The concept of the globalization of human capital is frequently discussed in relation to firms expanding their global operations. This involves employees being spread out across the world by their employers. It includes various entities such as companies, employed and unemployed individuals, stockholders, consumers, contractors, the supply chain, and economies. Companies opt to expand globally because it leads to lower labor costs and increased productivity.
The inevitability of firms expanding their global operations arises from the unique offerings and innovations present in every country, which can provide a competitive advantage. This highlights both the opportunities and threats faced by global companies in formulating their strategies. Crucial factors for these companies include cost and human capital considerations. When President Obama requested Apple to relocate jobs back to the US, it proved nearly impossible for the company to comply.
The case study found that an iPhone costs $179 to produce, but is sold for $500. This results in a profit of $321, which is important for maintaining competitiveness. Using cheap labor in other countries helps global companies achieve price competitiveness, but this may make it seem like Apple doesn’t care about its own country and is only motivated by greed. These are challenges faced by global companies. The executive’s statement that the company’s main responsibility is to create the best product invites further discussion.
According to Apple, they are not obliged to solve America’s problems. Despite the potentially harsh nature of this statement, I believe it is a reasonable position. Being a global company with multiple offices worldwide, Apple’s primary objective is profit generation. Therefore, it would be unrealistic to expect them to fully address America’s issues. Instead, Apple prioritizes becoming the leader in innovation and success. As a result, their focus is not on resolving America’s employment concerns but rather on producing high-quality products. In this situation, we must consider who the stakeholders are and whether they have any responsibilities.
In this scenario, there are two parties involved: Apple and Foxconn companies, along with the Chinese government. Apple bears a global responsibility for its employees and must recognize that a corporation’s reputation relies on both its products and public perception. As Apple’s headquarters reside in the United States, it is vital to uphold a positive reputation. Additionally, Apple must guarantee that their products maintain high quality while being competitively priced. Conversely, Foxconn places importance on its workforce and the exported products.
The government stepped in to address the unfair and cruel working conditions at Foxconn. It is crucial for Foxconn to take into account the previous issues Apple faced in China. The Chinese government had a duty to safeguard its people from dangerous workplaces and make sure that Foxconn was held accountable for labor infractions. Personally, I believe iPhones are already overpriced, especially considering they generate a profit of $321 per phone. Additionally, would you be willing to pay more for an iPhone if it were manufactured in the United States?
If an iPhone is manufactured completely in the United States, I believe there should be no increase in price. Many American products have similar costs compared to their international counterparts. For instance, when all factors are the same, t-shirts have a comparable expense regardless of whether they are produced overseas or in the US. Consequently, an iPhone should not be an exception to this rule. Despite potentially lower profits per phone, I think they can still maintain or even increase sales figures. So, how much more would you be willing to pay for an iPhone assembled in China with improved labor conditions?
If Apple were to increase the price of iPhone assembly in China, why wouldn’t they consider manufacturing it in America instead? It would be more cost-effective to bring workers here and establish a plant. What compromise would you make? This also relates to my previous question. I still hold my position on the iPhone. Raising expenses for better working conditions in another country doesn’t seem logical. To what extent do you think negative media coverage has influenced Apple’s decision to seek an evaluation from the FLA and Foxconn’s subsequent decision to improve certain salaries?
What do you think will happen now? I believe that the negative media coverage has prompted Apple to become more conscious of their corporate image, which in turn influenced their decision to request an FLA assessment. They could not afford to maintain a perception of being heartless and negative. Previously, they claimed that their responsibility was solely to create the best product possible and not solve America’s problems. However, the revelation of unfair working conditions and labor violations further reinforced the perception that the company was greedy and indifferent towards its employees.
Foxconn, a leading manufacturer in the country, valued its efficiency and effectiveness. It could not tolerate being seen as a “sweat shop” where employees worked long hours for low wages. The suicides among its workers also damaged its reputation. To restore their public image, they had to increase certain salaries. Both companies needed to show that errors were promptly fixed upon discovery. With the news now out, they will probably undergo numerous inspections to prevent future scrutiny.
