Posted by & filed under Apple, digital divide, exam2012A, Human Resources.

Description: CNN’s Stan Grant talked to a Foxconn worker in China about conditions in factories where Apple products are made.

Source: cnn. .com

Date: Feb 6, 2012
Questions for discussion:

  1. What are the biggest challenges of Apple outsourcing its manufacturing?
  2. Do you feel that this publicity will have any affect on Apples’ sales?  Why? Or Why not?

27 Responses to “Apple and Foxconn: Who made your iPhone”

  1. Lealand McCallum

    It didn’t say much about getting any time off.. Like I know in Northern Alberta There are camps that people sleep, eat and are pretty well on the work site.. But they get different amounts of days off (eg. 7 days working 7 days off). It doesn’t sound like there is such a system here but if there is I don’t think it’s such a terrible problem. And for the suicide I think it’s a bit ridiculous..

  2. Lealand McCallum

    And I’m an idiot.. Didn’t read the questions for discussion.

    I really don’t think this will have any effect on Apple’s sales. (see my previous comment for 1 reason why).

  3. Paige Magnussen

    I personally cannot believe the poor working conditions these people are suffering. I was also very surprised that a woman working at an establishment that produces Apple products had never seen an I – pad. It was also shocking that it was her first time in restaurant since working there, and her outings were very rare because the work is so demanding. I don’t think that anyone should have to describe their work as boring, not having their bosses care about them (including potential suicides), to demanding, and literally consuming all of their time. Miss. Jane said that she even sleeps at the factory and all she does is sleep and work. I guess the biggest shocker is that people are actually attempting to kill themselves over these working conditions. That says a lot about a company and the ethics they establish. I hope that this will have huge media coverage so it can make a difference in these working conditions. However unfortunately I don’t think it will have any impact on the amount of Apple products sold anywhere. To clarify I don’t think that this will affect sales at all, which is the only way that Apple would do something to change their ways. To conclude I was shocked by this video and I think something needs to be done!

  4. Nichelle

    This whole glimpse of Foxconn has honestly made my stomach turn. This poor chinese lady has no idea what an Ipad is yet spends her days making them and only had her first restaurant meal since working for Foxconn during this interview. Mass suicides, lack of employee respect, and earning less than a dollar an hour – all I can say is wow! A challenge Apple is definitely facing due to outsourcing its manufacturing is that these outsourcing companies subject their employees to such a poor working establishment. Just like people first impressions are the most important and that is no different regarding first impressions of companies. Foxconn is going to have a hard time “improving” their workplace because they should have been operating at a higher-level of standards in the first place.
    Regarding this having any affect on Apple’s sales, I would say yes and no. If people don’t know what is going on or how their iphones or ipads are being manufactured, I can’t see this having much of an affect on their sales. Yet there are some individuals who go to the extent of finding out information such as this which ultimately affects their decision-making. Personally, I already dislike my iphone enough that seeing this video encourages me not to purchase another apple product.

  5. Ashley O'Donnell

    To be honest, this article doesn’t surprise me much. It is a pretty well known fact around the world that large companies such as Apple outsource their manufacturing to countries where they can save money in manufacturing costs. The treatment of these foreign workers isn’t much of a shocker to me as well. Large corporations have been under fire for the poor treatment and working conditions of foreign workers or even the use of child labour. I would say the biggest challenge Apple is faced with in regards to its outsourcing is how the the employees making Apple products are being treated. However, western countries idea of equality and fairness is quite different from eastern countries beliefs. Therefore, I think it will be difficult for Apple to change policies enough to please everyone.
    I do not think this publicity will have any affect on the sale of Apple products. The news of the unfair treatment of foreign workers isn’t anything new to the world and there hasn’t much of a decline in sales of companies that do use the outsourcing of labour. Therefore, I really believe Apple’s sales will continue to remain steady and this article will virtually have no impact on it sales.

