Apple & Google: Big 4 US Companies Manufacturing Overseas - Research Paper

Introduction

Apple is a multinational technology company in America. The company design, develop and sell computer software, electronics, as well as online services, while Google started an online search firm and currently offering numerous internet services and products Apple and Google are among the big four companies in the United States. Both Apple and Google have been manufacturing their products oversea, basically because there is cheap labor oversea. For instance, a report by New York Times revealed that the two companies manufacture oversea because workers are cheaper in the foreign countries, and the Company's executive also believes in the vast scale of the oversea factories, and diligence, flexibility and the incredible skills of workers have surpassed that of the United States. In a conference meeting, Tim Cook, who is the CEO of Apple, suggested that the Company should make additional components in the US (Lee & Jung, 2015). The paper seeks to determine why Apple and Google Companies opted for oversea manufacture, the challenges they encounter, stakeholders affected by the options, as well as ethical issues arising depending on their decisions.

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Apple's Announcement

Apple company made an announcement to set a new investment in American purposefully in support of the American economy, as well as enhancing workforce through focusing on three areas where the Company has great impact on job creation: direct employment by the Company, investing and spending with the Company's domestic manufactures and the suppliers, with no exceptions of accelerating the rapid growing economy as a result of fantastic products especially App Store and iPhone (Bergvall-Kareborn, & Howcroft, 2013). For instance, the Company was expected to create more than 2 million jobs across the US, as well as generating additional employment opportunities as a consequence of the announcement. More significantly, the integration of the new investment and the Company's speed of spending with the local manufacturers and suppliers with an estimate of $55billion in 2018, would lead to direct contribution to the economy with an estimate of $350 billion for five years excluding the local tax and the revenue tax from workers (Lee, & Jung, 2015).

The planned capital spending in the United States, investments in the manufacturing for five years and tax on repatriation of the foreign profit would be estimated at around $75 billion of the direct contribution. Evidentially, the Company's CEO said that Apple was a successful company that was purposed to be in America, and they were building on the support for the US economy. He said that the Company had a sense of responsibility in paying back to America and for the people who had supported their success (Blau, 2015). With such a move, Apple became the largest taxpayer in the United States with the anticipation of the repatriation tax of about $38 billion as it was stipulated in the new tax law (Lee, & Jung, 2015). Such a tremendous contribution formed the reason for the announcement by the Apple Company to manufacture some of its products in America.

Qualitative Factors

Apple and Google decided on the American manufacturers after considering a range of qualitative factors which would lead to the benefit of both companies and the economy of America (Lee, & Jung, 2015). The factors included the quality of infrastructure. The decent infrastructure such as good road network and electricity would enhance the organizational operations. The two companies also considered government and political factors. The main purpose of the companies was to generate more revenue to their county (Bergvall-Kareborn, & Howcroft, 2013). The revenue from tax contributed would increase national revenue, thereby triggering economic development. Again political favor, for example, President Donald Trump supported the idea of American manufacturers since that would create more job opportunities to the people and facilitate economic growth. Therefore the president provided favorable political factors for Apple and Google Companies.

More importantly, the two companies considered serving the interest of the local people through the provision of millions of jobs, which would improve their lives and greatly reduces unemployment (Blau, 2015). Furthermore, Apple and Google considered advanced telecommunication system in the US, and that would also promote their operation. Favorable industrial relation laws in the United States also triggered the move by the two companies to opt for American manufacturers. American labor also has specific skills that would enable them to work well in specific departments and contribute much to the Company (Blau, 2015). Company reputation is also another factor which encouraged the two companies. The move would lead to an excellent reputation of the two companies of their performance and contribution to America.

Reasons for Producing Some Products in the US

The two companies decided to produce only some products in America because the foreign countries can support a higher demand for the products. For instance, the New York Times' report captured the interview with the executive from Apple. The main reason was that the iPhone could be manufactured in China due to the availability of adequate manpower that enables manufacturing. For instance, the factory in China which manufacture iPhones has an estimation of 230 000 employees, but the United States has had a population which is equivalent to the number of workers in the factory (Lee, & Jung, 2015). The statistic means that the population of America cannot give enough employees to work in such a company. Therefore this would be a big reason for only producing some products in America and not all the products.

