Business Ethics: Apple's Stakeholders and Samsung's CSR

This article discusses the business ethics of Apple Inc. and its consideration of different stakeholders. It also explores Samsung's corporate social responsibility initiatives and sustainability efforts.

Running Head: BUSINESS ETHICS 0
BUSINESS ETHICS
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3/15/2019

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Contents
Introduction......................................................................................................................................2
Apple’s business ethics considering different stakeholders............................................................3
CRS and sustainability of SAMSUNG............................................................................................6
Reflection of experience..................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
Professional or applied ethics where the morals and ethical principles that are assessed or ethical
issues can be formed in an organizational environment are said to be business ethics. These are
applicable to all the aspects of business and are significant to every individual conduct and the
entire company’s conduct. This also includes a proper study of business practices and policies
related to any controversial issue that could be raised like insider trading, corporate governance,
discrimination, sustainability, bribery, and corporate social responsibility of the company.
Business ethics of a company is either guided by law and at times, this act as a framework for a
business to follow, for gaining acceptance from the public (businesscasestudies, 2018). For better
understanding Apple Inc. case would be considered in the report for discussion.
Apple Inc. is one of the largest information technology companies worldwide considering its
revenue. It is an American multinational company founded in 1976 by Steve Jobs, Ronald
Wayne, and Steve Wozniak. The company sells computer software, consumer electronics, and
online services headquartered in California. It is one of the large four of the technology
companies along with Google, Facebook, and Amazon. Its various consumer electronics
products include Mac, iPad, iPhone, Smartwatch, TV, and music. The company has considered
various values related to supplier responsibility, privacy, environment, and diversity. Moreover,
the company has a strong corporate culture with a very skilled workforce, responsible for the
success of the company. The ethical issue of the company and its major competitors would be
included in the report further (Choi, 2015).

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Apple’s business ethics considering different stakeholders
Considering the ethics, the company has attempted to ensure that its suppliers, employees, and
other partners with whom the company works are responsible for the proper conduct of business
in all situations. The company has focused on high-quality products, creating innovative services
and products and responsible for integrity in various business interactions. Integrity’s four major
principles of the company include respect, honesty, compliance, and confidentiality. The
company in order to handle any issue or misconduct has provided a business conduct helpline,
which the employees of the company can utilize for reporting the misconduct to finance
committee of the company and Apple’s audit (Chung et al., 2015). However, the company has
faced the various ethical issue in previous years and has attempted to address the issue with due
diligence. Some of these issues that were related to various stakeholders include:
1. Privacy
In consumer electronics, privacy plays an important role in consumer protection, as
Consumer tracking could be one of the ethical issues. Since the social network has
emerged, the companies are easily able to track the customers through the use of the
internet. The companies were found it beneficial to understand the consumers better and
use it for marketing. In 2011, government official and the consumer found this to be
unethical and breach of consumer privacy by technology companies like Google and
Apple (Ferrell et al., 2015). The company attempt to add an option for the consumers to
disable the location features on the phone, which wasn’t found to be true to a greater
extent from the iPhone. Thereafter, to handle this misconduct, the company introduced
with new software, which was responsible for disability function got to be used
appropriately in the iPhone to save the consumers from the breach of privacy. Moreover,
this software was also responsible for enhancing the Wi-Fi security and also makes the
default option of the location to be disabled in the smartphone, which means the customer
specifically has to enable it on their devices as per their will. Considering the ethical
theory, one of the theories that would be applicable to the issue would be Utilitarianism
theory that is taking the greatest action in favor of a maximum number of people
(Dustershoff & MacGregor, 2014).

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2. Price fixing
This was another allegation on the company included an ethical issue of Apple. The
allegation included that the company has done price fixing ion ebooks, considering the
five major publishers. Considering another stakeholder of the company, that is publishers.
As per the allegation, the publishers have had the authority to set the prices of e-books for
the iPad. This was also affecting other competitors, as the apple was offering for lower
prices in case the competitor was found to be selling form lower rate. This issue for
handled in the court, as he has faced the fines of 450 dollar million for setting out the
agreement. The company denied acknowledging any wrongdoing, although it accepted
the deal with the association to set the prices of e-books. The appropriate ethical theory
for this ethical issue would be deontology theory, which says to fulfill the duty in concern
for self and others (Gencer, 2017).
3. Rioting
This ethical issue would be considering two major stakeholders, that is the customers and
employees of the company. Apple halted the sale of I phone four in 2012 in the retail
store of China, where the customer wanted overnight outside the store. The customers
were so much rot that they tried to be physically outside the store through eggs at the
company’s store and attempted to damage the mall property due to this reason. This was
a crucial aspect for the company, as it can be dangerous for the employees of the
company. Moreover, the situation was so messed up that the police have to control the
public who suggested the company to not open the store. To handle this ethical issue, the
company initiates to encourage the customer to go for the online purchase or go for
another store in Shanghai. The business ethical theory approachable to this ethical issue
would be egoism theory that is taking action which will be based on rational self-interest
(Hower, 2018).
4. Sustainability
Considering sustainability, the company initiated the action to be taken for a greener
company and attempt to diminish the environmental impact. The company founds to be
guilty for the carbon emission due to its operations, from its products. Moreover, the
company was accused by the customer that the company has planned to obsolesce; which
means that the company is pushing the customer to upgrade the technology, and making

