APPLE’S ETHICAL PROBLEM

Introduction

The interdependence of the contemporary global economy has made international business to operate in a market influenced by national political and cultural diversities (Kline,         2010). Over the recent years, foreign enterprises have grown enormously, spurring debates over the normative standards that should be enacted to guide business decisions.  For local and international businesses to operate efficiently and effectively, there is a need for a societal foundation of ethical values. Ethical values are concerned with the nature and justification of the right actions meaning that businesses need to identify values for guiding actions in the present and the future (Kline 2010). There is a need for firms to embrace international business ethics which simply refers to the comparing various business practices as well as their consequent ethical evaluation in different nation-states (De George 1994).

International business ethics investigates the ethical norms commonly recognised in all countries which should govern the operations of various international businesses and economic transactions. It looks at the variations in ethical standards and assesses whether global firms are bound by social and business norms of either their home country or the host country (De George 1994). One major role of international business ethics is to ensure that all multinationals embrace corporate social responsibility as they interact with various stakeholders in different levels including governments, suppliers, subcontractors and individual employees. This essay aims at assessing ethics in international business by drawing from the case of Apple in Foxconn factories and applying the Kantian deontological theory.

The case of Apple in Foxconn factories

International business often impacts on other people and cultures given that companies do not operate in a vacuum and most international management decision making usually involves interaction with local politics and stakeholders. All businesses have a potential of impacting either directly or indirectly local and national communities. Many at times, firms engage in activities aimed at maximising short time strategies which end up severely clashing with ethical dimensions governing the moral norms and well-being of the society.

The case of Apple reflects an ethical clash as a result of its international operations in the company’s Foxconn iPhone factories in China and around the globe (Barboza2018). Apple is known to be one of the most influential, profitable and successful global enterprises in the world. There is no doubt that the company’s power and profitability came about in the last decade partly due to its ability to master the global manufacturing and strategic choice of suppliers in China and other parts of the world (Barboza2018). However, Apple’s success in the global supply chain has been faced with severe ethical challenges mainly due to the often reported violent riots, workers suicides and other considerable issues including the substantial adoption of robots and massive employee layoffs. Apple has always denied involvement in unethical business by often arguing that its suppliers entirely run the factories it outsources from and therefore, it does not bear any ethical responsibility.   Moreover, Apple claims that its direct employees are always thriving and prospering under good working conditions (Barboza2018).

The Kantian Deontology

The case of Apple can be argued through the Kantian deontological perspective which denotes that the highest good is goodwill. Kant argued that acting from goodwill is acting from duty, and therefore,  it is the intention behind an action that makes an action good and not its consequences (Bowie, 2002). The Kantian morality distinguishes between two particular duties and imperatives. One type of imperative is the hypothetical imperative whereby we do something so that we may achieve something else. The other duty which Kant advocates for is the categorical imperative that is based on the requirements of reason. Kant entirely advocates for the ethics of duty as opposed to the ethics of consequences (Bowie, 2002). An ethical individual is, therefore, one acting while having the right intentions in mind and through free will.

The application of the Kantian deontology in the case of Apple

The Kantian approach is mainly concerned with the rationality of a company and the notion that companies should make right decisions for the right reasons. According to Kant, a company ought to be moral for the right reason and not for the sake of self-interest (Bowie, 2002). By drawing from the Kantian theory, it is clear that Apple’s practices are unethical given that it uses factories in China for self-interest without caring about the poor working conditions and illegal overtime. Apple violates Kant’s belief that a business needs to exercise good deeds not only for its employees but also customers by having the right motivation for its actions. This can be explained by Kant’s formula of humanity which denotes that we should treat humanity as an end and not just as the means (Bowie, 2002). This implies that Apple should care about the manner in which its products are being manufactured by the Foxconn factories in China and other suppliers all over the world.

The outsourcing of products from factories with unfair working conditions in order to maximize profits is highly unethical by reason of not only the Kantian theory but also the utilitarian theory and Aristotle’s virtue theory. The deontological theory emphasizes on three major precepts which Apple seems to be violating; treating stakeholders as persons, treating a business firm as a moral community and ensuring purity of motive (Bowie, 2002).

Treating Stakeholders as Persons

According to Kant, all human beings have free will, can act by the laws of reason and have dignity or a value that is beyond money (Bowie, 2002). Therefore, it is wrong for an individual to use another person to just satisfy their own personal interests (Bowie, 2002). It should be noted that the principle of having respect for other people is not meant to prohibit financial transactions just because, in voluntary economic exchange, no one is used as a mere means as both parties benefit. This particular formulation plays a significant role in constraining the nature and manner of undertaking economic transactions. To fully understand why Apple’s position demonstrates an apparent weakness in serving the common good and exercising ethics in its international business, it is critical to draw from Kant’s negative and positive freedom.

