Think Different…Apple

Tonight at his lecture, Ed Freeman brought up a story about Nike. Nike is a company who’s brand is so well established that not only are its business practices under scrutiny, but so are its suppliers’ business practices…and their suppliers’ practices. Freeman’s Nike example was that the dye their suppliers used was produced from flowers grown on plantations that exploited child labor. Freeman said that this is good. This is capitalism. I agree with Freeman. 

It’s a good thing that Google gives us the ability to easily research what negative and positive press companies accumulate. Google facilitates consumer awareness. Consumer awareness leads to scrutiny and it’s this scrutiny that makes companies like Apple and Nike have to act to change their brand to better represent the values they sell.  One step to stopping the horrible working conditions like those of Foxconn in China is to have better informed consumers. Awareness is the first step to solving wide spread social problems.  Freeman’s stakeholder theory is grounded in maximizing the stakeholder value. If you treat your employees poorly then people are going to find out about it. The value of your brand is only worth as much as the value it brings to the world. I like this because it encourages people to act ethically. If you act ethically your perceived value to the world increases.

One of the reasons that Apple still outsources to places like Foxconn is obviously the lower costs. That being said if Apple were to stop outsourcing to China it would raise costs significantly. To steal again from Freeman’s lecture, what if there didn’t have to be a tradeoff? What if Apple had a burning desire to solve the ethical dilemma that all major electronics corporations are currently faced with. Should we value lower costs or better working conditions? A company with resources like Apple could innovate a new, cheaper way to produce their products. This innovation could become a competitive advantage or a new product line. This is how capitalism supports stakeholder theory. Capitalism values the innovations that consumers value the most. There is not just one factor that determines the price a consumer will pay for a product. It is a combination of factors like price, brand, utility, etc.. Innovations that increase many factors are the ones that increase stakeholder value the most.

Obviously avoiding tradeoffs is easier said than done…but why should anyone settle for tradeoffs?


8 responses to “Think Different…Apple

  1. I like that you brought in ideas from the Freeman lecture. Another point that Freeman brought up is that profit is not the purpose of a business. You touch on the idea that Apple could create an innovative and ethical way to produce at low costs. I think that the managers of Apple who are truly benefiting from the low costs in China can probably afford to pay Americans to do these jobs. I am not saying that Steve Jobs should have been paying his workers out of his pocket. I just believe that Apple could be just as profitable if their factories were in America. And restating Freeman, profit isn’t the main purpose of the business anyways!


  2. I also wrote about Freeman’s Nike comments since I found it fascinating. However you discussed the power of google in uncovering unethical acts. Were you able to find anything on google about Nike’s issues regarding the flower fields? I wasn’t.


  3. Your post made me think about an interesting proposition: would you rather know about the terrible conditions in Shenzhen or is ignorance bliss? In other posts and comments, we have mentioned that, as the consumer, we have little potential to protest Apple by not buying its products. So, what does knowing about the issue do for us? Is it just nice to know? If we won’t do anything to change the corporations behavior, are we truly playing our part in the capitalist economy?


  4. I like the question you raised Spencer; does ignorance lead to bliss? Some people would much rather not know about anything going on in Shenzhen and is this mentality a bad thing? For those people who know about the conditions what does it actually mean to them? As we have realized over the past few weeks, consumers are still going to purchase Apple products and use them, so I guess it is just nice to know.


  5. As an individual we do not have much power, but if many people begin to value companies who are ethically responsible and treat their employees right, as a society we have power. There is obviously not going to be a widespread attempt to boycott Apple because of Foxconn but as consumers become more and more aware of the things Apple does, maybe they’ll begin to research how Samsung runs their business. It’s going to be a gradual shift but consumer awareness is going to shape which companies brands we value the most. I don’t think that Apple’s current business model is going to keep them on top forever.


  6. 🙂 if you SAY you are stealing from Freeman it is NOT stealing, it is referencing. 🙂

    You can’t steal freely shared knowledge. Yet. Although some IP lawyers may be working on making it illegal.


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