Additionally, local assembling of products would greatly affect the consumers. For instance, several raw materials for manufacturing Apple products are manufactured in oversea countries. The shipment of such materials to the US-based factories would mean more cost on production and possible delay because the process would take much time (Bergvall-Kareborn, & Howcroft, 2013). All the challenges are bored by the consumers since the higher cost of production would translate to an increased cost of sale. More expenses are also on the workers' earnings, insurance, and high taxes, and because the motive of the Company is to generate more income, the added costs are transferred to the consumers (Lee, & Jung, 2015). This would mean that the production in America would for both Google and Apple products are more costly than oversea manufacturing. Therefore it's the best option for Google and Apple only to produce a small portion of their products in America.

Challenges Posed by US and Overseas Manufacturing

The American manufacturing industry has been greatly reshaped by the advancement of technology and most critically, the shifting of the economic climate. The industry has made it necessary for the manufacturers to innovate further to enhance their competitiveness (Rice, & Stefanelli, 2015). The problem that is posed by US manufacturing is that the manufacturing skills gap has been widening, which makes most manufacturers stay away from operating in the United States. Research conducted by Deloitte and the Manufacturing Institute has indicated that by the year 2025, there would be close to two million unfulfilled jobs against the estimated 600, 000 jobs (Trappey, Trappey, & Wang, 2016). Moreover, there have been less-skilled workers, and manufacturers have been facing the problem to plug the demand.

Concerning the challenges posed by overseas manufacturing, cultural differences have been a key hindrance in the operations of different manufacturers. Different countries have a unique history which creates the foundation for their beliefs, and this always poses challenges to the manufacturers in the overseas (Trappey et al., 2016). Furthermore, the failure to identify and embrace a manufacturing partner in overseas manufacturing has been a major problem. Understandably, efficient and effective operations of a manufacturer are often premised on forging a partnership with a manufacturer that understands the manufacturing landscape of that particular country (Rice, & Stefanelli, 2015). Also, the issue of quality control in overseas manufacturing has been a stumbling block for most manufacturers from the United States. In the absence of quality control assurance, outsourcing the manufacturing of a product is expensive.

Stakeholders Affected by Manufacturing Decisions

Stakeholders refer to people or groups that are involved in the daily operations of the business. The manufacturing decisions always have a bearing on the success of the individual manufacturers, and while making some of these major decisions, there are always key stakeholders that are significantly affected. Employees are always the hardest hit by the manufacturing decisions. For instance, the decision to manufacture in the United States will greatly benefit employees who are within the country (Rice, & Stefanelli, 2015). Before making decision reverting to manufacturing in the US, Apple employed many overseas workers to the detriment of local workers. Notably, owners have also been bearing the brunt on the made manufacturing decisions. The decision to manufacture in the United States will most likely spur the growth of the manufacturers because of the presence of more developed infrastructure.

Conversely, the decision to embrace overseas manufacturing will bring a great impact on the owners (Trappey et al., 2016). For instance, the failure to get the right manufacturing partner in the overseas will adversely affect the manufacturers and most critically the owners. Moreover, the customers will be impacted by the manufacturing decisions considering the fact they always play an integral role in the success of the manufacturers. Manufacturing decisions should always be made in strict adherence to the needs of the consumers (Trappey et al., 2016). There has been a growing demand for goods and services in the United States, and therefore, the decision to manufacture in the US will help to produce more goods to meet the demand (Rice, & Stefanelli, 2015). In the same vein, the decision to manufacture in the overseas will impact negatively on the local consumers. However, it should be noted that the digitalization of marketing platforms has created uniform consumerism and the decision to overseas manufacturing has been important in expanding the markets for the products manufactured by the US manufacturers.

Ethical Issues

Manufacturers are always obligated to maintain high ethical standards in their operations, and it is often essential on the part of producers to adhere strictly to the laws and regulations set by the country. Manufacturers need to observe different ethical issues, particularly when they are not producing in the lower-cost area (Rice, & Stefanelli, 2015). While they had an adequate supply of the important factors of production in the overseas, the manufacturers should not compromise the quality of goods in their pursuit of lower production. Moreover, the manufacturers should ensure that they strictly observe the US laws and regulations, particularly the ones that specify the rights of the workers. They need to ensure that they pay the right wages to the workers.

Notably, operating in the lower-cost area often provides the manufacturers with an opportunity to exploit the law gaps that exist in the overseas by failing to remit the taxes as required by the law. In light of this, the manufacturers should observe ethical standards by ensuring that they remit all the required taxes promptly (Trappey et al., 2016). Additionally, the manufacturers who operate in the overseas often disregard the environmental ha...