APPLE / FOXCONN
(Stakeholder Assignment)

Li Ming jumped to his death after working for Foxconn. His death influenced other suicides in 2010 and 2011 at Foxconn factories over unsafe working conditions. It was unclear why Li jumped but he was reported to have been working for Foxconn for 2 months and had been living in the factory dormitories.

This claim was made by a Chinese workers’ rights organization and was reported by Chinese Labour Watch (CLW) . The 31 year old jumped to his death from a Foxconn building in Zhengzhou, China. Foxconn is the name of the company that has the factories that manufacture Apple, Nintendo, Sony and many other popular brands’ products, and employs China’s biggest private sector employer at 1.2 million workers.

This is not the first time that Foxconn has been under controversy about the working conditions of workers in the Taiwanese firms. In 2010 the company was faced with allegations of forcing its workers to endure “sweat shop” conditions that led to a spate of suicides during that year. Also, January 2012, a group of 150 workers in a Foxconn factory in Wuhan, in the central Hubei province, protested against working conditions by standing on the roof of a factory building and threatening to commit suicide. This is a large human rights issue and is putting Foxconn under a lot of media pressure.

Mr. Li was found dead in Zhengzhou, outside the factory where Apple produces and manufactures it iPhone X, and it is the place where half of Apple iPhone’s are produced. About 350,000 workers reportedly work on production lines in the city to make iPhones at a rate of 350 per minute.

https://www.telegraph.co.uk/news/2018/01/07/suicide-chinese-iphone-factory-reignites-concern-working-conditions/

Main ethical issue: Mistreatment of Workers in the Foxconn Factories and Poor Work Conditions

In this article, it outlines how the Chinese workers are being mistreated in the Foxconn Factories. They work for ling hours under not-so-great conditions. These working conditions have lead to workers protesting for their rights, leading up to many (too many) workers committing suicide. This is a large ethical issue and Apple is contributing to it.

The employees at Foxconn are very important and noteworthy stakeholders in this situation/ethical dilemma. The employees at Foxconn interest in the company is that they are the people who are manufacturing and producing the products inside the factories. Without the employees, there would be nothing to manufacture or sell, which means to business. At Foxconn in Zhengzhou, there are over 350,000 employees and they produce over half of the world’s iPhones. In the summer, the factory is the most busy, as it produces over 500,000 phones a day at upto 350 phones per minute. In fact, because of this large number of employees, the factory has sprouted what residents have dubbed "iPhone City." In this “city”, factory workers live in dorms in 10- or 12-story buildings outside Foxconn's gates, while a migrating workforce of entrepreneurs and vendors sets up shop below to make a living cooking street food, offering massages, or selling socks and other knickknacks. The impact of these employees is so large that they have created a whole business for street vendors. Therefore, it’s safe to say that the employees at Foxconn have direct interest in the company. The employees at Foxconn are an example of primary stakeholders. The first reason that they are primary stakeholders in this situation because the decisions made by Foxconn directly impact them. The actions taken by Foxconn not only directly impact their income, but also directly impact their living situation and food. Secondly, they are primary stakeholders because they can directly impact the actions of Foxconn. If all 350 000 employees stopped working to strike and demand more, they would impact the decisions that Foxconn makes, and Foxconn would be obligated to consider them, as the employees directly affect production and manufacturing. Finally, these employees are directly impacted by the suicide of Mr Li. There were many employees that were obviously mourning the loss of Mr Li, and his death was unexpected but common. There had been a wave of suicides among Foxconn workers in 2010 and 2011, prompting Apple and Foxconn to make changes at the factories. Therefore, Mr Li’s death overall positively impacted the employees. Because of the fact that his death was so public, there were many new outlets that were condemning Apple and Foxconn, which forced them to improve employee’s work and living conditions, benefitting the employees. In conclusion, the employees at Foxconn are primary stakeholders of Apple and were directly affected by this event.

