Business ethics report case 14 apple inc ’s ethicalsuccess and challenges

Apple’s History: Apple Inc., previously known as Apple Computer, Inc., is a global company engaged in the design, manufacture, and sale of consumer electronics, computer software, and di

TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN VIỆN ĐÀO TẠO TIÊN TIẾN, CHẤT LƯỢNG CAO &

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BUSINESS ETHICS

Report Case 14: Apple Inc.’s Ethical

Success and Challenges

Họ, tên sinh viên: Phan Phương Anh

I CASE SUMMARY:

1 Introduction:

Apple Inc., headquartered in Cupertino, California, has encountered numerous challenges throughout its business history The company's stock price surged from $3.30 to $705.07 between 1997 and

2012, reflecting its remarkable growth However, Apple's journey to becoming a major corporation was not without difficulties, including leadership changes and fierce competition Despite attempts

by other companies to imitate and surpass Apple's products, the secret to its success remains elusive Apple has established itself as a brand synonymouswith quality, status, and innovation, earning the loyalty of millions of consumers This reputation has enabled Apple to revolutionize both the

technology and retail sectors on a global scale

2 Apple’s History:

Apple Inc., previously known as Apple Computer, Inc., is a global company engaged in the design, manufacture, and sale of consumer electronics, computer software, and digital media content distribution The company's primary product lines

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include the iPhone smartphone, iPad tablet

computer, and Macintosh personal computer Applesells its products through online channels and operates a chain of retail

stores called Apple Stores

It was founded on April 1,

1976, by Steve Jobs, Steve

Wozniak, and Ronald

Wayne with the objective of

promoting Wozniak's Apple I desktop computer The company was officially incorporated on

January 3, 1977, in Cupertino, California

Apple’s first product, the

Apple I, was drastically

different from the Apple

products of today It was

constructed by Apple

co-founder Steve Wozniak

Despite the lack of graphic

user interface (GUI), and

buyer had to add their own keyboard and display, Steve Jobs persuaded Wozniak that it could be marketed commercially

Following the successful launch of Apple ComputerInc., co-founded by Jobs and Wozniak, the companyachieved sales exceeding $1 million However, the mid-1980s proved to be challenging for Apple In

1983, they released the Apple Lisa, priced at

$10,000, but it failed to gain traction in the market

In 1985, internal conflicts led to Jobs being ousted from the company, and Apple faced further

setbacks with underperforming products like the Mac I and the Newton Additionally, there were multiple changes in the CEO position These

difficulties, coupled with declining stock prices, posed a significant threat to Apple's future

In 1997, Steve Jobs returned to Apple to try and save the struggling company Jobs immediately began to change the company’s coroprate from

“opened door” to “closed door” policy which was done to prevent employess from taking Apple’s ideas and technologies to another company

Apple is still vigilant in securing its technology and ensuring thatinformation remains proprietary Jobs also built a more flattened organizational structure; rather of addressing employees via layers of management, he addressed them directly However, one

of the most visible shifts was Apple's growth into new product lines in the electronics business

In 2001, Apple introduced the iPod, a portable music player that had a significant impact on the music industry Alongside the iPod, Apple launched iTunes, a software that allowed users to import songs from CDs to their Mac computers, organize their music collections, and manage them

effectively

In 2003, Apple expanded its offerings with the launch of the iTunes Store, an online platform where users could purchase and download millions

of songs for $0.99 each This move reflected

Apple's evolution from being solely a computer

manufacturer to becoming akey player in the consumer electronics industry As a result, in 2007, the company changed its name from Apple Computer, Inc

to Apple Inc., signifying its broader scope and influence

in the market

Apple began to take marker share away from its major competitors in the computer sector with the introduce of tablet computers such as the iPad which was made the sale of desktops, laptops, and netbooks began to decrease Analysts predict that tablet computers will continue to expand rapidly

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3 Apple’s Corporate Culture:

