Business ethicsreport case 14 apple inc ’s ethicalsuccess and challenges

Jobs and Wozniak wanted to make computers smallenough for people to have them in their homes or offices.- Apple Inc., formerly Apple Computer, Inc., is a multinational corporation thatcr

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN

-o0o -BUSINESS ETHICS

REPORT CASE 14: Apple Inc.’s Ethical

Success and Challenges

- Apple Computers, Inc was founded by college dropouts Steve Jobs and SteveWozniak, who brought to the new company a vision of changing the waypeople viewed computers Jobs and Wozniak wanted to make computers smallenough for people to have them in their homes or offices.

- Apple Inc., formerly Apple Computer, Inc., is a multinational corporation thatcreates consumer electronics personal computers servers, , , and computersoftware, and is a digital distributor of media content The company also has achain of retail stores known as Apple Stores Apple's core product lines arethe iPhone smartphone iPad tablet computer, , and Macintosh computer line.Founders Steve Jobs Steve Wozniak, , and Ronald Wayne created AppleComputer Co on April 1, 1976

- Apple’s first product, the Apple I, was vastly different from the Apple products

of today Jobs and Wozniak started out building the Apple I in Jobs' garage andsold them without a monitor, keyboard, or casing This first handmadecomputer kit was constructed by Apple co-founder Steve Wozniak It lacked agraphic user interface (GUI), and buyers had to add their own keyboard anddisplay Co-founder Steve Jobs convinced Wozniak that it could be sold as acommercial product In 1976 the Apple I was unveiled at the Home BrewComputer Club and put on sale for $ 666.66 This strange price is offeredbecause its creator, Wozniak “likes repeating digits”

- Although the Apple II computer model was released in April 1977 and startedshipping in June of that year In October 1977, the company removed the Apple

I from its product list and officially discontinued production The Apple IIrevolutionized the computer industry with the introduction of the first-evercolor graphics Sales jumped from $7.8 million in 1978 to $117 million in

1980, the year Apple went public

- However, the 1980s saw difficult times for Apple However, the 1980s saw difficult times for Apple Wozniak left Apple in 1983 due to adiminishing interest in the day-to-day running of Apple Computers Jobs thenhired PepsiCo's John Sculley to be president In 1983 the company introducedthe Apple Lisa for $ 10,000 The product flopped However, this move

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backfired and after much controversy with Sculley, Jobs left in 1985 and went

on to new and bigger things Its computer products the Mac I and the Newtonwere not successful, and the company underwent several CEO changes Withdeclining stock prices, the future of Apple was in jeopardy

- Over the course of a few years, Apple's market share suffered slowly after itspeak in 1990 and by 1996, experts believed the company to be doomed It wasnot until 1997, when Apple was desperately in need of an operating system,that it bought out NeXT Software (Jobs' company) and the board of directorsdecided to ask for some help from an old friend: Steve Jobs Jobs became aninterim CEO, or iCEO as he called himself (Jobs was not officially the CEOuntil 2000) Jobs decided to make some changes around Apple

- The return of Jobs introduced a new era for Apple Jobs immediately began tochange the company’s corporate culture Before Jobs’ return, employees weremore open about Apple projects After he returned, Jobs instituted a “closeddoor” policy Today Apple continues to remain vigilant in protecting itstechnology and ensuring information remains proprietary Jobs also created aflattened organizational structure; rather than go through layers y In 2001Apple launched the iPod- a portable music player that forever changed themusic industry The company also introduced iTunes, a type of “jukebox”software that allowed users to upload songs from CDs onto their Macs and thenorganize and manage their personalized song libraries Two years later Appleintroduced the iTunes Store, where users could download millions of theirfavorite songs for $ 0.99 each online

- In 2007 Jobs announced Apple Computer, Inc would be re-named Apple Inc.This signified that Apple was no longer just a computer manufacturer but also adriver in consumer electronics The first version of the iPhone became publiclyavailable on June 29, 2007, in selected countries/markets It was another 12months before the iPhone 3G became available on July 11, 2008 Appleannounced the iPhone 3GS on June 8, 2009, along with plans to release it later

in June, July, and August, starting with the U.S., Canada, and major Europeancountries on June 19 This 12-month iteration cycle has continued with

the iPhone 4 model arriving in similar fashion in 2010, a Verizon model wasreleased in February 2011, and a Sprint model in October 2011, shortly afterJobs' death.

