The historic debate regarding corporate ethics and responsibilities is multi-faceted, with academics including Friedman (1962) (Shareholder theory) and Freeman (2001) (Stakeholder theory) rigorously contesting the responsibilities and primary objectives of the organisation itself. As the footprint of modern enterprise has expanded globally, visionary models of responsibility and ethical accountability such as Carroll’s (1991) pyramid have drawn distinctions between the economic, legal, ethical, and philanthropic responsibilities of the firm. Based upon underlying ethical and moral constructs of deontology (Kant, 1956), utilitarianism (Mill, 2014) and virtues (Aristotle in Sherman, 1989), the debate regarding the responsibilities of the firm continues to evolve towards universal, rather than situational or organisational, rights and protections. This investigation will critically explore the unethical behaviour exhibited at Apple and its downstream suppliers in the past decade, highlighting the ways in which specific partnerships, business agreements, and exploitative practices failed to meet the diversified requirements of ethical business practices.
2 Problem Summary
In 2010, Apple released a press statement admitting that child labour had been used in three of its factories (Moore, 2010). Although the majority of Apple’s manufacturing activities originate in China, the report did not further define the offending locations or assign blame to any individual operator or subcontractor (Moore, 2010). In the same year, highly public revelations were made regarding worker treatment, dissatisfaction, wages, chemical exposure, and suicide rates (Moore, 2010; Bilton, 2014). Although Apple’s manufacturing standard is predicated upon third-party contracts and a robust framework of performance expectations, the revelations indicated that the organisation was continuing to partner with offending organisations like Foxconn and Wintek in spite of their mistreatment of employees.
3 Justification of Unethical Behaviour
Kantian ethics prioritise universal respect over economic achievement and capitalistic endeavours (Bowie, 2017). The respect for persons principle, for example, informs managerial ethics, mandating that stakeholders are respected and treated with dignity, thereby challenging decision makers to engage in rational, self-governing decision making (Bowie, 2017). This deontological approach to ethical responsibility emphasises an underlying duty to employ a ‘set of a-priori moral rules’ that can be translated consistently and universally across all ethical problems (Crane and Matten, 2016, p. 101). As this ethical perspective does not exist on a case by case or situational basis, then the justification for unethical behaviours cannot be based upon the immediacy or significance of the decision itself (Schwartz and Carroll, 2003; Crane and Matten, 2016). For Apple, the underlying imperative of productivity or output volume, therefore, could not be introduced as an argument for the ethical and appropriate employment of child labour in device manufacturing in China (Moore, 2010).
One of the problems with the unethical employment practices in Apple’s Chinese production facilities is that they violate Kantian principles of dignity, honour, and universal human rights (Bayefsky, 2013). By definition of being human, Kantian ethics implore corporations and their decision makers to respect and protect the universal human rights afforded to all humans (Hill, 1980). The problem with this argument in Apple’s context, however, is that if the conditions afforded to factory workers are sufficiently better than the conditions afforded to other members of society, then the argument could be made that even though they are not ideal, the treatment of the workers is superior to that of broader society. By avoiding the ‘treatment of humanity as a means’, then Kant argues that businesses are responsible for treating’ humanity as an end as well’, compelling the decision maker to weight the underlying advantages of employment from the perception of the employee (Hill, 1980, p. 88). Exploitation and unethical behaviour, by this expectation, would be nullified if the individuals in question were indeed achieving outcomes that were equal to or superior their target ends; however, at the same time, exploitative standards which fail to attain a minimum standard of worker welfare violate the underlying code of corporate responsibility, and are thereby unethical.
Due to the complexity of the debates surrounding Kantian ethics and corporate responsibility, it is possible that they may be a way to simplify the ethical interpretation of Apple’s behaviours in relation to a generic framework of optimal utility. Under the generic constructs of Mill’s and Bentham’s utilitarian ideal, any corporate decision that invokes pain or suffering upon its stakeholders is unethically and simultaneously immoral (Sandel, 2009). However, where that decision facilitates happiness for the broader majority, then hedonic benefits can be quantitatively weighed against the marginal consequences of human suffering in order to justify opportunism (Sandel, 2009). Some the most critical violations of employee rights revealed in Apple’s recent supply chain audits were the humanitarian conditions found in spot and undercover assessments of factory floors and employee housing across factories in Shanghai (Bilton, 2014). With workers forced into involuntary overtime, unsafe conditions observed within the production lines, and housing conditions described as inhabitable and overcrowded, the pressure to expedite production and maximise efficiency has resulted in unethical failures at Apple (Bilton, 2014). Whilst a utilitarian argument might suggest that their own general satisfaction with the conditions or the nature of the work itself is sufficient to justify the ethical nature of Apple’s actions, the ‘economics of responsibility’ (e.g. productive efficiency of responsible outputs is more important than exploitation of workers) impose a more robust standard of practice and humanitarian oversight which confirms that Apple’s exploitative factories are inherently unethical (Secchi, 2007, p. 351).
As a proponent for its own underlying ethical virtue, Apple continues to argue that its practices are both responsible and sustainable, positively impacting the broader global economy. Merchant (2017) reports that Apple has routinely applied a range of generic arguments, such as the fact that the conditions at its factories are superior to the conditions at the factories of other regional production companies in China, in order to justify its practices. Virtue ethics, within this context, suggest that ‘the character of the moral agent’ is the driving force underscoring ethical behaviour; and as a result, by adhering to a core CSR protocol, then the virtues of the organisation (Apple) are transferred to downstream suppliers (Chakrabarty and Bass, p. 496). When an organisation like Apple violates the extolled virtues of its CSR protocol, however, such as in hiring child labourers or in severely polluting the regional environment, then it becomes evident that unethical decisions and un-virtuous behaviours have been realised (Mackey, 2014).
