A Critical Examination of Ethical Issues in Apple's Business Practices

This report provides a critical analysis of Apple Inc.'s ethical practices, examining various issues the company has faced throughout its history. It delves into privacy concerns related to consumer tracking and data security, exploring how Apple has handled user data and its implications. The report also investigates allegations of price fixing and its impact on market competition, as well as the company's stance on intellectual property theft and sustainability. Furthermore, it discusses labor practices, the challenges of supply chain management, and the impact of product launches on society. The report offers an overview of ethical decision-making within businesses and critically evaluates Apple's actions, offering alternative insights and suggesting areas for improvement in its ethical framework. The analysis considers the company's influence on global markets and its responsibilities toward consumers, the environment, and its workforce, providing a comprehensive understanding of the ethical dimensions of Apple's operations.

Running head: APPLE ETHICS: CRITICISM
APPLE ETHICS: CRITICISM
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Executive Summary
Business ethics have always remained an important part of any business, colossal or trivial. The
paper highlights the nature of ethical decisions taken by big as well as small enterprises (SMEs)
as a brief literature review. The respective paper focuses on the different ethical issues faced by
businesses and enterprises, dealing exclusively with Apple, beginning from privacy, price fixing,
rioting to sustainability and intellectual property and criticizes the ethical issues faced by Apple.
Apple Inc is an American technological company that primarily focuses on production and
manufacture of technical gadgets and gizmos. Apple Inc., like many other technological
companies, had faced certain ethical challenges and issues throughout its business life till now.

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Table of Contents
Introduction.................................................................................................................................................3
Discussion....................................................................................................................................................3
Ethical business decisions........................................................................................................................3
Ethical business decisions in Apple..............................................................................................................4
Overview of the company.......................................................................................................................4
Ethical Issues and decisions of Apple...........................................................................................................5
Ethics in small business...............................................................................................................................9
Conclusion.................................................................................................................................................10

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Introduction
The respective paper focuses on the different ethical issues faced by businesses and
companies, especially Apple. Inc, beginning from privacy, price fixing, rioting to sustainability
and intellectual property and criticizes the ethical issues faced by the company providing
alternative insights for the company as well. Business ethics have always remained an important
part of any business, colossal or trivial. The paper highlights the nature of ethical decisions taken
by big as well as small enterprises (SMEs) as a brief literature review. Apple Inc., like many
other technological companies, had faced certain ethical challenges and issues throughout its
business life till now which has also been discussed in the paper.
Discussion
Ethical business decisions
Drumwright Prentice and Biasucci (2015) in his article describes the teaching of three categories
of ethical decision behaviors, namely, individual differences, interpersonal variables and
organizational variables. Behavioral theories such as moral development theory and expectancy
theories have been described in the article. The article concludes by suggesting to improve
ethical decision making from behavioral perspective. The paper highlights the importance of
cognitive sense and cognitive intelligence during the time of formation of ethical decision
making for big as well as small business. According to Morales-Sánchez, and Cabello-Medina
(2013) the article provides a deep insight about the limitations of the decision making process
and the challenges it faces. The article discusses about the consideration of moral competencies,

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which is also considered as moral virtues in the workplace that helps to understand the reason
why moral character contributes to the types of ethical decision making in different
organizations. The paper discusses the universal and omnipresent nature of moral competencies
such as prejudices, prudency, justice and benevolence and their influence on the process of
formulation of ethical decision making in the workplace. Cianci et al. (2014), in his article “The
effects of authentic leadership on followers' ethical decision-making in the face of temptation:
An experimental study” discusses about the role leader plays on the morality and ethical
temperament of his/her followers, executed as ethical decision making in the context of
temptation. The article clearly states that followers of neutral and less authentic and less dynamic
leaders tend to make unethical decisions out of temptation (in the workplace) than the followers
of authentic and dynamic leader. The article also depicted significant moderated-mediated effect
where the interactive effect of authentic leadership and temptation on individuals' guilt appraisal
was moderated by the nature and features of ethical decisions.
Ethical business decisions in Apple
Overview of the company
Apple Inc. is an American multinational technology concern that designs, develops and
sells electronic products, application software of computers as well as online services. Apart
from Amazon, Facebook and Google, Apple is considered to be one of the big four tech
companies in the world (Anon 2019). The hardware commodities and products of the company
include iPhone smartphone, iPhone smartpad, Mac personal computer, Apple TV digital media
player, HomePod smart speaker and AirPods wireless ear buds. The company has always been
an embodiment of quality, innovation and prestige in the world of technological industries of

