Apple Inc.: Ethical Issues, Practices, and CSR Analysis Report

This report provides a comprehensive analysis of the business ethics of Apple Inc. It begins with an overview of the company, its history, and its success, followed by an examination of the ethical issues the company has faced, including product quality, labor practices, and privacy concerns. The report then explores the impact of both ethical and unethical practices on various stakeholders, such as consumers, shareholders, employees, suppliers, and society. It applies ethical theories like deontology and utilitarianism to assess Apple's approach to these issues. The report further delves into Apple's sustainability efforts and corporate social responsibility initiatives. Finally, it offers recommendations based on the analysis, concluding with a reflection on the importance of business ethics in the modern corporate landscape. The report highlights the importance of ethical standards for organizational success and stakeholder value.

BUSINESS ETHICS

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
About the organisation...........................................................................................................1
Ethical issues handle by Apple Inc.........................................................................................2
Impact of ethical practices on Stakeholders...........................................................................3
Application of Ethical theories to Apple................................................................................6
PART 2............................................................................................................................................8
Sustainability and Corporate social responsibility.................................................................8
PART 3..........................................................................................................................................10
Reflection.............................................................................................................................10
Recommendations................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business ethics is refers to the values, norms and attitudes in which an organisation is
formed and the way in which a business deal with the world. The study aims to identify the
ethical issues, challenges and success. Apple Inc. is an American multinational technology
company that designs, develops and sells computer software, electronics and online services. It
was found by Steve Jobs, Ronald Wayne and Steve Wozniak in 1976 and it is headquartered in
Cupertino, California.
The study will analyse the ethical issued that has face by the company in the past and
how they tackle the issues by ethical and unethical practices. In this analysis, some theories of
business ethics will also being applied. Lastly, by comparing Apple Inc. to other organisation it
will be evaluate that how they promote sustainability and CSR.
PART 1
About the organisation
Apple Inc. faced many issues and challenges throughout its history of business (Barry,
2016). The share price of the company in 1997 was around $3.30 and in 2011 its share prices
risen to $339.87 (Apple Inc. Company, 2019)). The success of the company is based on creating
high quality, innovative products and services. The company has also won one of the first in the
world by Fortune Magazine most admired company. The brand value of Apple Inc. is more than
$153 billion that makes the company most valuable brand in the world. Many of the consumers
are drawn to Apple because of the superior quality of products and a feeling of high status and
enjoyment from using the company's products and services (Butler, 2018).
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Ethical issues handle by Apple Inc.
Ethics in a business is all about value for society, value for others and value for self so
that there can be fairness is maintained in the society and things can be done smoothly and
appropriately in the environment (Crowther and Seifi, 2018).
Although Apple is most valuable, successful company and also won the award of
World's most admired company, it experienced some ethical issues in recent years. The ethical
issues have profound effect on the future success and growth of the industry. It also responsible
top damage the sterling reputation by serious misconduct or failure to address risk appropriately
(Davies, 2016). They face various ethical issues in the past in following aspects and handle them
effectively;
 Another ethical issues that Apple has been involved in its quality of products. Company
provides products that are not up to standards or with minor defects that set the wrong
image in-front of the consumers and in the market. Its iPhone 4, delivered in the market
with many problems. The issues are occurred due to interference with the antenna when
held in a certain way (Ferrell and Fraedrich, 2015). At the very beginning, organisation
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Illustration 1: Apple Inc. Company
(Source: Apple Inc. Company, 2019)

