AQA BUSS4 Section A 2011: Corporate Social Responsibility PRACTICE ESSAY QUESTIONS

Apple and Foxconn

Stimulus Material Apple is one of the worlds leading producers of mobile devices with a strong reputation for product innovation and high customer loyalty. In 2009 it was widely reported that Apples Chinese-based suppliers were using child labour in several of their large-scale factories. At the largest factory Foxconn a growing problem of employee suicide was also reported which was blamed on unethical management approaches. Apple was heavily criticised for its standards of corporate social responsibility. In response, Apple instigated a comprehensive programme of supply chain audits, the detailed results of which it reports openly on its website. The problems experienced at Foxconn and other suppliers has not stopped Apple from reporting continued significant increases in revenues, profits and a growing share price. Question With reference to the item above and your own research, to what extent do you agree that the greatest influence on the CSR responsibilities a firm takes on is the fear that bad publicity may damage a firms reputation and brand? Key Essay Hooks Greatest influence what other internal/external influences might be more important? Reputation and brand damage the link with revenues and profit Fear of bad publicity suggests link between CSR and risk management

Key Application Points re Apple & Foxconn Strength of Apples global brand & appeal able to withstand bad publicity Apples customers more concerned about innovation than CSR? Complex supply chain do to need for mass low-cost manufacturing Apple has been transparent about the problems pre-empting NGO/media investigation?

Arguments For It takes 20 years to build a business but just 5 minutes to destroy it (Buffet) vital to identify CSR responsibilities that could materially affect business reputation if things go wrong Shareholders are the primary stakeholder group so anything which potentially damages their value will be a priority for Directors Businesses that rely on their brand reputation are much more exposed to long-term costs of bad publicity

Arguments Against CSR doesnt have to be a defensive choice (risk management) it can be a positive action which builds reputation which increasingly shareholders are expecting of their management CSR as a net benefit to profit reducing costs in the supply chain (a motivation for greater supplier control and auditing by Apple?) Multinationals recognise that as they extend their supply chains to take advantage of globalisation, they have to take on greater responsibilities

Depends On Management culture and leadership how do they view the role of CSR? Nature of the business how heavily regulated or monitored by NGOs? What are the likely costs of bad publicity? Are we referring to the long or short-term in terms of reputational and brand damage?

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