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America. The company has successfully traded with the foreign countries and has also performed
well in the global business parameter. However, like many other big and successful companies,
Apple Inc, despite of having lucid and effective corporate culture, ethics and parameters, faced
different ethical and sustainability issues in their business life till now. The criticism of Apple
Inc. company mainly concerns with unethical business practices, dubious tactics of tax payment,
sweatshop labor tactics in production method, misleading warranties, insufficient data security
and environmental destructive activities and actions.
Ethical Issues and decisions of Apple
One of the major issues which the company Apple Inc. had gone through was privacy
issues. Apple Inc had been alleged of consumer tracking, which became one of the gravest
reasons of Apple’s discredit in the world market. As the world had seen an unprecedented
growth and advancement of internet usage and social networking, an easy getaway has already
been created to track the online activities of the customers. In order to understand the customer
trends so that they can modify and implement strategies accordingly, Apple Inc. was alleged of
optimizing and keeping an eye on the online activities of the customers, hampering their privacy.
Apple and Google disclosed that they had implemented GPS system in certain smartphone
software and applications to track the location of the phones that operated the software and
applications. The Apple Pay software that permitted customers to purchase items through online
payments had been accused of tracking and hacking the banking details of the customers.
However, the sympathizers and certain policy and ethics critics have argued that the customer
tracking trend of Apple Inc. might have been useful for tacking any kind of obnoxious activities
such as terrorism and plans for vandalization of global properties that could have possibly saved

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the lives of the people in future. However, the argument is what I believe, valid because as the
phenomenon of global terrorism has increased unprecedentedly throughout the world, especially
in the developing and the developed countries, security has become the most important subject in
the contemporary world. The U.S government has been implementing certain strategies to keep a
track on the public in general in order to have a surveillance having the only objective of curbing
all kinds of global anti-social power and movement. However, there are still more awaited
justifications that the world demands from the company because in the modern and
contemporary world of individualism and arrival of a new wave of self-realization and
actualization, privacy has become one of the significant concerns of every respectable individual,
no matter how trivial or significant they are in the society. Keeping privacy of an individual is
the duty and responsibility of a society and any kind of interference in the privacy of a person is
highly condemnable. However, many privacy theorists and activists have stated that there is a
conflict with the government and the company Apple which would not cease easily.
Another important ethical issue that the company had gone through is allegation of the
act of price fixing. Price fixing is an illegitimate move of a company where the company is not
willing to sell its goods or services below a certain price. Apple Inc. has been found guilty of
forcing almost sixteen retailers to prices on the iphone 5 and iphone 6 the company
manufactured, violating the USA anti-trust law by suppressing the market competition for the I-
phone applications. However, Apple argued that objections to the 30 percent cut should be
arriving from the developers, since they're the ones who pay directly rather than users. The price
fixing strategy taken up by Apple has proved to be obnoxious regarding the market positioning
of the other i-phone applications in the global market. By having an excessive control over the

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price, Apple has almost formed an illegitimate monopoly in the market which is hampering the
other technological companies and thus the matter should have been dealt with.
Other two important ethical issues that Apple had faced is the intellectual property and
sustainability issues. Planned obsolescence, which is the strategy to push people to replace or
upgrade their technology by Apple as it brings out new, latest technologies with a plethora of
new and trending features has become a plague for the environment and the mankind. The new
technologies take place of the old technologies and the used gadgets are dumped away which
leads to environmental problems such as pollution and contamination. Apple Inc. has been
rethinking and rebuilding their sustainability policies and they claim that they are working
relentlessly on the Reduce, Reuse and Recycle practices in order to keep the environment clean
and help themselves and the environment to develop in a sustainable way. However, in spite of
all kinds of programs Apple Inc. has initiated, it has to be understood that technology is ever
changing and upgrading day by day and it is very important for the benefit of the mankind too.
Therefore, upgradation would lead to discarding the old technologies, which is more or less,
inevitable. Therefore, it is suggested to the company to produce and manufacture products that
are eco-friendly and organic rather than depending completely on the plastic, synthetic and toxic
materials in making the technical goods. The company is suggested to bring out new and
innovative sustainability policies and practices.
Intellectual property theft is also a key issue of the Apple Inc. Apparently, Apple had
been known to be solemn in their resolve of keeping proprietary information confidential to
prevent the other companies plagiarize their ideas, innovations and strategies which escalated to
lawsuits between different technological companies and Apple. After Apple licensed Microsoft,
another lawsuit came to Apple against Microsoft. According to Apple, the licensing truce that