  6. Brittney Rainforth

    A major challenge that Apple faces by outsourcing its manufacturing is the loss of power Apple has willingly given up. Apple has no control over how its products are being manufactured, or how the employees are being treated. Apple also loses control over some of its brand name because the company Foxconn is attaining negative press, which reflects negatively on the Apple brand. Another issue Apple faces by outsourcing is the chance that their products may be manufactured incorrectly, which could therefore cause a huge recall of products. This would also affect Apple in a negative way.
    I personally wish that this bad press for Apple would affect their sales in an extremely negative way, which would then force Apple to use a manufacturing company that is more socially responsible and ethical. However, I know that this will not occur. This negative press will have only a slight effect on Apple’s sales, if any effect at all. Apple’s brand name is so strong that people will continue to buy their products, regardless of how the products are being manufactured. I think this is because, although many people know how poorly employees of Foxconn are being treated, North Americans do not literally see the effect because the manufacturing plant is half way across the world. It is that “out of sight, out of mind” type thing. Which is really unfortunate.

  7. Tim Anderson

    Apple’s biggest challenge in outsourcing to China will be making the right/ethical decision not based on bad press or public pressure but on values that demand that all people be valued the way Canadians or Americans expect to be valued. There is a lot of bad publicity generated by companies like FoxConn because of the poor working conditions they provide to their workers. This reflects very little on Apple and the products they sell. Most North Americans do not want to really consider the changes to lifestyle that they would have to make if they were to demand the changes necessary to correct many of the wrongs being done in the outsourcing world. Apple has a responsibility to put pressure on FoxConn to change working conditions whether or not their profit margin suffers. However there’s very little chance of that happening because Apple, like so many other companies prefer to rate their businesses performance based purely on profits rather than a broader index that would include social responsibility.

  8. Tim Anderson

    I disagree. Apple is one of the most valuable company’s in the world. They wield tremendous power and to think they have no control over how their products are manufactured is naive. What’s most important to Apple is their profit margin, not social responsibility.

  9. Tim Anderson

    There is absolutely no similarity between Northern Albertan oil fields and FoxConn manufacturing plants. We choose to go north and the compensation is ridiculously high; many people in china have no other choice but to work for next to nothing.

  10. Amber Dashney

    I was shocked when I saw this video, I think its horrible that the people making these apple products are working for $1 an hour, for a company that makes billions paying the people who manufacture the products so little is ridiculous and should not be happening. I also think its horrible that people are committing suicide because of this job, obviously something had to be done but it doesnt sound like they really improved like they are claiming. But I still dont think this will affect apple sales any. We are living in a technological world and apple is at the top for technology. If anything this publicity should be an eye opener for other apple factorys and something should be done to improve the working conditions and environment.

  11. Paige Rosner

    I believe that this kind of investigative journalism (though necessary and appreciated) will do nothing to change consumer response to apple products. We’re not talking about GAP jeans here – these products are not easily substituted. Furthermore, news stories by the Globe and Mail, CNN and BBC have highlighted issues like the use of colton (and the mining atrocities associated with it), labour conditions, environmental concerns (associated with the materials and lifespan of this technology) as well as issues of corporate social responsibility. Unfortunately, however, the people who read these articles probably did so on their iPhone or iPad to begin with. Furthermore, and this is not meant to be an excuse by any means, the conditions highlighted in the video sounded positively utopian compared to working conditions in other factories in the same region that I have read about. I feel that the apple consumer’s lack of awareness and thereafter lack of active sympathy results from detached perceptions of globalization, the division of process and product which has permeated western consumption, and this crazy notion of national sovereignty. I assume that apple is very much aware of its latent customer base and does exactly what it needs to do to make its more disgruntled consumers feel as though they have done something without actually disrupting the ‘well-oiled machine’ that is the Microsoft supply chain. Unfortunately, in the case with systemic outsourcing, the control that a firm has over such issues is minimal and their motivation, as previously discussed, lacks significant consumer impetus.

  12. Linli He

    Apple’s biggest challenge in outsourcing in China is to concern working conditions and health of workers at Foxconn Corporation. It’s well known as largest companies outsource their manufacturing process to countries which have cheap labor in order to cut the manufactring cost. Chinese suppliers are under tremedours pressure from Apple to increase supply to keep up with worldwide demand for Iphones and Ipads. They have to work as long as 11 hours a day, 7 days a week with only one-hour long break during lunch. For this they only make about 2000RMB a month, equivalent to $320 monthly.On January 2nd approximately 150 workers took to the roof of Foxconn’s factory in Wuhan threatening mass suicide if their demand for better payment were not met. In addition, those worker work in the plant are exposed to vase amount of aluminum dust and use poisonous chemical to clean uo the screens of Iphones and Ipads. Their health are doubtful. A rash of worker suicides at the Foxconn plant triggered concerns about the poor factory condition and health issues in the society. Anyway, I can image what and how working condition those people are facing. However, the girl in the Foxconn who assembles thousand of Ipads everyday had no idea what Ipad is yet, the shocking fact happening on her is still surprice me.