The other companies that manufacture out of the Foxconn factories are also important stakeholders in this situation. The other companies interest in Apple is that they are not only often Apple’s competitors, but share employees and resources with Apple. The other large tech companies that manufacture out of Foxconn are Acer, Blackberry, Nintendo, Dell, Huawei and Hewlett-Packard. Though not many of them manufacture out of the Zhengzhou factory (as Apple takes up the majority of that factory’s space), there are other factories that these companies manufacture out of, such as factories in Wuhan, Guangdong and Shenzhen. Foxconn has been in this business for 15 years, and all of these major companies have really relied on them to be able to successfully manufacture. They’re the world's largest provider of electronics manufacturing services and the fourth-largest information technology company by revenue.The company is the largest private employer in Taiwan and one of the largest employers worldwide. The other companies’ interest in Foxconn is to hire them to manufacture their goods and distribute them worldwide. Though many other companies mentioned aren’t as involved with Foxconn as Apple, they still heavily depend on them for their manufacturing needs. In this example, these other companies are secondary stakeholders. The first reason that they classify as secondary stakeholders is because they are still impacted by the decisions made by Foxconn, but not directly, and their companies income doesn’t entirely depend on Foxconn and their actions. Secondly, they are secondary stakeholders because they can’t directly impact any of Foxconn’s decisions, but can indirectly influence their decisions by being associated with them. These companies were also impacted by the suicide of Mr Li. As previously mentioned, the suicide lead to a lot of backlash and negative publicity towards Foxconn. Therefore, it’s safe to say that the companies were negatively impacted by this news, as it looks bad on a company to be involved with a manufacturer like Foxconn (one that had such terrible working conditions that it leads to worker suicide). In conclusion, the other companies in the factories are secondary stakeholders of Apple/Foxconnand were negatively affected by Mr Li’s death.

The consumers of Apple products are another example of a stakeholder in this situation. The interest of the customers in the business are the people who purchase the iPhones, iPads, Macbooks and other products that Apple creates. The consumers are the people that Apple is creating their products for. Without customers, there would be no one to create the products for. Apple is a very popular company and is arguably the largest tech company in the entire world. The average person usually owns an iPhone in most parts of the world. In total, the iPhone X was initially available in 70 countries worldwide, and there was then 13 more countries added to that list. The top ten countries with the most amount of Apple consumers are Japan (53.8% of the population), USA (47.4% of the population), Australia (44.9% of the population), Great Britain (42.5% of the population), South Korea (33% of the population), Germany (21.4% of the population), France (20.8% of the population), China (18.1% of the population), Italy (17% of the population) and Spain (9.7% of the population). Usually, the iPhone seems to perform better in English-speaking countries, with Japan, Korea and China being the exceptions. Surprisingly, Japan takes the first spot, where the iPhone had a 70% market share until the Government forced carriers to stop subsidizing it. The consumers of Apple Products are perfect examples of Primary stakeholders. The first reason that they are primary stakeholders is that they are directly impacted by any action taken by Apple, as they are the ones who will be buying the products from them, even with any action taken. On the contrary, they can also directly influence Apple’s decisions as they have control over what they purchase. They can influence Apple into making the products that they want to purchase, as Apple’s profit/revenue isma dependent on the consumers (as customers can easily decide to purchase from their competitors). The consumers of Apple products were impacted by this event, but not necessarily positively or negatively. They were affected by Mr Li’s death as they can decide not to buy Apple products anymore (after seeing the employees’ working conditions) and will purchase from elsewhere (affecting how they communicate with other people). In conclusion, Apple consumers are an example of a primary shareholder who are affected by this event.

The Chinese Labour Watch (CLW) are also an important stakeholder in this situation. The Chinese Labour Watch is a New York based non-government organization whose mission is to defend worker’s rights in China. They accomplish this mission through research, advocacy and legal assistance. They seek to help China’s workers become more informed of what their rights are and feel more empowered to defend and realize those rights in difficult situations. They have several programs in mainland China to improve local working conditions and promote workers’ legal rights.. As a result of these programs, the workers become more capable of negotiating with employers and demanding fairer wages and working conditions. Examples of subjects taught in these classes are what to look for in a contract, health dangers in workplaces, and how to bring grievances to the local government's labor departments. The Chinese Labour Watch’s interest in Foxconn is to ensure that the company is treating their 350,000+ workers in the conditions that they deserve, and that Foxconn employees’ rights as workers are being held up. Specifically after the death of Mr Li, the CLW will be especially interested in how Foxconn will adapt their worker policies to ensure that a situation like this doesn’t occur again. The Chinese Labour Watch is an example of a Secondary Stakeholder in this situation. The first reason that they are considered a secondary stakeholder is because they are impacted by the actions of Foxconn, but not directly. Their income doesn’t directly depend on Foxconn’s actions, but their actions can lead to investigative work for the CLW. Secondly, the CLW’s actions can’t directly impact/influence Foxconn’s decisions, but they can indirectly influence their decisions, by pressuring them to always do what’s right for their employees. The CLW was impacted by Mr Li’s death because it gave them a new job to do - investigate the death and to take a look at how Foxconn treats or mistreats their employees. In conclusion, The Chinese Labour Watch is an example of a secondary stakeholder and are impacted by the death of Mr Li.

