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Choose Any one Company and Review Its Ethical Practices. Describe Its Ethical Practices and Critically Discuss the Marketing Implications of Its Ethical Standards

By:   •  September 30, 2018  •  Term Paper  •  3,132 Words (13 Pages)  •  26 Views

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Choose any one company and review its ethical practices. Describe its ethical practices and critically discuss the marketing implications of its ethical standards

Word limit: 2,500 words (+/- 10%)

In the 21st century is where globalization is constantly occurring. There are two different types of globalization which either involves production or market. In this paper, we are going to emphasize on the globalization of production which involves company sourcing goods or services from countries across the world to increase their competitive advantages in terms of differences in quality and costing of productions for instance, land, capital, energy or labour force. Even though everything seems to be easily accessible in today’s world due to globalization, there is also a negative aspect caused by it. Take Foxconn, the Chinese manufacturing company which is known for their ability to produce or assemble electronics gadgets with a fox-like speed, as of today they are the world’s top contract manufacturer for electronic gadgets or product assembling. It is widely known that Foxconn is the manufacturer of the smartphone industry giant, Apple as due to the globalization factor.

        How Foxconn secure deals with smartphone giants like Apple is by providing their global customers with speedy volume capability, quality customer service, complete design capacities and also offering them a minimum risk level of investment. This is done by Foxconn either doing their own research and manufacturing their own components or it could be outsourced to other component manufacturing suppliers. Therefore, as Apple takes part in foreign direct investment, they are minimizing the risks they are facing by investing in Foxconn which has their own supply chain. So as Apple outsources jobs to Foxconn China where the labour laws are in a less favourable position for the labour force there, they are also participating in foreign direct investment which is a direct effect caused by globalization. During the release of the white Iphone4, Apple requested for Foxconn to produce white iPhone4 without hindering the production of the black normal iPhone 4 which definitely took a toll on The Foxconn employee’s stress level who was already dealing with sweatshops, working in toxic working conditions hence many of the workers resorting to committing suicide which brought up a huge issue to the ethical practices of the company. As Apple may be following the labour laws within western countries they are working in but globalization has brought a major negative impact onto marketing unethical behaviours towards labour force within the developing countries which can be observed by Foxconn’s unethical treatment towards their labour force and Apple’s nonchalance or even unwillingness to take action regarding the suicide cases in Foxconn. Besides, Foxconn also prefers to hire laborers which are students from universities as they can exploit a legal loophole whereby Foxconn need not sign a labour contract with the students as they are forced by the government to intern at Foxconn factories and hence, the students wouldn’t be defined as a proper employee and they wouldn’t be shield under the protection of the Chinese labour laws including benefits of trade unions which may help to solve work disputes. In Foxconn, the division of labour is so strict that it constantly left workers questioning themselves every day at work and considering themselves as nobodies as they are only working for the benefit of their upper line. So, the harder they work, their superior get better compensation however if they are lacking in their work performance, they would get severe punishments by their line of leaders. As the students work, none of their knowledge from their major would be put into use as they would only be performing repetitive work in a hopeless environment. With the amount of control Foxconn has over their labour and also with how they are exploiting the students, the company is growing at a speedy rate and the cost cutting has actually provided them with more financial gains which leads to Foxconn being able to expand their facilities and carry out even more of their exploitation within the workforce.