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the previous technology would be tossed aside (williams, 2017). Apple considers various
aspects to resolve this issue, for instance, the company starts creating more long-lasting
products, concern over the quality, and the materials used for the production would be
recyclable. Moreover, the company comes up with the offer of replacement that is getting
a discount on new products in case of returning old products. It can be said that the
company used the utilitarian theory to resolve this ethical issue arose (Junior et al., 2017).
5. Intellectual property
The theft of the intellectual property was another ethical issue, which company considers
to be taken on priority basis. The company is very definite while keeping its information
safe and secret, so as to protect the information to be used by its competitors. One of the
issues arises when the company uses the domain name at its music software that is
iTunes.co.uk. The domain name was already been used by on the company, Ben Cohen
which is a direct competitor of the company in 2000. The company attempted to deal
with Cohen and purchase from it, but the negotiation failed. Apple was able to handle this
situation well, and the mediating party claims that Cohen was found guilty for abusing
the rights of registration and the unfair advantage was taken by Cohen. Apple gets the
rights for the domain, and through this, it can be said that the egoism theory was adopted
by the company to take action for this ethical issue (Okpara, 2017).
Although the company faces another ethical issue related to the trademark in 2007
against the Cisco system, which accused that the company infringed on its trademark on
the iPhone, which was owned by Cisco since 2000. The company handles the situation,
by acquiring the trademark of iOS from Cisco (Whelan & Fink, 2016).
6. Supply chain issue
The company focuses to audit the factories and implement the supplier compliance to
create the sustainable supply chain, however there were large number of suppliers who
were violating the business ethics and code of conduct; the company acknowledges the
issue and attempt to minimize the number of such suppliers through auditing rapidly. As
per the company’s claim, it is enhancing the conditions of the suppliers and are willing to
become transparent related to the process among the labors of the company, for instance
the company worked with Foxconn to include testing equipment, improving the workers

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safety and setting working hours limit in the factories considering employees, labors, and
supplier as major stakeholders of the company (Seatter & Lozano, 2015).
CRS and sustainability of SAMSUNG
One of the major competitors of Apple in consumer electronics would be Samsung, which is also
acknowledging various corporate social responsibility programs, and working towards
sustainability. Samsung is a global electronics company, which has initiated three key CSR
initiates recently. According to an article in forbs, is found to be an initiative that other
organizations must learn from Samsung’s approach. “Solve for tomorrow,” initiative in
considering the hope for the children, focusing over an attempt to help the children in improving
their health, becoming smarter and provide them with more sustainable life. The company has
conducted the contest in more than sixteen hundred schools in America, which includes essay
writing on How STEM, can be helpful in the communities and for the environment. The
company conducted this to promote technology and environment integration, and for the students
to find it interesting for choosing this as their career (Tukker & Charter, 2017).
The company was focused over the three keys, through this initiative, which was the relevant
focus that is focusing over enhancement of children lives and also supporting STEM programs,
which could be helpful to the company to gain workforce in future. Another key aspect was a
partnership, which included involving organizations like NEEF and National PTA to reflect that
the initiative is concerning over a real community needs. The third key aspect was participation,
as the initiative was not only responsible for the fund granting but also involves a large number
of children as participants. Moreover, for the results also, the company makes people participate
online to come up with a winner (forbes, 2019). Some other successful CSR activities of the
company included book donation, building libraries, and technical school initiative
(samsungengineering, 2019).
Considering the sustainability of the company, and compliance and ethics of the company
include non-discrimination policy and fair treatment is major aspect considered for all the
partners of the company, employees, and customers. The core values of the company include the
commitment of the company to ethical business practices. The compliance program was initiated
by the company to ensure the self-governing legal compliance (samsungengineering, 2019).