tried to minimise the problem but that did not work at all and the criticism fall on its side
and company went ahead to solve the problem, by first offering free bumpers and cases
for a period of time until the problem was resolved.
 The employees of the company has complained about them that they force the workers to
work for more than sixty hours in a week that does not as per the legal hours required by
the law (Grant and et. al., 2017). Also, some of the workers claims that they allowed
children to work in the industry. The management of the company reacted and resolved
the problem by changing the working conditions in the affected factories of Apple Inc.
 The privacy and secrecy is the main concern of the company and they also faced ethical
issues on the privacy after google and Apple Inc. together uncovered that the cell phones
sold do collect data on the position of mobile phones. This make consumer feel that their
privacy was infringed (Grayson and Hodges, 2017). The company deals with this issue
by introducing software. But this is the issue that company do not able to deal fully.
Impact of ethical practices on Stakeholders
Ethical practices
Company conduct many ethical practices by keeping and maintaining the value of the
stakeholders. Ethical business practice is policies and practices regarding controversial issues of
the company (Harrison and et. al., 2015). Apple tries many aspects to ensure its employees and
all the other stakeholders work appropriately in all the situations. Stakeholders are the most
important part of the organisation success and managing business ethics in the society.
According to the organisation, there are main four principles that contribute to the integrity;
compliance, honesty, confidentiality and respect (Pearson, 2017). Industry has also drafted code
of conduct that employ to all of its operations. On their website, more specifically policies
regarding corporate governance, guidelines and director conflict interest is available. The
business ethics of the company consider all of its stakeholder including; employees, consumers,
suppliers, etc.
Without ethical standards company cannot exists as there would be no direction,
motivation or discipline (Quarshie and et. al., 2016). It has separate ethical standards for its
stakeholders. Apple Inc. provides employees with a business conduct helpline they can use to
report any misconduct to Apple's Audit. There are two type of stakeholder; Internal and external.
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Internals stakeholder include; Employees, manager, owners. External stakeholder include;
Supplier, society, government, creditors, shareholders and customers.
Affects on stakeholders perception
 Consumers- The ethical behaviour make consumer trust and loyalty with the company
that they serve the quality products with maintaining all the ethics that is required for
environment protection and consumer value (Shaw, 2016). Many ethical behaviours for
the company is change the perception of the customer in positive manner.
 Shareholders- As company follows all the legal norms and maintain the value of its
employees and do business with ethics that change the perception of the company to
invest more in the company.
 Employees- The ethical practice by the company change the way of pretending and most
of the employees think it is the best and appealing place to work (Trevino and Nelson,
2016).
 Suppliers- Perception of supplier is change with the ethical behaviour of the company
and understand the privacy and maintain their value (Unit, 2015). Supplier feels valuable
and ethical practice allow company to deal with supplier's issues.
 Society- Corporate social responsibility affect the behaviour of the society as it ensure
them and make them comfortable that company protect the environment and resources by
their following company laws and environmental policies and change the perspective of
the company (Difference Between Internal and External Stakeholder, 2019). They also
encourage the engagement of the society with the organisation.
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Unethical practices
There are many unethical behaviours conduct by Apple Inc. Unethical practices can be
defined as an action that falls outside of what is considered morally right for business and for
stakeholders as well (Wallace and Sheldon, 2015).
Apple Inc. were accused of treating their employees inhumanly like machines in 2011.
To cut the cost and enhance profit they hired roughly around 5,00,000 employees. There were
multiple cases of unethical behaviour of the company and terrible things they put the employees
through. They also make policies that each and every employee have to sign anti-suicide contract
pledging that they will not commit suicide due to the large number of death in 2011. This kind of
unethical behaviour make negative impact on its stakeholders. Apple Inc. also accused for using
child labour in the organisation. Apple has been accused for discriminating against females and
control the position of the female worker in the company (Yazdani and Murad, 2015). They are
unable to move female on the higher position in the company such as CEO jobs are commonly
reserved for the men.
Affects on stakeholders perception
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Illustration 2: Types of stakeholders
(Source: Difference Between Internal and External Stakeholder, 2019)

 Consumers- Using child labour might affect the consumer of Apple Inc. as they will not
want to buy if they know the product has been made by a child (Barry, 2016). The
unethical behaviour of the company can affect the consumer emotionally and physically
it may affects on the price and sales. Restriction on women may change the perception of
female buyers in the market and company can lose female consumers.
 Government- This practice also can affect the government of the country in which apple
taking child in the company as per the labour (Crowther and Seifi, 2018). The value of
the company is decrease in the mind of government and they have to take legal action
against the company that can damage the image of brand.
 Shareholders- The unethical practice may have affects on shareholders of the company.
It might change the perception about the industry and they will not take any interest in
that company that do such a major unethical behaviour. Shareholders avoid purchasing
and spending money in the organisation (Ferrell and Fraedrich, 2015).
 Employees- The behaviour also affect its employees perception. Female workers do not
feel comfortable in working in the environment that discriminate female workers and also
other employees not want to work for that company that not follow the legal laws and use
child labour in the company and do not support human rights.
Application of Ethical theories to Apple
There are two major approaches in business ethics that can be applied by Apple to tackle
its ethical issues (Terms and Types of Ethical Theories, 2019).
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Normative theory
This theory is helpful in making understand to the people what is right and what is wrong
morally (Grayson and Hodges, 2017). This theory focuses on the way of action of people
whether they are within the company or outside the organisation. This help Apple Inc. to change
the action of the people and show them that how people act morally.
Deontology
This theory was developed by Immanuel Kant. Morals regarding deontological are
related with the actions of the individuals not with the result of their activities. It stated that
morality of an action lies on the inner motive rather than external effects (Wallace and Sheldon,
2015). It is also called as rule based morality. It should be applied by Apple Inc. to maintain its
morality and business ethics. Although, company do not receive any direct benefit from this
approach but it is beneficial for employees. Under this theory they applied social justice theory.
Descriptive theory
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Illustration 3: Ethical Theories
(Source: Terms and Types of Ethical Theories, 2019)