        With such business practices, companies like Apple should be questioning whether it would be ethical to invest in Foxconn, however Foxconn has their own method in drawing away attentions of potential business investors. Despite their usual toxic condition manufacturing facility, Foxconn has their biggest manufacturing facility in Shen Zhen which they labelled it as their main campus as that facility as the image they would like to ‘portray’ to their potential investors. It is a manufacturing plant which houses both the assembling factory, their materials warehouse, a twelve-level dormitory, bank, worker care centre, hospitals, post office, library, tv network, fire brigade, book stores, educational institutions and places for entertainment like swimming pool, soccer fields, basketball court, theatres and many more. These extra perks aren’t found in Foxconn’s other manufacturing plant as it is only used as a company model of their investors and this also show us how investors didn’t really care as they would just dismiss unethical practices of Foxconn and all they care about is about cutting cost and maximising profits, leaving the workers to work in an unsafe work environment. Workers are subjected to working overtime, with zero social link and non-existent privacy alongside with extremely low wage rate which may even be lower than the minimum wage rate within Foxconn. Not to mention the toxic working environment includes poor ventilation which leads to sweat shop as every worker are cramped up in a small workspace with high temperature which in the midst of summer in China, the temperature can go up an unbearable 35 degree Celsius in a room and there was an explosion case in Foxconn which involved the injury of more than seventy worker due to the poor ventilation and build-up of aluminium dust. Life within Foxconn is extremely gloomy as workers aren’t allowed to communicate with each other as they might lose their monthly bonus or even received punishments for tiny mistakes. As mentioned before their division of labour is so strict that each tier is forced to treat their inferiors harshly due to fear of being the one punished and constantly under the pressure from their superior so at the bottom line, workers are forced to push their limit at work and not just that, even though the said work hour is eight hours however every worker are imposed with at least four hours of unpaid overtime. Not to mention, their basic wage rate was way below the amount paid at their model campus. Besides, phones or visits from family are prohibited for Foxconn workers and they also have to pay rental to cramp in a small room with six other strangers which we can see both the working or after work condition that the workers face aren’t pleasant. It is clear as to why there were eighteen workers who attempted to commit suicide even until current year as the workers have reached both their psychological and physical limits which leads to them taking their lives be it individually or in groups. All the suicidal cases actually drawn the attention of media coverage which both Foxconn and Apple were bombarded with their unethical behaviour within their business. So, in order to actually solve the issue, Foxconn’s solution was to raise their worker’s pay even though it wasn’t much and Apple actually developed counselling centres for Foxconn workers so there is a go to place for them to vent out rather than committing suicide. With these attempts at them trying to overcome the problem, it is clear that the issue has yet to be solved. There was a noticeable increase in production and workload of Foxconn employees and chances are that it’s to offset the costs of the company to increase the wage rate and the counselling centre. Therefore, it is actually worse than how it was for the workers. After receiving the pay raise, the product output had increased an extra 1280 cell phone cases which needless to say, the workers were pushed even harder at work.

        In order to make a change for Foxconn, the change must come from the demand source, which in this case it would be Apple as usually companies would only answer to their stakeholders or those in power to influence the financial position of the company. As we all know, Foxconn follows the Milton Friedman Doctrine which is argued that companies shouldn’t have social responsibilities to society or general public as their only concern is to maximise profits for themselves and their shareholder. It is stated that the only social responsibility of a business is to engage in activities and fully utilise its resources to maximise their profit as long as they follow the law. Some says that companies shouldn’t only listen to the ones who own majority of the stocks but instead, they should also take into consideration of the workers themselves as they are the ones actually trying to generate profit by making the production possible. Therefore, companies should attend to both the needs of primary and secondary stakeholders but most companies would only see the shareholders as their stakeholders. However, there is actually one way for the company to change how Foxconn carry out their business operation which is by keeping them from making profits as money, is the most useful tool that consumers have to go against companies as consumers are the key to Foxconn profit. So, by cutting off their financial supply, consumers are the one who hold the corporate change on their hand however this may be one of the toughest way to solve it as majorities had became enamoured with Apple’s product and it would be hard for them to opt for another brand just for the sake of these workers as everyone is selfish. As we can see from Apple’s increasing sales year after year, it is already clear that Apple wouldn’t put effort in doing much unless forced to as the reason why they aren’t selling more is due to them not being able to produce fast enough for even more production. When the current CEO of Apple, Tim Cook replaced the deceased Steve Jobs, he stated that Apple takes working conditions for workers seriously and that Foxconn was an excellent facility which attends to the need of their worker and that Apple wouldn’t accept their business partners on cutting corners for profitability. This statement was obviously unreliable as the only attempts which Foxconn did to try and eliminate the suicides from occurring was placing bars over all the windows and also placing a large net surrounding their manufacturing facilities which in another way is boxing in their staff even more and making the situation worse. Under usual circumstances, local factories would try to earn as much money and try to gather more attention in order to ensure that the government would invest into the corporates however it is shown over time that the Chinese government is unwilling to do so as to try and keep their cost down and also to prevent the foreign direct investment from slipping away which may directly affect their country’s gross domestic product so there is even more of a reason for Apple’s secondary stakeholder, the consumers to make a change themselves to try and demand change for Foxconn’s unethical business behaviour.

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