Apple has tried to ensure its employees and those with which they work display appropriate conduct in all situations. It bases its success on creating innovative, high-quality products and services, and on demonstrating integrity in every business interaction. Apple identifies four main principles that contribute to integrity: honesty, respect, confidentiality, and compliance. To thoroughly detail these principles, Apple drafted a code of business conduct that applies to all its operations, including those overseas. It also made available on its website specific policies regarding corporate governance, and guidelines on reporting questionable conduct. Additionally, Apple provides employees with a Business Conduct Helpline they can use to report misconduct to their Audit and Finance Committee.
Many of Apple’s product components are manufactured in countries with low labor costs. The potential for misconduct is high because of differing labor standards and less direct oversight. As a result, Apple makes each of its suppliers sign its “Supplier Code of Conduct” and performs factory audits to ensure compliance. Apple may refuse to do additional business with suppliers who refuse to comply with their own standards. To emphasize its commitment toward responsible supplier conduct, Apple releases an annual Supplier Responsibility Report that explains its supplier expectations as well as its audit conclusions and corrective actions the company takes against factories where violations occur.
Ethical issues at Apple can easily damage the company’s reputation, and have a profound effect on the company’s future success. In the past few years, serious supply chain issues have threatened to undermine Apple’s status has a highly admired and ethical company. To meet the continuous demands of Apple consumers, products from the company must be readily available, and for Apple, most of these products are produced throughout Asia. In the past, multiple accusations pertaining to improper working conditions, underage labor disputes, and worker abuse have come into question. Thus, Apple has been labeled as an unfair sweatshop, and critics launched multiple campaigns against the company. This resulted in negative publicity from protestors, who asked current Apply consumers not to support Apple’s unlawful practices by purchasing its products. Several high-profile events at Apple factories generated even more criticism of its supply chain. For instance, in Longhua, China, workers have committed suicide at Apple supplier factories. Much of the media attention focused on labor violations.
Apple claims it is significantly improving supplier conditions and becoming more transparent about its labor processes. Through the “Supplier Code of Conduct”, Apple will improve its supply chain practices. However, continual monitoring of its suppliers and enforcement of ethical standards are necessary to assure stakeholders that Apple takes the well-being of workers in its supply chain seriously.