Thursday, February 24, 2011
Apple's Double Lesson
Reports began surfacing in mid February resulting in a New York Times article about the poisoning of employees and hazardous working conditions at an electronics factory in China. According to Apple's review of labor conditions at its international suppliers, 137 Wintek employees were affected by the poison n-hexane used in creating the iPhone glass screens. While the NY times article discusses what is being done, it is interesting to note one of the author's broader points. David Barboza hints at possible problems faced when working with suppliers - namely that they can affect your business with more than just the material they are providing. An unethically operated supplier can tarnish your company's image, which in practical terms can lead to lawsuits and a devaluation of stock prices. While Barboza's point is insightful, it is only once aspect of the supplier-firm relationship. According to the article, Apple had "ordered the contractor to stop using the chemical and to improve safety conditions at the plant." This showcases the power struggle aspect in the supplier-firm relationship. A firm's competitiveness and profitability is due, in no small part, to whether or not it is dominant over its supplier. In this case, Apple is clearly dominant in that it not only has the power to hold annual reviews of working conditions in companies other than itself, but also has the power to mandate operation practices at companies other than itself. This dominance is presumably due to the extremely high revenue Apple brings in from it's large order volumes. The fiasco has thus highlighted for Apple, and all businesses dealing with suppliers, two important aspects of business relations.
Subscribe to:
Post Comments (Atom)
Interesting read. It is definitely hard to patrol supplier's thousands of miles away unless you have someone on the ground there inspecting every moves - which can be a burden. If the supplier was honest, and did what Apple wanted then there would be no need for extra inspections... But Apple does have to be careful. They are such a big company, that even though they did tell the supplier to stop using the material, the fact that people are still being poisoned is bad press.
ReplyDeleteWhat to do? When profit margins are at stake, human rights and the workplace go out of the window when you're dealing with cheap labor.
It's true, when profits enter the picture, human rights and work conditions take a back seat, and any sound company is going to have their profits come first.
ReplyDeleteHowever unethically operated a supplier may be, if they're offering the best price, you can bet most businesses will turn a blind eye if they even bothered to look. Apple apparently isn't above being on that list.
It's the sad truth about doing business anywhere. Companies are going to cut costs where they can and find cheap labor to do the job and nothing is going to change with suppliers unless companies take a stand and refuse those kinds of business relations. Which they won't anytime in the near future (or ever) if the price is right.
I feel there isn't much that can be done about this situation. Even if Apple were to drop the supplier completely, the poor conditions would not just cease to be. Most companies in America, especially in the tech industry, are supplied by cheap labor in foreign countries. Its a sound business decision, simple as that. While it is terrible what these workers go through, I feel that its just the product of their company policies and ethics. Even if Apple tells them to stop using that one chemical, it won't solve all of their problems. There needs to be regulations and inspections in order to stop this kind of thing from happening.
ReplyDelete