  13. Kelsey Roberts

    This video is quite shocking, and alarming. Apple prides itself on product leadership and friendly service, yet its products are being manufactured in a factory driven by poor working conditions and minimal workers rights. In my opinion, this is a very negative reflection on Apple’s public image and values. The mere fact that workers were told they would be fired if they spoke to the media or any news reporters, shows that these individuals are being mistreated and Apple is well aware of it. Personally, as a owner of multiple Apple products, this makes me second guess any further purchases, as I know feel my dollars spent on their products goes to supporting this kind of unethical and socially irresponsible behavior on Apple’s behalf. Whether or not these incidents of worker suicides, and poor working conditions of the Foxconn factories has an effect on Apple’s will depend on how the public chooses to react. The more media and attention this issue gets, the more people will become aware of the situations and hopefully do something to force Apple to put an end to this.

  14. Tim Anderson

    North Americans have a tolerance for a certain amount of casualty (other people suffering) in order to maintain our affluent lifestyles. We as consumers must value the person on the other end of our products as much as we value ourselves. We must force Apple to respect the sanctity of life of the workers. It starts with us, the consumers. If we are not willing to demand a change, our laws and the businesses that they regulate will conform to what we care about.

  15. Rachael Brown

    One of the challenges that Apple faces when outsourcing it’s manufacturing is the criticisms they receive for working with companies that abuse their workers. Apple has received backlash for using Foxconn to manufacture products such as iPads, iPods, etc. Foxconn is known for treating their workers like “animals” and employing a “military culture” with unpredictable hours and inadequate rates. In the CNN interview, the woman being interviewed said she “works, sleeps, and eats” at Foxconn and makes less than $1/hr. In fact, Foxconn factory conditions are so negligible that workers threatened to repeat the mass suicide that happened in 2010, to protest poor treatment. In 2010 it took more than a dozen workers to commit suicide for Foxconn to respond to the poor working condition pleas. In response to the negative media, Foxconn was forced to make changes by providing counseling and boosting pay. This negative publicity has a direct impact on Apple’s brand because they will appear to have limited corporate social responsibility (CSR). Apple wants their brand to reflect high quality products not medieval working conditions at manufacturing plants that they use in China.

    In my opinion, CSR involves employing manufacturing companies that positively reflect Apple’s brand name. The negative publicity that Foxconn has received over time will begin to tarnish Apple’s brand. However, I believe Apple will be forced to make changes if this publicity begins to decrease sales. Ironically, at this moment in time I am typing on my MacBook Pro, listening to my iPod, and texting on my iPhone. Given these facts, it is difficult to say whether or not Foxconn conditions will affect Apple’s sales.

  16. Laura

    The biggest issue with Apple outsourcing its production is dealing with other countries’ labor laws. While labor laws in North America have clear rules and regulations for the number of hours employees can work, and compensation for over time, and minimum wage laws, in other countries like China or India, the laws may be more relaxed or non-existent. It’s not necessarily the fault of Apple that workers in the companies where their good are manufactured are treated poorly, but Apply will receive poor publicity for being associated with them. Essentially, the issue comes down to human rights from country to country. While it may be appalling to an American to hear that a worker in China may only receive a dollar a hour to work, without a frame of reference for the standard of living in China, the American population’s judgement may be extreme. Certainly, no one in North America would want to deal with such low wages, or non existent breaks and strange hours, but perhaps the people in China would not want to deal with working conditions that we take for granted either. This publicity will probably not adversely affect Apple’s sales, mostly because it’s taken for granted that these large companies will use outsourcing to reduce costs. Apple tends to have a more ‘green’ image than many other companies, and based on that, and the popularity of ipads, ipods, and iphones, it seems unlikely that consumers will change their purchasing habits.