Shareholders and Investors in Apple are examples of primary stakeholders in this situation. A shareholder is defined as someone who is an owner of shares in a company, while an investor is defined as someone who puts money into businesses with the goal of turning a profit. As for Apple, it’s a public company, which means that it’s owned by its shareholders. The largest shareholder in Apple is Arthur Levinson, who holds 1.16 million shares in Apple. He is also the chairman of the board at Apple and the CEO of Research and Development. Tim Cook, the current CEO of Apple has the second most amount of shares with 901, 474 shares. Another large shareholder is Craig Federighi, the senior vice president of software engineering who owns 460,367 shares. The interests of these shareholders/investors in Apple and Foxconn is to invest money into the company(/ies) and turn a profit from sales (making more that what they initially invested).Those who invested early will have made plenty of money,, with commentators saying that an investment of $990 back in 1980 would have grown to $521,740 today – not including dividends. Shareholders and investors in Apple are examples of primary stakeholders in the company. The first reason that they’re considered primary investors is because the actions made by Apple and/or Foxconn directly impacts how much money they make. For example, if Apple isn’t selling enough products, then the investors are losing money (and vice versa). Secondly, the shareholders and investors in Apple also directly affect the decisions made by Apple and Foxconn. When someone has enough shares, they are able to weigh in on decisions made at the company. The shareholders and investors were negatively impacted by the news of Mr Li’s death. This story shone Apple in a negative light, and this negative light could potentially draw Apple to losing profit from people who don't want to support them anymore, which would cause the shareholders/investors to lose the money that they invested. In conclusion, shareholders and investors in Apple are primary stakeholders and were negatively impacted by Mr Li’s death.

The Chinese government is a secondary stakeholder because they are not directly affected by Foxconn decisions but are still responsible for the company. The Chinese governments interest in the business is that Foxconn employs 1.3 million workers which greatly adds to and helps the Chinese economy. The Chinese government is impacted by Foxconn because the government is responsible for labour laws and other ethical issues that a company may be practicing. So the Chinese government is indirectly affected by what Foxconn does because they are partially responsible for what Foxconn does. Since the Chinese government is responsible for labour laws and workers safety the suicides committed by the Foxconn workers are the governments responsibility as well.

News outlets are huge secondary stakeholders since they report on Foxconn's activities, however they are not directly affected by those decisions Foxconn makes. News outlets interest in Foxconn is to report on what the company is doing and any incidents related to Foxconn. News outlets are impacted by what Foxconn does because they report on what the company is doing, so if they are not doing any thing news worthy then news outlets do not have a story however if Foxconn is participating in any ethical issues then news outlets have something to report on. With Foxconn's current ethical issues this greatly benefits news outlets because they have an interesting story to tell and report on.

Samsung, one of Apples top competitors is a secondary stakeholder because Samsung is indirectly impacted by what Foxconn/Apple does. Samsung's interest in Apple is seeing what that company offers compared to what they do/offer to consumers. Samsung is impacted by what Apple does since Apple has most of the market share for electronics, when Apple releases a new iPhone or electronic Samsung must meet consumer needs and release a new phone. However in this case bad media for Apple means that Samsung will have better outlook and non-loyal customers may consider jumping ships which is beneficial to Samsung. Since Foxconn/Apple have a bed reputation at because of this news article this allows Samsung to gain more market share and is very beneficial to Samsung.

Suppliers are primary stakeholders because they are directly impacted by what Apply/Foxconn does. Suppliers interest in the company are to supply the tools and parts to the manufacturing company (Foxconn) to produce and make Apple products. Suppliers to Foxconn/Apple want to create long prosperous relationships because it benefits both the supplier and Foxconn. Suppliers are directly affected by this ethical issue Foxconn faces since the suppliers will have less of a demand for parts and will then start to lose money potentially. Also the suppliers being in relation with Foxconn could ruin their reputation because of how sever the ethical issue is.

The Zhengzhou community is a primary stakeholder because they are largely affected by what Foxconn does. Zhengzhou community's interest in Foxconn/Apple are to keep the community safe and relatively happy. By having a company like Foxconn that treats their workers poorly to the point were one decided to commit suicide this largely affected the community and has put a shadow over Zhengzhou. The people in this community have been negatively impacted by Foxconn/Apple's ethical issues since many other workers have decided to commit suicide as well and many of workers are unhappy and depressed working in those horrible conditions. Not many members of the Zhengzhou community want to work for Foxconn because of how poorly workers are treated and because workers are committing suicide this is negatively impacts Foxconn and the local community.