towards their people. In this case

scenario in order to save apple’s reputation in the global market, the best way is

to switch the manufacturing company, they may switch suppliers from another

country who practice proper corporate social responsibility or as much as

possible they may choose manufacturing suppliers from United States instead so

it will be more convenient to them to monitor by ensuring corporate social

responsibility is applied in every field whether it may be internal or external factor.

The cost of production may be higher than their previous suppliers but in reality

when it will be sold to the customers they won’t mind if it’s expensive or not

because the apple has strong demand for apple and they are already used to

when buying apple products is expensive because they know Apple has good

services to their customers in terms of its features such as iOS.

 VII. Action Plan

Action Persons Involved Time Frame

Step 1: Evaluate Apple’s monitoring  Apple CEO (Tim Cook) 15 days

performance  Senior Vice Presidents,

 Chief Design officer

 Chief Operating officer

 Vice Presidents
Step 2: Negotiate with Pegatron and  Apple CEO (Tim Cook) 10 days

Foxconn that changing of suppliers  Pegatron CEO

will occur and evaluate their  Foxconn CEO

performance with suggestions before  Chief Operating officers of

leave. the 3 companies

Step 3: Search for manufacturing  Apple’s CEO (Tim Cook) 2 months

company that practices proper  Communications department

Corporate social responsibility  Worldwide Human resources

Step 4: After searching pick the best  Senior Vice Presidents 1 month

companies and evaluate their  Vice Presidents

products and performance

Step 5: Pick the best supplier or  CEO of Apple (Tim Cook) 15 days

manufacturing company and set an  Senior Vice Presidents

appointment with them.  Vice Presidents

Step 6: Visit the manufacturing  CEO 10 to 15 days

company and monitor  Senior Vice president for

hardware engineering,

 Senior Vice president for

software engineering,
  Senior Vice president for

internet software and

services,

 Vice president for

environment, policy, and

social initiatives,

 Chief Financial Officer

 Chief Operating officer

 Vice President for Marketing

communications
Step 7: Set a negotiation with that  CEO of Apple 5 days

manufacturing company.  CEO of the manufacturing

company