  17. M

    The biggest problem Apple or any other type of company that is outsourcing there manufacturing is the difference in cultural norms and what’s acceptable in terms of working conditions. What is deemed acceptable in China may not be allowed in Canada. This is where it really falls on the company to be socially responsible, they clearly know the working conditions that are happening over there and how they would never be allowed to operate in Canada and yet production continues. Putting out a nice apology to the public saying you care about all your workers worldwide is all well and good but they did not show any proof of actually change. Especially when you have a dozen workers commit suicide you think Apple might pay a little more attention to what’s going on had they decided to be this more socially responsible company. This problem may eventually affect Apples sales eventually but I really do not think it will soon unless it becomes more of a front line, known issue. Until our consumers, government or some other institution decides to publicly goes against Apple in a large viewer reaching way, and talk about Foxconn’s horrendous conditions not enough people will know about this problem.

  18. P

    I would say that Apples biggest challenges regarding Outsourcing would be the publicity articles like this. America and China have drastically different cultures, values and norms that are seen as acceptable. I’m not saying what they are doing at Foxxcon is right but I think this article make it seems worse than it actually is. Apple does not own Foxxcom nor does it manage the activities, Apple would create a partnership with foxxcom probably to get the most volume for the cheapest price. It is not their responsibility to monitor how Foxxcom is manufacturing their products. Of course if issues like this arise they should contact foxxcom and inform them that they cannot take this negative publicity and will most likely increase how much they pay in order to maintain a good company morale. It also states that Microsoft had some of the same issues with a foxxcom organization and strived to improve them. I think it should be Foxxcom that is under scrutiny not Apple and Microsoft.

    I don’t think that this will have any effect on Apple’s sales, Apple build strong loyalty with there customers and I think it would take some drastic events to deter people from buying Apple products.

  19. Lacey Dodds

    I think the biggest challenge that apple will have with outsourcing its manufacturing is exactly the things described in this video. Apple and many other companies choose to outsource because of the cheap labor costs but because Apple does not directly control Foxconn, they cannot see what is actually going in inside the factory at all times. Things like poor working conditions, irregular breaks, etc. The result of this is that if a company like Foxconn is found to have such poor working conditions, it can cause extremely negative publicity that Apple will have to deal with. Workers’ rights issues like these are often the reason why many people choose not to buy particular brands. This is similar to Nike and Walmart who have both been scrutinized for similar unfair workplace practises. I think that this negative publicity will impact Apple’s sales, but not dramatically. Yes, there will be some people who watch this video who will become outrage and refuse to buy Apple and resort to buying the competition (such as Microsoft). But there will be people who watch this video and do not care, and there will be people who do not see this video and just do not have the information—these sales will likely make up for most of the lost sales.

  20. Tuan

    The first noticeable barrier that comes to my mind is the language and cultural gaps. Anyways, I think the biggest challenges Apple faces when manufacturing goods in another country is the loss of managerial control. Whether Apple signs a contract to have Foxconn to perform the function of an entire department or a single task, Apple is turning the management and the control of that function over to Foxconn. Even though Apple has a contract, managerial control will belong to Foxconn. Therefore, Foxconn will not be driven by the same standards and mission as Apple. Foxconn will be driven and motivated by profit. Since the contract will fix the price, the only way for Foxconn to increase profit will be to decrease expenses. Lastly, like any other third world countries there is a good chance that the outsourcing country will have an unstable governments and the economic policies of these countries can switch from one political cycle to the next. I feel that this publicity will not have any negative effect on Apples’ sales because personal, I like all of Apple product, just cannot afford it. Anyways, I think Apple produced a lot of great electronic products. And as long as there is a demand, Apple will supply.

  21. Jay Retzlaff

    I believe that the biggest challenge for Apple outsourcing its manufacturing is changing its working environment for a different culture. Having all of their products outsourced may be cheaper for the company to do but with manufacturers like Foxconn can give Apple a bad name. These work conditions for the employees are poor and it makes me sad hearing that employees have taken their lives because of it. SO if news like this does hit the media i believe will have an affect on Apples Sales. I believe this because their is many people out their who are strongly against situations like this and that can discourage them from buying apples products. Then again their are a bunch of people who don’t care so it may bot affect Apples sales drastically. It may sound bad but hearing news like this doesnt influence my decision at all to buy a product. So personally I would still buy from apple. Also big companies like Apple outsourcing their manufacturing is a common thing. So as bad as it sounds for Apple, it is just as bad for some of other people favorite companies as well. So as much as it is shocking to some people, it is a common thing.