- The products was made by APPLE : Apple III, Apple IPO, Xerox PARC, MAC,iPod, Iphone, Ipad, Apple TV, iTunes

- This opened an era for Apple to transition from a computer to a consumerelectronics company

II APPLE’S CORPORATE CULTURE

- After became a consumer electronics company, Apple faced enormous trammel Although many can only speculate about why Apple succeeded

so well, they tend to credit Steve Jobs’ remarkable leadership abilities, Apple’s highly skilled employees, and its strong corporate culture.

- The question is “ what had Steve Jobs done to overcome all the difficulty and made the company became one of the best companies in the world” First , the concept of evangelism is an important component of Apple’s culture Corporate evangelists refer to people who extensively promote a corporation’s products Apple even had a chief evangelist whose job was to spread the message about Apple and gain support for its products.

However, as the name evangelism implies, the role of evangelist takes ongreater meaning Evangelists believe strongly in the company and will spreadthat belief to others, who in turn convince other people Therefore, evangelistsare not only employees but loyal customers as well In this way, Apple was able

to form what it refers to as a “Mac cult”- customers who are loyal to Apple’sMac computers and who spread a positive message about Macs to their friendsand families

- Successful evangelism only occurs with dedicated, enthusiastic employees whoarewilling to spread the word about Apple When Jobs returned to Apple, heinstituted two cultural changes: he encouraged debate on ideas, and he created

a vision employees couldbelieve in By implementing these two changes,employees felt their input was important and they were a part of something

bigger than themselves Such feelings created a sense of loyalty among many atApple.

- Apple Inc.’s organizational culture is a key factor in the continuing success

of the business The consumer electronics company’s organizational or corporate culture establishes and maintains the business philosophy, values, beliefs, and related behaviors among employees This business analysis case shows that Apple has a corporate culture that motivates human resources to support various strategic objectives Apple also emphasizes that it does not adhere to the average workday Instead, Apple markets itself as a fast-paced, innovative and collaborative environment committed toward doing things “the right way.”

- Apple has their unique approach to able to maintains a positive work culture that keeps its employees motivated ;

1 Creativity and innovation

2 Moderate competition

3 Excellence

4 Teamwork

5 Integrity and Secrecy

Through this apple hopes to attract those who fit best with its collaborative culture

- In the other hand, Apple also looks for retail employees that work well in its culture Inside the Apple retailers are stations where customers can test and experiment with the latest Apple products Employees are trained to speak with customers within two minutes of entering the store To ensure its retailer employees feel motivated, Apple provides extensive training, greater compensation than employees might receive at similar stores, and opportunities to move up to manager, genius (an employee trained to answer the more difficult customer questions), or creative (an employeewho trains customers one-on-one or through workshops) Apple

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also offers young people the chance to intern with Apple or become student representatives at their schools.

- Another benefit Apple offers combines employee concerns with those of the environment In an effort to reduce its overall environmental impact, Apple offers incentives such as transit subsidies for employees who opt to use public transportation Its Cupertino facility is equipped with shuttles for

employees, including free bus service between the Apple headquarters and thetrain station Apple’s free buses are powered by bio-diesel.These incentivesreduce fuel costs for employees while simultaneously lowering emissionsreleased into the environment

III APPLE’S ETHICS

- Apple has tried to ensure its employees and those with which they work displayappropriate conduct in all situations It bases its success on “creatinginnovative, high-quality products and services and on demonstrating integrity

in every business interaction.” According to Apple, 4 main principles contribute

1 Privacy

- Consumer tracking is a controversial issue Due to the ubiquity of social network, it is much easier for companies to track costumer Knowing more information about clients is the best way to enhance market its products and understand more about costumers However, apple keep the distance and show respect for the costumer’s privacy Otherwise, a perceived breach in privacy is likely to result in a backlash against the company.

