This paper examines Apple's ethical crisis stemming from labor violations at its Chinese supplier factories, which came to widespread public attention in 2008 and intensified in subsequent years. Drawing on business ethics frameworks and sources including John M. Kline's work on international corporate decision-making, the paper analyzes the root causes of the dilemma — chiefly the conflict between profit maximization and worker welfare — and evaluates Apple CEO Tim Cook's response. The paper argues that while Apple took some constructive steps, such as joining the Fair Labor Association and hiring Chinese labor lawyers, these measures were largely reactive and insufficient. It proposes stronger alternatives, including supply chain suspensions, direct compensation for harmed workers, and public disciplinary action against responsible managers.
Business and ethics are widely thought to be opposing forces. The goal of business is profit maximization, while ethics constitute a body of rules meant to guide all actions. Traditionally, it has been assumed that ethics hinder rather than support the achievement of corporate goals. However, in recent times corporations and the broader business world have become far more focused on ethical conduct. In the modern world, it pays to be ethically sound and environmentally responsible, because the law increasingly supports workers and consumers in cases of corporate misconduct.
Business executives seeking to integrate an ethical code of conduct into their corporate decisions must navigate two different sets of standards: their own personal ethical principles, and the code of the corporation or industry in which they work. Beyond these, they must find common ground between their own ethical stance and that of related parties — workers, partners, and customers. It is the manager's responsibility to ensure that their decisions do not harm the well-being of any other person, making corporate ethics a complex and demanding discipline. The reach of corporate culture in today's world means that the consequences of corporate decisions are wide-ranging and long-lasting (Unknown, 2006, May 1).
In 2008, Apple faced significant public outcry over its labor practices in Southeast Asia, specifically China. Apple's sales were at an all-time high, but its annual reports highlighted a number of problems in the supply chain. The corporation had established several manufacturing plants in China in order to take advantage of low labor costs.
Several employees lodged complaints against Apple's partner supply firms, and protests were held against the deplorable working conditions in the South Asian plants. It was reported that all of Apple's suppliers had been guilty of violating at least one ethical principle. Company leadership had been aware of certain issues, but when demand for Apple products soared, the supply chain came under immense pressure, resulting in serious injustices and violations of human rights laws. There were a number of explosions and suicides, along with incidents of chemical poisoning in the plants. It was also reported that 90 factories were requiring workers to work 60 hours per week — well over the Chinese legal limit of 40 hours. Apple's own investigations uncovered five incidents of child labor.
In response, Apple's Chief Executive Tim Cook wrote an open letter to employees affirming their value to the firm. He acknowledged that the incidents violated the company's code of conduct and promised to improve oversight at all plants. Apple also revealed the names of all 156 of its suppliers, joined the Fair Labor Association, hired labor rights lawyers from China, began working with environmental groups, and agreed to allow external monitors to inspect its suppliers' factories (Moore, 2012).
The root cause of most ethical dilemmas is the conflict between the interests of different stakeholders. Management must find solutions that address the needs of all stakeholders and distribute benefits equitably (Columbia Encyclopedia, 2012). Apple's interests lay in maximizing production, benefiting from cheap labor, increasing profits, and meeting product demand. The interests of workers were safe, healthy working conditions and fair remuneration. A large portion of the population in developing countries — particularly unskilled workers — seeks employment at multinational firms for better wages and benefits (Columbia Encyclopedia, 2012). Foxconn, one of Apple's primary suppliers, reportedly receives approximately 8,000 job applications per day (Moore, 2008).
According to Peter Drucker, corporations often adopt measures such as extended work hours under the guise of serving the public interest (Wartzman, 2008). Apple's 60-hour work weeks may have been implemented under the belief that doing so would keep customers satisfied and generate greater profits for shareholders and employees alike. Even so, Apple's management ultimately faced the issue directly rather than attempting to justify its actions through a distorted logic of shared interest.
It is important to note, however, that the violations continued for a full year before any corrective action was taken. Action was initiated only when the issue became public and could no longer be contained.
"Critique of Apple's reactive and limited corrective measures"
"Stronger remedial actions Apple should have taken"
Wartzman, R. (2008, December 23). A time for ethical self-assessment. Retrieved August 19, 2012, from Bloomberg Businessweek website:
Unknown. (2006, May 1). Ethical challenges and dilemmas in organizations. Retrieved August 19, 2012, from
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