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both Microsoft and Apple took part in allowed only Window 1.0 version and that the Microsoft
Windows needed to be felt like Apple’s Machintosh GUI. Cisco systems also went against Apple
for trademark issues in the year 2007. According to Cisco, Apple infringed their i-phone
trademark which the company Cisco owned since the year 2000. However, Apple’s behavior and
the manner at which it negotiated the business terms with Cisco seemed to be dubious and
deceptive which was the reason why Apple’s action with Cisco always remains controversial and
criticized throughout the world by different business forums and centers. There have been
questions regarding the authenticity of Apple’s claims by many scholars and diplomats. Question
arises weather Apple is strongly adherent to the claims it makes against other collaborators and
rivals it has in the market or weather such claims are made up in order to keep its competitors in
a bad light to gain maximum share in the world market. The conspiracy theorists suggest that
companies that do not have adequate protection for their intellectual property can easily be
copied of the competition in order to gain the competitive foothold or place in the global and
local market, which is supposedly the case of Apple too. In the past few years, the supply chain
management of the company Apple had been facing several issues and the company had been
subtly threatened to undermine the company from a company who has been highly admired and
an ethical company. The company is suggested to keep a track on the demands of the customers
and work accordingly. The commodities, products and services provided by the company must
be readily available whenever the customer would be desiring them. Apple had been labeled and
tabooed as an unfair industry that sweatshops labor, multiple campaigns were conducted against
the company by the labor force. Therefore, Apple must consider loosening its labor laws and
employee policies, making their workplace more flexible so that such issues are not given any
place in the future.

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Rioting is another by-effect of Apple’s over popularity. In the year 2012, Apple declared
a massive sale of i-phone at retail stores in China. The result was catastrophic as there had been a
massive crowd waiting from the past 48 hours to buy i-phone which even led to riots and chaos
in the Chinese cities and society. Therefore, Apple was bound to call down the sale. The tax
issues have also become a hectic burden for the company. In the year 2016 when the European
Union stated that Apple had to provide $13 million taxes to them for their business dealings in
Ireland, the statement created argument and conflict among the countries like Ireland and the
United States with Apple. In both the cases, Apple Inc has been facing ethical issues. The
company has made unnecessary sales offers to attract the general customers who have low
affordability rate which is creating class conflict in the society at the same time. Apple Inc, on
the other hand, had always been dubious regarding its tax submission and EU considers, like any
other country, that Apple had utilized their countries due to low tax rate, which led to a conflict
between European government and multinational business concerns. The company is suggested
to conduct its business dealings judiciously and ethically.
Supply chain management issues are another management issue that Apple has
apparently faced. l part of a business, no matter how trivial or significant the company is in the
global or local market.
Ethics in small business
Turyakira (2018) in his article “Ethical practices of small and medium-sized enterprises in
developing countries: Literature analysis” has analyzed the importance of ethical practices in
today’s medium as well as small businesses in order to run their operations economically,
efficiently and effectively to enhance their performance. However, small and medium sized

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businesses, according to the article, have faced lack of ethical decisions due to lack of funds and
management, therefore, could not survive. In the concluding part, the author had suggested the
SMEs for taking up ethical practices and regulations. Ahmad, Amran and Halim (2012) in their
article “Ethical and Socially Responsible Practices among SME Owner-Managers: Proposing a
Multi-Ethnic Assessment” have argued about the fact that the small and medium sized
businesses should possess ethical decisions as well as corporate social responsibility in order to
place themselves in a better position in the business society, which would further increase the
credibility of the enterprises by enhancing their goodwill and reputation.
Conclusion
The respective paper has concluded by focusing on the different ethical issues faced by
the companies, including SMEs (Small and Medium enterprises). The paper also dealt with
ethical issues and decisions taken by Apple, beginning from privacy, price fixing, rioting to
sustainability and intellectual property and criticizes the ethical issues faced by the company,
providing alternative insights for the company as well.

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References:
Morales-Sánchez, R. and Cabello-Medina, C., 2013. The role of four universal moral
competencies in ethical decision-making. Journal of Business Ethics, 116(4), pp.717-734.
Cianci, A.M., Hannah, S.T., Roberts, R.P. and Tsakumis, G.T., 2014. The effects of authentic
leadership on followers' ethical decision-making in the face of temptation: An experimental
study. The Leadership Quarterly, 25(3), pp.581-594.
Turyakira, P.K., 2018. Ethical practices of small and medium-sized enterprises in developing
countries: Literature analysis. South African Journal of Economic and Management Sciences,
21(1), pp.1-7.
Ahmad, N.H., Amran, A. and Halim, H.A., 2012. Ethical and socially responsible practices
among SME owner-managers: Proposing a multi-ethnic assessment. Journal of Southeast Asian
Research, 2012, p.1.
Drumwright, M., Prentice, R. and Biasucci, C., 2015. Behavioral ethics and teaching ethical
decision making. Decision Sciences Journal of Innovative Education, 13(3), pp.431-458.