  22. Trevor Armstrong

    Outsourcing work overseas, where labour costs can be drastically reduced will always be viewed negatively – as it gives the perception that it is placing the corporate interests of the company (and its shareholders) over the job security of domestic employees. While I personally believe this to be true, it is evident by the amount of Iproducts bought on a daily basis (including those I’ve purchased myself) that there has been no (negative) effect on Apple’s bottom line. While this negative publicity is certainly bad – people will still purchase Apple’s products because of the ‘hip’ image they portray.

  23. Jannelle Batt

    Although these working conditions of the workers in Foxconn factory’s is sad to hear about and a bit disturbing, especially with the mass suicide threat if conditions are not improved, I do not believe that Apple will see a huge affect to their sales because of it. Apple must think that these conditions, such as the pay which is less than a dollar an hour or the fact that there is no conversation allowed between the workers on the factory floor which leads the workers to believe that the place is run with a military culture, would harm their sales because of the fact that Foxconn threatened the workers with being charged with criminal activity by contributing to a simple interview. I do think though that Apple and Foxconn need to take more steps towards improving the working conditions of the workers so that people who work there don’t hate themselves so much that they would contemplate suicide and act on it. Even though the worker who was very unhappy with her job at Foxconn and making Apple products, like the Ipad for example, would rather go back to college than work in those conditions did admit that she wanted the ipad so I don’t think apple will suffer to much over this publicity.

  24. Dennis Zhong

    What are the biggest challenges of Apple outsourcing its manufacturing?

    the challenges are quality control, communication issues, and technology protection.
    Apple need to make sure the products’ quality, because poor quality product can cause negative impacts for apple.
    Apple and Foxconn have different organizational culture and oversea cooporations.
    Apple do not want other organization know about the iphone technology, because they can make similar products and that will hurt apple’s market shares.

  25. Billy Abesdris

    The biggest challenge to Apple outsourcing their manufacturing is what factories to use. It would not be ignorant to reduce their main concerns to 3; Price, Quality, Public Relations. If I was an executive in the supply chain department of Apple, I would seek to find a manufacturer who can make the best product, the cheapest way, and with the least information leaking out to the public about how poor the working environment is. Although the first two concerns have obvious importance, the debate centralizes around the third. For many sympathetic Apple product owners, some product satisfaction is lost to the thought of little lue ming pouring her blood/sweat/tears into the new Ipad 2. Not moments after this sympathy arrives, it’s already gone with the sheer joy of throwing angry brids at silly pigs. Humans are emotional about things and although 99% don’t really care about little lue ming, the satisfaction lost, has a direct effect on how much one is willing to pay for a good. It would be very hard to quantify the exact amount of sales Apple might lose to sympathetic users and I have no grounds to guess if it would be greater than or less than the cost of using a more labor friendly factory who pays 1 Yuan instead of Wu Jiao.

  26. Sagrika

    This video was pretty shocking and hearing the story of the woman working for Foxconn who have never even seen an IPad when the entire time she is working on making one is kind of disturbing. I do not think Apple is giving proper care and the proper work environment for its workers. Apple should be taking care of its employees and making them feel worthwhile working for the company but everything opposite is happening. The mass suicide that took place just to make Apple realize the poor working conditions that its giving to their employees was also disturbing. Foxconn is making its employees work like animals with such low wages that is going to get Apple some bad publicity. As far as sales go,if articles like these keeps publishing and people become more aware of the working conditions of people in other countries, then the sales might drop. But as of now Apple has a strong base in the market and has already established a good loyalty base with the customers. So it might take some time before Apple sees the drops in its sales.

  27. Dave B.

    I think the biggest challenge for Apple and many of the global companies is having a stable and healthy relationship with its employees at these factories. Apple wants to keep the costs down to gain a bigger profit but its a challenge to pay the wages they do and still look the “good guy”. It was the same situation with Nike and other global companies. China and India have massive populations and the job market is indeed tough so people are willing to work for less and less pay to even have a job. This is good for the global companies but bad for the monotony of the employees lives as seen in this video.

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