Business Ethics and Corporate Social Responsibility an Apple in Chinese factories

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Corporate Social Responsibility Assignment Question

Theory:

• Autocratic management results in a lack of job enrichment (page 304 of textbook) which influences job performance (to some extent) and demotivation of the workforce.

• Globalisation (p 48 of textbook) driving need to keep costs down.

• Business ethics and Corporate Social Responsibility (CSR) – Page 65 of textbook.

Corporate Social Responsibility Assignment Solution

Living conditions

According to a documentary released by BBC, named 'Apple's Broken Promises', the condition of workers in Chinese factories involved in assembling the components of iPhone6 is quite miserable (Bilton, 2014). This visit which was carried out in Pegatron factories revealed that the living conditions of these workers were such that, they were forced to put in long tedious hours. In many cases, there was hardly any form of privacy available at the workplace. BBC has its undercover reported in these Chinese factories to unravel the real scenario. The results were shocking with respect to the fact that, these workers were provided highly undesirable housing, and over packed dormitory, where one room was shared by 12 workers (Bilton, 2014). Given the fact that most of the time workers had to put in 16 hours of work a day, they were rarely compensated in the form of overtime pay. There were video clips showing how the sleep deprived workers had to work in miserable conditions, many of those were juvenile workers (Bilton, 2014). Under such a scenario, it is important to understand the underlying causes and implications of such actions by multinationals

Under a rapidly changing business environment, where organizations are seeking out most economical locations for production, the concept of globalization has come to stay. Most companies from developed economies have found a low-cost option in the form of resource deprived emerging economies. These economies like India, China, and Brazil are characterized by low labor costs and lesser bargaining power of employees. In this context, the incidents of 'sweat shops' and exploitation are commonly heard phenomenon (Kemp & Gibson, 2005).

Organizations need to understand that, the idea of business ethics and corporate social responsibility, is to make sure that the 'profit driven' motive of business, is equally complemented by four forms of considerations, namely, economic, legal, ethical and social considerations. According to (Moore & Wen, 2008), the economic responsibilities relate to building up better sources of income and providing financial stability, while legal responsibilities refer to the bare minimum expectations in terms of legal compliance with national and international laws. Similarly, ethical responsibilities pertain to fair practices, while social considerations are in the form of contributing effectively towards local community, stakeholder satisfaction and protection of the physical environment and employee welfare.

According to (Goel & Ramanathan, 2014), with regard to fulfilling its obligation towards employee betterment and welfare, organizations need to understand the importance of a favorable working culture and a motivating workplace. Under an autocratic management, the communication is generally 'one-way', which is the primary cause of employee demotivation. Under such a situation, the employee gradually builds up resentment, which impacts the cooperative spirit as well as employee productivity in the long run.

Thus, organizations need to understand that the idea of balancing the various dimensions of CSR, also includes taking steps for improving both intrinsic as well as extrinsic factors which motivate the employees (Moore & Wen, 2008). While intrinsic factors are in the form of better pay, better work-life balance and rewards, and recognitions, extrinsic factors pertaining to better conditions of work at the workplace. Thus, there is a need to effectively follow the right kind of CSR strategy to attain better performance and productivity.

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