Globalization and forecasting are part of every business. In this modern day and age, more corporations are looking to increase profits and reduce costs by going global and outsourcing a lot of their manufacturing. In a recent article from the Wall Street Journal, titled Apple navigates China maze, Apple details the trouble it is having in china and the opportunity for growth they see in the Chinese market. Apple globalized its market to china in order to reduce costs and it also understood the market there. In the article, it says that China was Apple’s fastest growing market with $13 billion in sales. Due to high demand, nearly 40,000 people were visiting Apple stores in China daily. From an operations management perspective, they see this as a chance to rapidly expand their company and capitalize on the expanding market for their products.
The report that was released also detailed bad working conditions and the company was surprised and disgusted by these findings. There were under aged workers and violation of employee pay and benefits standards. This also deals with the operations management decision of supply chain management. Apple has to deal with its suppliers that are violating company standards. These suppliers can hurt their profits by ruining their company image.
Thus is not surprising though because mostly every company or corporation is profit driven. Especially when a company outsources its operations to another country, it is doing this mostly in order to reduce costs, attract and retain a global talent, and to understand different markets so they know if they can thrive there or in any other country that is similar, just to name a few. I think that this is hard to control. It is hard to manage these types of operations due to the fact that most of them are so far away from where the main headquarters are located. To be able to manage these oversees operations effectively, a corporation should have someone there during all times when the factories are open so they can ensure quality control and make sure that the workers are being treated fairly.
If a company or corporation were to have someone there or a better presence in the area where a supplier is manufacturing their product, it would make it more expensive and cut into their profits and it would make it less worth it for them due to the extra incurred costs.
Does anybody have any ideas on how Apple can improve their global operations so they can reduce these types of exploitations in factories and still retain the global market and profit margin in these countries?
The link for the article is
http://online.wsj.com/article /SB10001424052970204409004577158764211274708.html?mod=WSJ_hp_LEFTWhatsNewsCollection.
placing a representative from Apple, Inc to fully supervise the working conditions of suppliers’ employees is a great idea. Nevertheless,
I fear that Apple, Inc should have thought of this as a solution. The reason is that ethics has been of question in world business since the
growth of American companies worldwide. I personally believe that despite sending a representative, due to the high demand of high profits, Apple, Inc
would allow the malpractice of its suppliers.
The link to the article was not working properly, but I think I read the same or a similar article on this subject. If i’m not mistaken the article talked about one of the suppliers apple purchases parts from. From that perspective, it would be hard for Apple to place a full time employee in the factory of a supplier they buy parts from. One thing they can do is simply threaten to purchase the part from somewhere else if they wont adhere to Apple’s rules. Apple being such a large customer, I’m sure they would do what ever is necessary to keep Apple as a customer.
It is not surprising to me that this news has come about from Apple, we always hear about well-known corporations having harsh working conditions, low salaries, and children working for them (Nike, Sony, Disney). I completely agree with the author and tk301 that by placing an authorized representative from Apple’s into the factories in China to ensure that the working conditions of the factory workers are abiding by the working standards. I also believe that being this it will not really affect the cost of the product and labor, because there are many people in China who are willing to work for low-wages and since Apple is a multi-billion corporation they can afford to send someone to China. Constantly seeing U.S. corporations have “sweatshop” like conditions in other countries is just not right and we must fight for labor workers rights.