In this case, contrary freedom implies discharge from both coercion and deception. Drawing from the formula of humanity, we can describe coercion and deception as the most basic forms of an unethical conductor, in other words, the roots of all evil (Bowie, 2002). The use of coercion and deception is against ethical business principles and conditions of assent. Physical coercion treats an individual as a mere tool while lying undermines an individual’s reason for treating it as a tool. Apple depicts the use of coercion and deception through its suppliers by being a highly demanding client without caring about the employees’ working conditions. While negotiating contracts, Apple allows the suppliers only the slimmest of profits thereby forcing them to take harmful shortcuts by using less costly chemicals as opposed to expensive alternatives and coercing workers to work for long hours rapidly. The company’s suppliers denote that, “the only way one can make money while working for Apple is by looking for ways to increase efficiency or doing things cheaply” (Barboza2018).

The Kantian deontology denotes that respecting the humanity in a person goes beyond desisting from coercive and deceptive acts (Bowie, 2002). There is a need for additional requirements as stipulated by Kant’s perspective on positive freedom which refers to the freedom of developing an individual’s human capacities. This implies merely the development of rational and human capacities and not doing anything that can diminish them. Therefore, treating humanity not as a mere means but an end, in the case of Apple requires two significant things. Firstly, it needs Apple not to use people in its business relationship by refraining from deception and coercion. Secondly, it implies that Apple should arrange its business practices to contribute to rational and moral capacities instead of inhibiting these capacities. The use of a poisonous chemical namely, N-Hexane at one of Apple’s major manufacturing partner, Wintek is a good example of how Apple has failed to treat its stakeholders as persons (Myers and Fellow 2014). Wintek began using n-hexane in early 2009 to speed up production at its East China LCD plant after acquiring a large order. N-hexane which was used as a cleaning agent of the touchscreens was found to be a narcotic that attacks the nervous system of individuals exposed to it (Barboza2018). Despite activism from workers and the fact that Apple was aware of the inhumane situation at Wintek factories, the company failed to appropriately and promptly react to the matter. Rumours about the use of n-hexane began spreading in 2009, but Apple was slow to take action against its manufacturing partner Wintek. The company only mentioned this situation in 2011 at its annual review of the labour conditions in its global suppliers (Myers and Fellow 2014).

There has also been a significant concern regarding the heavy use of robots and massive layoffs in Foxconn’s iPhone factories in China, an aspect which raises questions about the immorality of Apple. From a Kantian perspective, the layoffs can be labelled as immoral since the factory workers are merely used as a means for enhancing Apple’s wealth (Bowie 2002). A critical assessment of the employer/employee relationship as well as various contractual agreements reveals an aspect of deception and coercion from Apple thereby making the layoffs unethical and immoral. The requirement of Kant’s deontology that business practices should be able to support positive freedom implies promoting meaningful work. From a deontological perspective, useful work can be defined as one that is chosen freely and gives the workers an opportunity to exercise job autonomy (Bowie2002). It should support the rationality of human beings by enabling workers to develop rational capacities and morality. Meaningful work also ought to provide sufficient salary that can give employees an opportunity to exercise dependence, provide for their physical well-being as well as satisfy their desires.

Treating a Business Firm as a Moral Community

Drawing from Kant’s third categorical imperative, individuals should act as if they are members of an ideal kingdom (Bowie 2002). Companies such as Apple and Foxconn comprise of persons who must be treated with dignity and respect. Additionally, the rules governing an organisation need to be ones that can be supported by every individual in the company. Kant draws from this universal endorsement to denote that every person is both a sovereign and subject with regard to the rules (Bowie 2002). A Kantian approach to organisational design advocates for various principles. One major principle is that a business firm needs to take into consideration the interests of all the impacted stakeholders in making any decisions. This implies that in making contractual choices with suppliers such as Foxconn, Apple should consider all the affected stakeholders including Foxconn employees’ working conditions. Another principle is that a firm needs to have all the individuals affected by its rules and policies participate in their determination before their actual implementation. However, this is not the case in Apple whereby only the interests of one stakeholder are prioritised. In a given situation where the interests of different stakeholders need to be subordinated, the decision should not be merely because one group of stakeholder is supreme than the other. It should also be known that every profit-making business is equipped with a duty of beneficence and procedures must be established to ensure the relationship between various stakeholders is governed by rules of justice (Bowie 2002). The beneficence factor here implies that since Apple benefits from its suppliers, it has a duty of beneficence to these particular suppliers. It also implies that since the Apple benefits from the society which provides the necessary means for enforcing business contracts and the required infrastructure and perhaps, most importantly, a skilled workforce, it should reciprocate through corporate social responsibility. Apple has failed to reciprocate CSR through its supply chains since it does not care about the employees’ working conditions and continuous to outsource products from manufacturers practising unethical business practices such as child labour. In 2012, Foxconn admitted to the use of child labour at one of its facilities through internships that were targeted at students below the legal working age in China (Myers and Fellow 2014). The fact that Apple was aware of the practice of child labour by its supplier and failed to promptly take action reveals that it is an irresponsible global firm.

