Global Business Environment- Making the Apple iPhone
The report would discuss the case study of Apple manufacturing. Apple is the technological organization headquartered in US but most of the manufacturing of Apple is done is done offshore by the subcontracted firms. It is approximately 90% of the total manufacturing. At the headquarters, the activities such as product designing, software engineering etc. are undertaken. Apple has lots of benefits for outsourcing its manufacturing in others pars of the world especially in china as cost of labor is very cheap in china and china responds to the demand of the Apple on short notice. The report would provide the four important issues that are faced by Apple in order to manufacture the products from Chinese firms especially from Foxconn.
Key Issue Identification
The main issues that are identified in the case are-
1.Poor human resource management practices in Subcontracted organizations- The subcontracted companies of Apple are not following an effective and efficient policies of human resource management. There are poor working conditions in the firms and moreover low pay scale are provided to the workers and even they are made to work on overtime basis without any additional pay. In addition to this no health and safety standards are followed at these organizations. This is the rising issue which is faced by the Apple in china.
2.High cost of products- If Apple opts for improving the working conditions of the workers in the Chinese firms, then it would directly impact the cost of production of apple products. This means if high pay scale are offered to the Chinese manufacturing firms, then it would add to the cost of production of Apple products, in this way, Apple is facing tis issue related to human resource management.
3.Ethical dilemma- Apple is also facing the issue of ethical dilemma which means that if Apple opts for improving human resource management in the Chinese subcontracted firms, then the supplier’s relations may be affected and the fast delivery of the Chinese firms and quick acceptable of the Apple demand cannot be undertaken in future by the chinse firms. Thus, it is major challenge for Apple.
4.Less contribution to the US economy- By outsourcing most of the manufacturing of the Apple products, the company is making less contribution t0 the US economy Nd making more contribution to host countries or foreign countries. In this way, the US economy may suffer from less investment, low employment opportunities tec.
The desired outcome expected from Apple is that it should make an effective and efficient policy regarding human resource management in the chinse organizations so that employees get motivated and they give their fullest towards the organizational activities. As dissatisfied employee may hamper the productivity of the organization and thus it would directly impact the quality of the Apple products. Apple should go for improving the working conditions of the employees at chinses firms because the high cost of the production can be passed on the customers as well.
There are few recommendations that must be followed by the organization in order to overcome the issues identified. These recommendations-
1.Development of effective supplier responsibilit6b progress reports- developing these reports on annual or quarterly basis would be helpful for the organization to track on their suppliers’ activities and the human resource management practices undertaken by these organizations. In this way Apple can improve the working conditions of the employees of the Chinese firms.
2.Undertaking cost and benefit analysis of good human resource practices and suppliers’ relations for coming out of the ethical dilemma.
3.Opting for passing on the higher cost to the customers because being loyal customers of Apple they can afford high prices of Apple products.
4.Investing more in the home country by slowly taking out the investment from host countries.
So, in the nutshell, it can be concluded that Apple is facing certain issues in relation to the poor human resource management practices adopted by the Chinese subcontracted firms. Eh report provides the recommendations to solve these issues and future course of action that must be undertaken by Apple to retain its position as a market leader in the technology industry.