- In real life experience, Apple faced a backlash in 2011 Apple and Googledisclosed that certain features on the cell phones they sell collected data on thephones’ locations Consumers and government officials saw this as aninfringement on user privacy The companies announced that users have theoption to disable these features on their phones, yet this was not entirely truefor Apple Some of its phones continued to collect location information evenafter users disabled the feature Apple attributed this to a glitch it remedied withnewsoftware Both Google and Apple defend their data-collection mechanisms,but many government officials disagree The government is consideringpassing legislation on mobile privacy, actions that could have profound effects

on Apple and other electronics companies

2 Price fixing

- In July of 2013, a judge ruled that Apple had conspired to fix prices on electronic books (e-books) in conjunction with five major book publishers A federal judge ruled that Apple was part of a deal that required publishers to giveApple’s iTunes store the best deals in the marketplace for e-books According

to allegations, Apple allowed publishers to set the e-book prices for the iPad, and Apple received 30 percent of the proceeds (known as the “agency model”) The agency model is thought to be less competitive than the wholesale model,

in which retailers and publishers negotiate on the price However, if a

competitorwas found to be selling the e-book for less, Apple was to be offered the same lower price This scheme is more commonly referred to as a most-favored-nation clause and can beused by companies to dominate the market by

keeping competitors out After striking the deal with Apple, publishers then approached Amazon about participating in the contract Apple denies any wrongdoing and association with this deal and plans to appeal the decision.

3 Rioting

- Because the popular of apple brand and iphone itself, when the iphone 4s released in China there were an enormous crowds were waiting outside for about 48 hours Some of them even camped through night to bought iphone For the time that people couldn’t wait any longer, they began to riot this led to alarm police official They asked Apple not to open the store for safety precautions Customers waiting for the iPhone retaliated by throwing eggs at the store and attacing a mall property manager mistaken for an Apple

employee To their dismay, customers were encouraged to purchase the iPhone online or through other authorized sellers Other stores in Shanghai and one other in Beijing opened as scheduled and quickly sold out of the iPhone 4 S Many questioned Apple’s ethics about how they handled this situation and the dangers to customer and employee safety

4 Sustainability

- Apple has taken steps to become a greener company, such as reducing its environmental impact at itsfacilities However, the company admits that the majority of its emissions come from its products In 2011 Apple stated

its operations contributed to 23.1 million metrictons of gases being released.While 2 percent came from its facilities, 98 percent came fromthe life cycle ofits products Since Apple’s success hinges on constantly developing andlaunching new products, the environmental impact of its products is a seriousissue One practice for which some consumers have criticized Apple is plannedobsolescence— pushing people to replace or upgrade their technology

whenever Apple comes out with an updated version Since Apple constantly

releases upgraded products, this could result in older technology being tossed aside Apple undertook different approaches to combat this problem For one, the company strives to build products with materials

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suitable for recycling It alsotries to build products that last, along withrecycling responsibly To encourage its customers to recycle, Apple created arecycling program at its stores for old iPods, mobile phones, andMaccomputers Consumers that trade in their old iPods can receive a ten percentdiscount on a newer version Consumers recycling old Mac computers that stillhave value can receive gift cards Apple partners with regional recyclers thatcomply with related laws Despite this recycling program, many consumers feeltossing out their old products is more convenient, particularly if they have novalue E-waste remains a significant issue as long as consumers continue tothrow away their old electronics.

- When apple removed 39 products from Electronic Product EnvironmentalAssessment Tool (EPEAT) rating system Many consumers felt Apple might beembracing less eco-friendly products or it was touting itself as being more eco-friendly than it really was Many large buyers such as the city of San Franciscothreatened to drop Apple compuers as a result Apple rejoined the EPEATrating system after consumer feedback indicatedthat dropping the system was a

mistake With sustainability becoming a major concern for many buyers,

Apple must carefully anticipate consumer reaction before implementing similar changes in the future.

5 Intellectual Property

- Intellectual property theft is a key concern at Apple, an issue the company aggressively pursues Apple is serious about keeping its proprietary information a secret to prevent othercompanies from stealing its ideas This led to many lawsuits between Apple and other technology firms In

1982 Apple filed a lawsuit against Franklin Computer Corporation thatimpacted intellectual property laws Apple alleged Franklin was illegallyformatting copies of Apple II’s operating system and ROM so they would run

on Franklin computers Franklin’s lawyers argued that portions of computerprograms were not subject to copyright law At first the courts sided withFranklin, but the verdict was later overturned The courts eventually