A descriptive approach to ethics attempts to describe the moral system of groups or
societies (Yazdani and Murad, 2015). This theory state and show that how ethical decision
should conducted in the businesses and it stated that thinking of people is based on their
experience and situations.
Utilitarianism
It is an action that morally right if it results in the greatest amount of happiness for the
greatest amount of people affected by the action (Crowther and Seifi, 2018). It emphasises on the
development of a moral standard or the promotion of the best interest of the majority of the
society in long run. It will measure the value of any act that is able to enhance the happiness of
the stakeholders. They should maintain moral value of the employees and other stakeholders. It
is also beneficial for dealing with challenging dilemmas effectively faced by Apple Inc.
By utilising this theory Apple Inc. make better decisions for getting their desired
outcomes by producing maximum benefits (Ferrell and Fraedrich, 2015). If the company take
care of the happiness of the employees they want to stay in the company for long and change
their negative perception into positive perception.
PART 2
Sustainability and Corporate social responsibility
It is a comprehensive approach to management of organisation that is concerned on
creating and enhancing long-term, social, economic and environmental value.
Sustainability is development and transformation of the organisations as well as creation
of its long-term value based on innovation as well as intellectual and relation capital. It describes
the ability to maintain various processes and systems, environmentally, economically and
socially over time (Quarshie and et. al., 2016). Corporate social responsibilities refers to an
organisation's commitment to practice social and environmental sustainability and they are
responsible to maintain the environmental and social landscape where they operate.
Sustainability and Corporate social responsibility of Apple Inc.
The sustainability and CSR program of the company is led by Lisa Jackson, vice
president of environmental initiatives (Trevino and Nelson, 2016). Apple is one of the company
that focused on environmental campaign of its products and services.
Their CSR programs;
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 Supporting local communities
 Educating and Empowering workers
 It focuses on Human rights
 Employee health and safety
Apple does not have a consolidated CSR report. Their webpage provides financial report and
information about isolates sustainable activities such as environmental initiatives. Whenever, any
scandal exploded of the company regarding its ethics. They response immediately to the issues
and take correct and preventive actions (Wallace and Sheldon, 2015). For example; Integrating
fair labour association. Apple also create and adopt an internal code of conduct and always
promote; honesty, respect, confidentiality. There are many strategies and plans regarding
Corporate social responsibilities that did not work properly that is because there is no stakeholder
engagement strategy, lack of triple bottom line thinking, etc.
Sustainability and Corporate social responsibility of Microsoft
Microsoft won a number of achievements and awards for its responsible behaviour
towards society. It also makes its position on the first rank on corporate responsibility magazine's
100 best corporate citizens 2018 (Yazdani and Murad, 2015). It ranked for both Environment and
social score that measures corporate performance. Its CSR programs and initiatives include;
 Labour and human rights at Microsoft
 Health and safety at Microsoft
 Gender equality and minority
 Energy consumption
 Waste reduction and recycling
Comparison and similarities
In the comparison, corporate social responsibility and sustainability is compared to Microsoft
and will look upon how both the companies promote its CSR.
Microsoft Apple
Overview 93000 employees and $58.4
billion in annual revenue
32000 employees and $32.5
billion in annual revenue
Health Pays 100% of health care 10%
and 70% customer satisfaction
Unclear health 8% coverage
and 84% customer satisfaction
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