4 Solutions and Interventions for Unethical Behaviour
For many companies like Apple, emphasis continues to be placed upon maximising shareholder value, a core tenant of the Friedman (1962) framework of responsibility which advocated the importance of profitability and shareholder wealth. In February of this year, Apple’s stock price reached its highest price ever, expanding its market value to more than $700 billion, and establishing its identity as the world’s most valuable company (Rossignol, 2017). In June of this year, Merchant (2017) reported on conditions at Apple’s largest Chinese manufacturing partner, Foxconn, an organisation that employs more than 1.3 million people. In spite of widespread media publications about the high pressure work environment, the high rate of worker suicide, the long hours with minimal pay, and the stark and uncomfortable living conditions for Foxconn workers, the Merchant (2017) report revealed that little had changed in more than 7 years of corporate and global awareness. With workers reporting that most employees do not last more than a year at Foxconn (Merchant, 2017), it would be hard to argue that Kant’s means and ends were sufficiently addressed within the annals of Apple’s evolving CRS plan. Further, the repetitive, low-pay, high-volume work with severe consequences (e.g. public shaming) for under-performance has resulted in an autocratic governance standard that not only eliminates much of the humanity from the workers, but leads to a variety of health and mental illnesses (Merchant, 2017). As a result of an increased volume of sales over the past year and a diversified range of products being produced by Apple, it is unlikely that these unethical and inhumane, slavish conditions will be resolved in the near future.
Perhaps, if Apple’s upper management could explore new standards, codes, and practices that could be translated into downstream requirements for suppliers like Foxconn, the plight of the faceless, numerically identified worker could be improved. At the root of the ethical corporation is a framework of principles, values, or commitments which prescribe what Freeman (2001) introduced as corporate social responsibility (CSR). This stakeholder-oriented agenda avers unethical behaviours, and establishes a transparent code of ethics that can be translated into international monitoring and responsibility regardless of activity or scope (Freeman, 2001). For Apple, CSR remains a key component of the annual report, providing investors and interested stakeholders with evidence of commitments and improvements, whilst limiting the need to debate other unethical business practices. Citing increasing awareness in the distinction between ethical and unethical business practices, Vogel (2008) describes the economic, social, and oftentimes, political advantages of CSR in practice. By focusing on stakeholder interests, rights, and needs, corporations increase their underlying awareness of those factors that could potentially compromise ethical activities, whilst simultaneously identifying waste streams, inefficiencies, and externalities that can be reduced in order to increase profitability and performance (Vogel, 2008).
Beyond the immediacy of worker care and workplace safety, Apple is also confronted with the broader externalities of its operations: The environmental impacts from its factory operations, heavy metal mining, and global transportation network (Merchant, 2017). From a utilitarian perspective, Apple could argue that the broader self-interests of the global community are being served by producing an in-demand, high-value, high-technology product. Kant has rejected utilitarianism, arguing that by ‘resting rights on a calculation about what will produce the greatest happiness, utilitarianism leaves rights vulnerable’ (Sandel, 2009, p. 106). Due to the universal fact that humans are afforded dignity and respect by virtue of being human, placing the weight of one person’s interests over another’s is unethical and a violation of individual rights (Bowie, 2017). However, as social values, morality, and ethical responsibility vary according to society and community, Mackey (2014) argues that corporations must continue to amend their ethical agenda in ways that mirror the underlying regional expectations. These diversified ‘moral narratives’ create a variety of rules and institutional guidelines which serve as general, rather than universal definitions of ethical behaviour (Mackey, 2014, p. 143). As a result, Apple is able to manifest ethical responsibility in its activities in foreign nations by adhering to their basic understanding of human rights and domestic practices; however, when the outputs of such labours are transferred to countries and communities with more overt, explicit, and targeted expectations of accountability, the best-fit solution is inherently fallible. For this reason, CSR must involve a persistent and progressive evolution of corporate, industry, and national definitions of ethical behaviour and practices, thereby holding companies accountable to a progressive, idealised standard of responsibility.
This investigation began with the repercussions of a global outcry regarding Apple’s the treatment and exploitation of workers throughout its Chinese facilities. The evidence gathered through investigative reporting and Apple’s own internal audits has revealed that not only did Apple partner with manufacturers who were exploiting workers in a variety of ways, but that the company knowingly continued to engage these partners in production and assembly in spite of their actions. Whereas Kantian deontology would argue that there is a universal framework of rights and respects that should be afforded to all humans, the utilitarian school of thought embraces the contributions of productive economic activity to the broader benefits of human existence. Virtue, a precondition of CSR assessment and reporting practices, revises the responsibilities of the corporation, but fails to address the core limitations of an internationally segmented standard of ethical and moral responsibility. As a result, corporations like Apple are compelled to achieve their best possible state of citizenship and stewardship within the ethical limitations of a diversified global community of social agents. These findings argue that Apple has indeed acted unethically in its employment of corporate partners that exploit labourers and pollute without regard for human health; however, they also suggest that by developing tactical strategies that address specific ethical concerns (e.g. child labour, working conditions), the company is fulfilling its under-defined role as a corporate citizen and agent of economic advance.