Apple's chief supplier in China is Foxconn, a Taiwanese subcontractor that employs 1.2 million workers across China.

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Apple's chief supplier in China is Foxconn, a Taiwanese subcontractor that employs 1.2 million workers across China.

Following a spate of suicides at Foxconn factories, reports in the media described in graphic detail harsh work conditions at Foxconn plants. In response, Foxconn equipped employee dormitories protective nets and hired mental health professionals. However, part of the blame was also put on the shoulders of Apple. The media alleged that the firm was making immense profits on the back of maltreated Chinese workers. The negative publicity triggered worldwide protests against Apple.100 One article that appeared in the New York Times in January 2012 reported the results of a lenghty investigation into the manufacturing practices of Apple suppliers in China.101 Adding up the toll from a combination of factory explosions and suicides cited in the article, 23 people died, and 273 were injured to build iPhones or iPads in China between 2008 and 2010. The article generated 1,770 reader comments. Some samples: “This is modern day slavery.” — “This is outrageous! I don't think I will be buying any Apple products.” —

“After reading this story, I am ashamed to admit that I own Apple computers.” The article pointed out that Apple did conduct supplier audits and published the results on its website. At the same time, Apple was pushing its suppliers to manufacture huge volumes with little notice at very low costs. One former Apple executive commented:

“You can set all the rules you want, but they're meaningless if you don't give suppliers enough profit to treat workers well. If you squeeze margins, you're forcing them to cut safety.” Still, Apple remained one of the most admired consumer brands. A national survey conducted by the New York Times in November 2011 found that 56 percent of the respondents could not think of anything negative about Apple. 14 percent mentioned that the worst thing about Apple was that its products were too expensive. Only 2 percent mentioned overseas labor conditions. Should Apple be concerned? As a consumer, would you be willing to pay even more for your Apple gadget to remove pressure from its suppliers? Or would you even contemplate a boycot of Apple products to get the firm to force its suppliers to give workers better working conditions? Justify your standpoint.

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Global Marketing Management

ISBN: 9781118466483

6th Edition

Authors: Masaaki Kotabe, Kristiaan Helsen

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