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The company promotion to the sustainability includes the social impact initiative, which is
responsible to manage the influence over the various stakeholders of the company like
shareholders, customers, investors, NGO’s, local communities, media, government, and
professional organization. Moreover, innovation is the key to the company towards the value
chain of the company (Wood & Logsdon, 2015).
The company also promotes environmental sustainability through its various initiatives, which
include a climate action plan, which included installing equipment’s that are responsible for
minimizing greenhouse gas and harnessing renewable energy. Considering climate change, the
company includes targets for 2020, which includes intensity-based emissions of GHG for
worksites globally. In the product use phase, the company has to reduce greenhouse gas by 250.
Some other strategies of the company included expansion of energy management at workstations
diminish of GHG in the phase of use of the product, and managing suppliers (Du & Bstieler,
2016).
For encouraging sustainability, another aspect for the company is a sustainable supply chain. The
company consists of more than 2500 supplier worldwide. The company ensures if the suppliers
have participated in Green management to provide economic and technical support and
providing consultants to the suppliers. Moreover, for this, another initiative was eco-partner
scheme, where the company was expecting to connect to a partner through providing them a
certification program, to make the supply chain more sustainable, and manage the supply chain
more closely (Doppell, 2017).
The company commitment towards the sustainable environment includes Planet first, which is
the company’s slogan that reflects the action and determination of the company to keep the
environment and earth over their personal objectives. The company has implemented the eco-
management which is offering the customers the solutions that are eco-friendly and promoting a
sustainable future. Some of the initiative of the company related to this is the collection of the
waste product globally, increase the recycling rate, and decrease in water use intensity (Goffin,
2017). Moreover, the company is producing products that are eco-conscious while using
advanced technology and making customer lives eco-inspired. Moreover, resource efficiency is
another aspect that the company covers in being sustainable that is conserving the resources of
the society that are limited through enhancing the research to optimize resource efficiency.

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Another way to promote sustainability by the company is communication and engagement
program of the company, which includes publishing the policies related to the environment and
transparent about the performance through this publish (Epstein, 2018).
Reflection of experience
Reflection from learning is an effective way, which includes the presentation of an experience to
find learning out of the same. Before gaining experience in learning business ethics as part of my
academic learning, I did not know that it would be helpful to us in our careers. As the course
initiated the basic aspects of business ethics were thought to us, and that comes up with an
interesting topic. It includes various aspects like definitions, theories that are relevant to business
ethics, for instance, utilitarian theory, egoism theory, deontological theory, and morality theory.
This provides what is wrong or right, bad or good for the business; otherwise there would be no
definition of bad practices by the business (Kolk, 2016).
After the course, it was understood that the study on business ethics is a relevant aspect to be
included in an academic course. The major reasons from the same would be
 Overcome problems in networking – If a student is running or working in an organization
need to build some networks, which would be not possible if an individual or a company
does not adapt to the business ethics. It could negatively impact the networking of a
company to grow (Nyberg et al., 2016).
 It could be expensive to be bad – The company in today’s world could not afford to be
bad, which means that the company being faced the ethical issue would reflect a very
negative image in perspective of various stakeholders of the company, and it could not be
able to resolve the problem without applying appropriate business ethics or take action as
per the ethics (Thompson, 2017).
 Defensive strategy – The Company would not be able to defend itself in case business
ethics are not applicable while taking any action by the company. The company must
have a logical reason behind taking any action, and the business ethics are worked as for
strong defense for the company. Moreover, it can be a savior for the company from bad
publicity (scu, 2019).

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 Legal implication – For the company, to compliance with the legal system of the nation,
it is relevant to opt the business ethics, and avoid unethical action by the company to
sustain in the market. Therefore, studying business ethics seems to be very essential
(Russell, J.D & Hull, 2017).
 Abandonment of business – in changing trends and external environment, the public
would not accept the immoral practices of business and some social responsibility are
expected by the customer from the company, which enhances the importance of studying
business ethics well before entering into the corporate world (Park, 2017).
 Customer satisfaction – In order to enhance the customer satisfaction in from the
products and business, the company has to adapt to the ethical framework, to attract more
customers towards the company. This would also be helpful to enhance customer loyalty,
does helpful for the company to retain existing customers and attracting new customers
(Mio et al., 2017).
Therefore, the major learning for me from the experience was that the business ethics must be
part of academic study, from developing students into better business me, or employees of a
company.

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Conclusion
From the report it can be concluded that Apple Inc. is one of the largest information technology
companies worldwide considering its revenue, selling computer software, consumer electronics,
and online services. The company has adapted to various business ethics globally, although has
faced various ethical issue around the world in recent years and was able to resolve the issue
while taking appropriate actions. The major issues faced by the company were considering
various stakeholders for instance, an issue related to the privacy of the customer was identified,
affecting one of the most important stakeholders of the company that is the customers, and
government. However, while applying the utilitarian theory of business ethics, the company took
relative to action and resolved the issue by enhancing the software of the company and ensured
safety to the customers related to their private information. Some other issue identified was
related to sustainability, intellectual property rights, rioting, price fixing, and supply chain
management issue.
Considering its major competitor, that is Samsung in the electronics industry has taken various
initiatives and promote CSR and sustainability. One of its CSR initiatives is solved for
tomorrow; it was initially considering the hope for the children, focusing over an attempt to help
the children in improving their health, becoming smarter and provide them with more sustainable
life.

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