Apple’s transition from a computer to a consumer electronics company is due to Steve Jobs’

leadership abilities, highly skilled emplyees, and itsstrong coroprate culture

Apple's culture places a strong emphasis on

corporate evangelism, which includes both

employees and loyal customers These evangelists play a crucial role in promoting Apple's products and creating a devoted following This

phenomenon is particularly evident in the "Mac cult," where customers who are passionate about Apple's Mac computers actively advocate for the brand among their social circles Upon Steve Jobs' return to Apple, he introduced two significant cultural shifts: encouraging open discussions and establishing a shared vision that employees could rally behind These changes fostered a sense of loyalty and commitment among many individuals within Apple

Apple takes pride in its own coroprate culture, providing applicants with challenges and benefits and motivating itself as a fast-paced, innovative, and collaborative environment Retaill employees that work well in its culture are also sought after, with stations where customers can test and

experiment with the lastest Apple products

To make sure its retailer employees feel motivated,Apple provides conprehensive training, higher pay, and opportunity to move up to manager, genius, or creative Apple also gives young people the chance

to intern with the company or become student representatives at their institutions

Furthermore, Apple provides incentives such as transit subdidies for employees who opt to use public transportation in order to lessen its

environmental issues Apple's free buses run on bio-diesel These incentives cut employee gasoline expenditures while also decreasing pollutants emitted into the environment

4 Apple Ethics:

Apple has established a code of business conduct

to promote appropriate behavior among its

employees and business partners The code is based on four key principles: Honesty, Respect, Confidentiality, and Compliance, all of which contribute to maintaining integrity within the company Apple has implemented a Business Conduct Helpline to allow workers to report any misconduct, and these reports are reviewed by Apple's Audit and Finance Committee In order to ensure adherence to these standards, Apple

requires all its suppliers to sign the "Supplier Code

of Conduct" and conducts regular factory audits

Apple also publishes an annual Apple Supplier Responsibility Report as evidence of its dedication

to promoting responsible behavior among its suppliers

5 Ethical Issues at Apple INC.:

Despite the fact that Apple make an effort to improve the workplace, many ethical issues still existed which could have a significant effect on thecompany’s future success Apple’s sterling

reputation could easily be damaged by serious misconduct or a failure to address risks

appropriately, including:

- Consumer tracking has become a subject of

controversy as advancements in technology haveprovided companies with increased capabilities

to monitor and track customers With the

prevalence of social networking, mobile devices, and internet usage, companies have greater access to consumer data It is important for businesses to prioritize customer privacy and demonstrate respect in order to avoid negative reactions from the public

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- In 2011, Apple and Google sparked outrage

when they revealed that certain features on their phones collected data on locations, which was seen as an infringement on user privacy Users may stop location tracking on their

phones, but Apple’s phones continue to gather location data even when the feature is turned off

- Apple blames this to a flaw in their new software

that they fixed The government is considering a law on mobile privacy, which could have

significant effects on Apple and other electronicscompanies

- In July 2013, a group

of major book publishers joined forces with Apple to fixthe prices of electronicbooks (e-books) A federal judge ruled that Apple was involved in an agreement where publishers wererequired to offer the best e-book deals to Apple'siTunes store Apple was accused of allowing publishers to set the prices for e-books on the iPad, with Apple receiving a 30% share of the revenues through the "agency model" approach This approach, which is less competitive than

the wholesale model, was employed in this case The agreement aimed to ensure that e-books sold on Apple's platform would be priced at the lowest available retail price in the market.

