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Apple Case Study

Apple outsources the assembly of iPhones to China to take advantage of lower labor costs. This benefits Apple through reduced production expenses, but also China through new jobs. However, it costs the US jobs and workers in China face issues like low pay and poor working conditions. While outsourcing improves Apple's efficiency, it risks harming their reputation if workplace ethics are not addressed and contributes to American unemployment. On balance, outsourcing provides benefits to Apple and others but also drawbacks, so finding the right balance is important.

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John Pickle
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2K views2 pages

Apple Case Study

Apple outsources the assembly of iPhones to China to take advantage of lower labor costs. This benefits Apple through reduced production expenses, but also China through new jobs. However, it costs the US jobs and workers in China face issues like low pay and poor working conditions. While outsourcing improves Apple's efficiency, it risks harming their reputation if workplace ethics are not addressed and contributes to American unemployment. On balance, outsourcing provides benefits to Apple and others but also drawbacks, so finding the right balance is important.

Uploaded by

John Pickle
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Apple Case Study

1. What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign
countries, and particularly China? What are the potential costs and risks to Apple?
a. A benefit of outsourcing the assembly of the iPhone to foreign countries is the
cheap labor. Apple can produce and assemble parts at a cheaper cost in China
than in the United states. Another benefit is the location of having subcontractors
in China being able to respond at a fast rate to requests to scale production. Hiring
engineers was also easier to do in China at a faster rate.
b. Apple has to beware of the risk of their reputation and being associated to having
poor working conditions and poor safety records. Another cost is that the jobs are
oversees and many workers could benefit from those jobs here in the United
States.

2. In addition to Apple, who else benefits from Apple's decision to outsource assembly to
China? Who are the potential losers here?
a. The employers and employees in China benefit from Apple’s decision to
outsource assembly in China. There are more jobs available for those workers.
The customers of Apple products also benefit by having their expectations met
with an increase in efficiency of having jobs outsourced.
b. The United States is at a loss of those 700000 jobs that are outside of the United
States and could have been filled by workers here. Additionally, the workers at
Foxconn do suffer from low pay and rough working conditions that need to be
improved.

3. What are the potential ethical problems associated with outsourcing assembly jobs to
Foxconn in China? How might Apple deal with these?
a. Many of the factories where the assembly jobs are taking place have been accused
of low pay, unfair working conditions, long hours, and no paid overtime. Apple
would need to address these problems as the Apple products are associated with
Foxconn. Apple could bring these ethical problems to the subcontractors to help
improve working conditions and help increase pay. Apple could also help pay for
parts, or capital that would be need to create their products; thus, leaving money
to help pay workers fairly.
4. On balance, do you think that the kind of outsourcing undertaken by Apple is a good
thing or a bad thing for the American economy? Explain your reasoning?
a. Overall I think Apple needs to find a balance between keeping jobs in the United
States and sourcing jobs in other countries. By outsourcing jobs to China, Apple
is contributing to unemployment in America. However, some having some jobs in
other countries increases the efficiency of how the job is done. Apple benefits
from having their deadlines accomplished by maintaining a fast response rate. The
balance of where to produce jobs depends on how much efficiency Apple is
willing to maintain and how much they care about their reputation.

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