Challenges in the Global Business Environment
Challenges in the Global Business Environment
Every organization has a code of conduct that is meant to steer the company in the right direction especially in terms of how its relationship with other companies, employees and suppliers ought to be in accordance with the labor laws (Walker, 2005). Depending on the code of conduct that an organization has adopted, organizations will differ from one another in a number of ways. Therefore, it is as a result of these differences created by adopting different codes of conduct by different companies that makes a customer or a supplier develop a preference with regards to which company’s product to buy and which company they should do business with respectively (Walker, 2005).
Organizations have been able to understand the relationship between the two and have thus reacted by creating a code of conduct that is respectable to their customers and their suppliers as well to ensure that they promote a healthy relationship between themselves and these two groups of people (Antoniou & Ansoff, 2004). In the year 2008, Apple Company created a supplier’s code of conduct that it has constantly been updating each year to ensure that it fosters good relationships with its suppliers as well as its customers and regulation authorities. This code of conduct that was adopted by Apple revolves around a number of things such as the rights of workers, environmental protection laws, issues of discrimination as well as issues of benefits and payments (“Supplier Responsibility”, 2017). The supplier’s code of conduct that was adopted by Apple requires that employees work for the required hours as stated under the labor laws and not more as well as it requires that these employees are protected from any kind of work hazard that they would be exposed to during their normal working hours.
The main reason why Apple decided to adopt this new tradition of updating its supplier’s codes of conduct on its websites was after it came under attack 8 years ago after Foxconn one of Apple’s main suppliers was accused of exposing its employees to poor working conditions at their work station. Foxconn was accused of employing underage workers who were forced to work at their plants. The amount of pay paid to these workers was poor and the work conditions at their processing station were so bad that employees used to die from time to time as a result of work related incidents and accidents. As a result of the backlash that Apple received at the time, the company decided that it would be fit if it would be conducting an audit of suppliers at least once every year to ensure that these suppliers adhere to the industry’s regulations. In the year 2013 Apple conducted 451 audits of its suppliers which was an increase of 515 from the number of audits that it conducted in the year 2012 which amounted to 298 audits. This audit accounted for almost 1.5 million workers who directly and indirectly worked for Apple Company (“Supplier Responsibility”, 2017).
After the audit Apple found a lot of faults in the way that its suppliers went about their business. Among the violations that Apple was able to find out at the work stations of its suppliers were that, some of its suppliers engaged in discriminatory practices whereas others employed minors to work at their production facilities while being paid very little compensation. Apple has also cracked the whip on all its tantalum using suppliers requiring them to put into place environmental safety production procedures in place to ensure that they produced goods without having a major effect on the state of the environment. As a result Apple has been constantly improving its supplier’s code of conduct to ensure that they operate within the standards required by the industry.
Some of the major changes that Apple instituted on its suppliers included starting up the SEED program which is an employee empowerment program which was done on all the employees of the suppliers that were supplying Apple with commodities. The program which by the year 2012 had only managed to reach 218,900 employees saw the number increase to 480,000 in the year 2013 and a further 1,000,000 employees in 2016. The main aim of the program is to educate the workers about their rights and what they are supposed to do to ensure that they work under favorable conditions. The program educates the workers on health matters, environmental issues, work safety and encourages them to go out of their way to ensure that their rights are protected and respected by their employees.
Apple also requires that all its suppliers who were found to have faulty books of account to immediately conduct financial reparations on their books of account. If they fail to do as requested, their action would lead to a cancellation of their supplier’s contract with Apple which would be followed by a court case by Apple on behalf of the mistreated workers. For the companies that were found to have hired underage children, Apple required that those companies take such children to school so that they can be able to receive an education. This was an order that was issued to all companies that were found to have employed underage workers. For the workers that were being under paid, Apple requires that its suppliers improve their salaries to the amount that has been stated under the labor laws.
In an effort to ensure that the environmental laws were followed by all its suppliers, Apple created the Supplier Responsibility standards which required that all the suppliers that were using tantalum as a raw material should be assessed to determine the effect that the mineral has on the environment. The reason why Apple decided to bring this investigation on board was because there were complains that were raised by environmental protection bodies that the mineral has harmful third party effects on the environment. Other suppliers such as those that use gold, tin and tungsten would be assessed as well to determine the amount of effect that these minerals have on the environment.
As an organization it is important, that our suppliers adhere to our standard code of conduct because of the social responsibility we have towards our clients. One of Apple’s main principles is to engage in practices that not only benefits the organization but the community as a whole. Therefore, to be able to maintain and uphold these standards it is important to ensure that our suppliers being one of our business partners adhere to these regulations as well (Southard, 2016).. It remains one of Apple’s main targets to continuously revise and improve its code of conduct to ensure that all the employees that work at all our suppliers’ work stations are properly treated and taken care of for the sake of our image and reputation as a company that puts the needs of clients’ first before our own. Overall, these standards will continue to change over the years in tandem with the regulations that will be in place every year.
Antoniou, P., & Ansoff, H. (2004). Strategic Management of Technology. Technology Analysis & Strategic Management, 16(2), 275-291. http://dx.doi.org/10.1080/09537320410001682928
Southard, M. (2016). Implementing Challenging Policy and Systems Change: Identifying Leadership Competencies. Human Service Organizations: Management, Leadership & Governance. http://dx.doi.org/10.1080/23303131.2016.1165038
Supplier Responsibility. (2017). Apple. Retrieved 31 May 2017, from https://www.apple.com/supplier-responsibility/
Walker, P. (2005). Cracking the code: the genesis, use and future of the Code of Conduct. Disasters, 29(4), 323-336. http://dx.doi.org/10.1111/j.0361-3666.2005.00295.x