- Following the deal with Apple, the publishers

also approached Amazon to negotiate a similar arrangement Apple has denied any wrongdoing and association with this specific deal, and the company intends to appeal the court's decision

It was alleged that Apple acted as the leader in acoordinated effort to eliminate the retail price market and increase e-book prices, likened to a gang-like behavior "…guaranteed that the e-books in Apple’s e-bookstore would be sold for the lowest retail price available in the

marketplace," Cote wrote

- This chart from Cote’s ruling illustrates the

pricing and payment breakdown:

- In early 2012, Apple made the decision to halt

the sale of iPhone 4S at its retail stores in China following a riot that erupted outside its flagship store in Beijing The large crowd, estimated to

be around 2,000 people, caused safety concerns and prevented the opening of the Sanlitune store To prioritize the safety of both customers and employees, Apple spokesperson Carolyn Wu announced that iPhone sales would be

suspended temporarily at retail stores in Beijing and Shanghai

- In response to the incident, disgruntled

customers expressed their frustration by

throwing eggs at the store and even attacking a mall property manager who was mistakenly perceived as an Apple employee However, otherApple stores in Shanghai and Beijing opened as scheduled and quickly sold out of the iPhone 4S Apple's handling of the situation raised

questions about their ethical approach and the potential risks posed to the safety of both

customers and employees

- Despite Apple's attempts to reduce its

environmental footprint, the majority of its emissions in 2011 came from the life cycle of its products Apple disclosed that out of the total emissions of 23.1 million metric tons of gases, only 2 percent were generated by its facilities,

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while the remaining 98 percent were a result of the life cycle of its products.

- Criticism has been directed at Apple regarding

planned obsolescence, but the company

endeavors to incorporate recyclable materials in its products It has implemented a recycling program at its stores, allowing customers to trade in old iPods, mobile phones, and Mac computers for gift cards or discounts However, many consumers still find it more convenient to discard their old products, particularly if they hold no significant value The issue of e-waste persists as long as consumers continue to

dispose of their electronics

- Apple faced controversy when it temporarily

removed 39 products from the EPEAT green standards rating system, which is widely used bybuyers to assess the environmental impact of computer products Following negative feedbackfrom consumers, Apple eventually reengaged with the EPEAT rating system As sustainability gains increasing importance, Apple must

consider consumer reactions carefully before implementing any changes that may have

environmental implications

- Apple has been actively involved in protecting its

intellectual property rights and has taken legal action against other companies in cases of

alleged theft One notable lawsuit occurred in

1982 when Apple sued Franklin Computer Corporation for copying and using the Apple II operating system Although the initial ruling favored Franklin, it was later overturned,

establishing the protection of code and

programs under copyright law Another

significant lawsuit involved Apple's claim againstMicrosoft, alleging similarities between

Microsoft's Windows operating system and Apple's Macintosh graphical interface However, the court ruled in favor of Microsoft, stating thatthe licensing agreement did not cover the overall "look and feel" of Apple's system

- Apple has also faced ethical controversies

concerning domain name disputes In one instance, Apple attempted to acquire the domainname iTunes.co.uk from its registrant, Ben Cohen After unsuccessful negotiations, Apple appealed to the UK registrar, claiming that Cohen had misused his registration rights Eventually, Apple obtained the rights to the domain name, raising concerns about

preferential treatment toward larger

companies.In another case, Cisco accused Apple

of infringing on its iPhone trademark Apple and Cisco engaged in discussions about the use of the trademark, but Apple eventually withdrew and registered the iPhone trademark under a

different organization This action was seen as

an unfair way to bypass negotiation procedures The lawsuit concluded with an agreement allowing both companies to use the iPhone name, but Apple's actions remained

controversial

- Overall, Apple's aggressive approach to

protecting its intellectual property raises

questions about the legitimacy of its claims and whether it aims to undermine its competitors The courts play a crucial role in determining the validity of Apple's allegations

- A recently disclosed document has revealed that

in 2007, Steve Jobs, the former CEO of Apple, allegedly used the threat of patent litigation to pressure Palm's CEO, Edward Colligan, into

refraining from recruiting Apple's valuable

employees Jobs proposed an informal

understanding that involved a non-poaching policy between the two companies, as well as other prominent firms such as Adobe, Google, Intel, Intuit, and Pixar The release of this document was prompted by legal disputes initiated by former Apple employees

- Jobs firmly expressed his position on the matter to

Colligan, who countered by asserting that Apple's employees were fair game for recruitment and that