Essay On Apple Supply Chain

Background

The high suicide rate in Apple’s production line has aroused public concern towards the ethicality of Apple supply chain. After these incidents, other cases of labor exploitation and environmental degradation in their production chain were gradually revealed and reflected Apple supply chain management problem, which damaged the CSR image of Apple extensively.

Key Issues

Labor Exploitation and Environmental Degradation

Several labor exploitation and environmental degradation cases which are not aligned with CSR theory had been reported from the Apple supply chain in China. For instance, some employees of Apple’s outsourced manufacturers were found working long hours and receiving unfair salaries. Meanwhile, employees were forced to work excessively in harsh conditions with inadequate protective gear, which led to frequent workplace

This is primarily due to the lack of incentives given by Apple for their suppliers to engage in CSR practices. For instance, the suppliers were offered a limited profit margin for their products which forced them to minimize their labor costs and waste disposal costs which induced labor exploitation and pollution. On top of that, limited penalty or reward were given to suppliers to encourage adoption of CSR policies. In most cases, the discovery of violations would only require the suppliers to address the problem within 90 days and no other penalty such as termination would be imposed once the violation is solved in time. Without a penalty system, the suppliers have little incentive to improve their workers’ welfare and waste management as they face no consequences for their violations. In order to hedge against potential reputational risk, the incentive issues on Apple’s supply chain must be eradicated before more violations are