The Kantian deontology sees an organisation as a moral community with each member of such an organisation standing in a moral relationship to all other members (Bowie 2002). The managers of an organisation have a moral obligation to respect the humanity of all individuals in the organisation. On the other hand, each employee also needs to view the organization other than a mere means of accomplishing personal goals. The organisations are a means of the accomplishment of goals, and therefore, a person who views them as purely instrumental in nature is not in line with the “respect for persons” principle. The principles of a moral firm as stipulated by Kant advocate for the adoption of a theory Y in organisations instead of theory X (Bowie 2002). Theory X denotes that employees inherently dislike work and tend to avoid it if possible. Theory Y, on the other hand, stipulates that workers prefer to act creatively and are willing to take responsibility. Kant’s ethics tends to act as a moral critique of the authoritarian hierarchical organisational structures (Bowie 2002). It calls for the involvement of all stakeholders as well as the vast democratization of the workplace. According to Kant’s moral philosophy, all individuals in a given firm need to be represented by a stakeholder group as a minimum condition for democratisation. These stakeholder groups also need to agree to the various rules and policies governing the firm (Bowie 2002).

Ensuring Purity of Motive

One major tenet of Kant’s moral philosophy is that an action can only be treated as truly moral if it is morally motivated (Bowie 2002). The self-interest morals cannot pollute those actions that are truly moral. In this sense, Kant is implying that business actions need purity of motive. Looking deeper into this issue, individuals usually assume that those actions which are likely to enhance the bottom line are pure acts of self-interest for the firm. However, this is not entirely true for those companies that are publicly held since they are obliged to make profits, fulfil legal obligations to shareholders as well as satisfy their implied contract to the general public. Therefore, it is not totally unethical for managers of Apple to strive for profits. In this case, the aspect of Apple striving for profits can be seen as a moral one even for the strictest Kantian. In doing this, the company is purely honouring its obligation to its stakeholders of realising profits. Therefore, Kant’s notion should not undercut the acts of corporate beneficence which make an important contribution to the bottom line (Bowie 2002). Perhaps, one way through which Apple has failed to ensure purity of motive is by allowing its major supplier Foxconn to act unethically. For instance, Apple has received several reports of forced overtime at Foxconn’s Shenzen plants, but it has failed to take action. Foxconn has been continuously under the spotlight from various media sources mainly for lousy working conditions such as overworking its employees to even a point where some of them have ended up committing suicide.

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For example, in 2010, 17 Foxconn employees attempted suicide out of which 13 were successful (Myers and Fellow 2014). This alarming rate of deaths raised questions on the working conditions of Foxconn employees and later on, there were demonstrations against Foxconn and Apple which led to ritual burnings of iPhone pictures. An investigation found out that the suicide incidences were as a result of bad working conditions and overwhelming overtime hours forced into the employees. China’s labour laws allow maximum overtime of 36 hours per month, but Foxconn employees reported being forced to work up to 80-100 hours per month, sometimes without even being paid (Myers and Fellow 2014). Surprisingly, Apple is aware of the inhumane working conditions of Foxconn’s workers since most of these reports have been publicised but has failed to act in line with Kant’s purity of motive.

Kant’s focus on the purity of the moral motive has a positive impact on business ethics, and it is not just merely a barrier that needs to be overcome (Bowie 2002). To enhance the bottom line, Apple, perhaps, needs to focus on various aspects other than small profits such as increasing employees’ working conditions, ensuring a democratic workplace as well as formulating non-deceptive and non-coercive relationships with its suppliers. A majority of management theorists always encourage business organisations to focus on the bottom line. However, a Kantian approach stipulates that profits can still be enhanced without exclusively focussing on the bottom line (Bowie 2002). In the case of Apple, this implies that profits can even be increased if the company starts concentrating on respect for the humanity of all persons and stakeholders. Profits should be viewed as an outcome of ethical business practices and not as the goal that must be achieved by all means.

Conclusion

In summary, there is a need for global firms to embrace international business ethics by engaging in corporate social responsibility as they interact with different stakeholders such as the suppliers, subcontractors and individual employees. The case of Apple, which is one of the most valued companies in the technology industry, reveals the need for companies to act ethically and exercise care for all stakeholders. Apple has been using suppliers in China such as Foxconn to produce some of its products at reduced costs. However, the working conditions in these supply chains have not been conducive, an aspect that has often led to violent riots and employee suicides.  Apple has always denied moral obligation about its role in overseeing its suppliers’ activities.

Drawing from the Kantian deontology, the company’s position depicts a weakness and lack of care for serving the employees’ common good and being a global ethical firm.  The Kantian perspective on businesses is that they need to do good not only for their customers but also other stakeholders including suppliers and employees. This is about the formula of humanity which denotes that humanity should be treated as an end and not just as a means. By this theory, Apple is acting unethically since it is only concerned about massive profits while ignoring the poor working conditions of its suppliers’ employees.

References