The world today is considered a global village due to the advancements in technology and international cooperation. Globalization has facilitated for modern trade where goods and services are traded across international borders. The interdependence of the world is because of the vast economies of developed and developing nations, various cultures and different populations and demographics. Countries around the world need to partner with other nations to cater for their deficiencies through imports and export their surplus commodities. However, the concept of globalization is a complex phenomenon since it is an unregulated global market economy as it involves various parties such as corporations, people and governments. The evolution of globalization started with companies outsourcing manufacturing to other countries to reduce production costs. A majority of American multinational corporations such as tech giants that dealt in electronics outsourced manufacturing to countries such as India and China (Steger, 2017). The next phase of globalization involved companies embracing the distinct cultures around the world and the integration of various talents that were offered by these cultures in their organizations. Multinational corporations understood that the future success of the business was having a diverse culture while recruiting for individuals to join their staff. Notably, the complex nature of the globalization is likely to be affected by conflicts and terms of diplomacy. Donald Trump, the current president of the United States (US) imposed industrial tariffs on imports from China which is the largest manufacturer for many US companies. The effects of such taxes often result in the partnering nations imposing their trade restrictions which causes conflicts and changes in prices of commodities. This paper seeks to evaluate how Apple, Inc. addressed the competitive challenge posed by the globalization phenomenon.
Description of the Organization and its Primary Stakeholders
Apple, Inc. is a multinational tech corporation that has its headquarters in Cupertino in the state of California. The corporation deals in the designing, manufacturing and marketing of mobile phones, private computers, media accessories, software and digital music. The tech company was started in 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak, and was called Apple Computer, Inc. (Linzmayer, 2015). Apple is considered one of the top four major technology corporations in the world with Google, Amazon and Facebook. The corporate operates in various geographical segments across the globe which include North and South America, Asia, Europe, Africa and Australia. Steve Jobs who one of the founders of the company served a crucial part in shaping the direction of the corporation. Significant technological breakthroughs for Apple, Inc. include the introduction of the iMac personal computers, iTunes program for playing music, iPhone smartphones, iPads and iCloud which is a cloud computing service for storage of data (Linzmayer, 2015). The introduction of Siri which is a personal virtual assistant in smartphones, the launch of Apple Watch and the purchase of Beats headphones are recent achievements that Apple, Inc. added to their list of technological innovations which made the company soar to greater heights. Apple, Inc. is registered with the US money market regulatory authorities as a public joint stock company. The top shareholder of the company is The Vanguard Group, Inc. with a 7.18% stake with Arthur D. Levinson as the chairman of the board of directors (Linzmayer, 2015). The top executive management is comprised of Tim Cook, Luca Maestri, Jeff Williams and Jony Ive who make the vital decisions about the company.
Vision and Mission Statement
Apple's vision statement is dated back to 2009 and was set by Tim Cook. The Apple vision states that the corporation is focused on making quality products and would ensure consistency of towards this goal. The vision statement forms the basis of the core values of the company that provides continuity of the company's culture in the long run. The mission statement of the company states that Apple, Inc. is focused on ensuring their customers get the best experience by using their improved and superior products and services. The mission statement is fundamental to assuring the clients of the company that their experience comes first. The goal of putting the customer first forms the basis of the operations of the company which ensures the design of great products by the engineers at Apple, Inc.
Code of Ethics
The internal code of ethics at Apple, Inc. varies from the levels of employment at the company. The differentiation of the ethical standards in the company is as a result of the various requirements for specific job positions. However, as much as the code of ethics varies on a vertical direction, it focuses on similar aspects such as confidentiality, conflicts of interest, proper use of company assets that are protected by patents, reporting of unethical behaviour and fair dealing (Myers & Fellow, 2015). The tech company is always updating its code of conduct and policies to meet the various work demands. Apple has a code of conduct for their suppliers that aims to hold its business partners who supply products and other services accountable for their business practices. The comprehensive supplier code of conduct covers several aspects such as safety and health, human rights in relation to labour, management systems and impact on the environment. The suppliers are expected to comply with the code of ethics set by Apple, Inc. failure to which would lead to termination of contracts. The law of conduct with suppliers was created with utmost importance due to pressure from regulatory authorities in regards to unethical practices carried out by the partners of the tech corporation.
Apple is the most significant information technology in the world based on revenue. In the fiscal year, 2018 sales for Apple products and services around the world totalled to $265 billion. The company ranks at number one in the world for the largest mobile phone manufacturer just after Huawei and Samsung. Among its many other significant achievements include the brand with most value in the world and became the first public company in the US to be valued for more than $1 trillion. The tech company maximized their profits and as a result, had to expand their operations in other countries. Apart from facing competition from other mobile manufacturing companies such as Huawei and Samsung, the company also met rivalry from Google, Facebook and Amazon (Linzmayer, 2015). Spotify which is also a music streaming program was proved to be a challenge for iTunes. However, Apple through the leadership of executives such as Steve Job and Tim Cook developed strategies that gave the company a competitive advantage. The effects of globalization date back to the early 20th century when the US promoted and advocated for trade relations with other countries after the Second World War. Multinational corporations utilized this opportunity to expand their operations around the world.
The global supply chains are run by multinational corporations such as Amazon, Hewlett-Packard, Walmart and Apple, Inc. among others. Intermediate goods are an essential aspect of international trade as they are used in the assembly process in the manufacturing of final products. The most significant sources of US imports are from China, Mexico, Canada, Japan and Germany. The market for US exports is growing in China which is the country's largest trading partner in the world. Outsourcing to China for the manufacturing of consumer electronics provides opportunities for large multinational corporations to increase their profits while offering affordable products to their customers (Lockamy III, 2017). Tech companies in the US participate in the design of products, but the items are manufactured by Asian firms and assembled in China. The primary effect of globalization is competition as the costs and prices of products and services are comparatively low. The multinational corporations due to the distinct nature of their target markets have to respond to the preferences and tastes of their customers quickly. The more a company is adapted to quick production of goods and services with low costs and prices the more it has a chance of gaining a significant market share. Mobile phone customers in the world prefer quality phones at an affordable price. A company has to have the ability to respond effectively to current market trends if it is to maintain its market share and keep making profits. Therefore, it was important for Apple to add value to its chain of operations by outsourcing some of their core business functions to other countries.
The executives at Apple were faced with the challenge of ensuring that the company would survive the competitive nature of the tech industry and stay ahead. The company had to make sure that the supply chain would add value to their production process. Apple currently has 132,000 full-time employees, and none of these employees deals in the manufacturing process of the business (Clarke & Boersma, 2017). Most of the electronic components were manufactured by Asian companies, and it made economic sense to have Apple products manufactured and assembled in China. The cost of labour in China was also relatively cheap compared to the wages paid to workers in US factories. There was a need for a reduction in operational expenses and an increase in revenues by the company. Apple outsourced its manufacturing process in China where some companies deal with the production of batteries, screens, microchips and other electronic gadgets to cut their costs. However, the manufacturing plants in China and other Asian countries that were Apple contractors were involved in unethical business conduct in their production process. The Chinese companies such as Foxconn and Inventec were engaged in the exploitation of workers, low wages and child labour practices in their plants. Foxconn has more than 500,000 employees who were reported to have poor living conditions as they worked and lived in the factories. The factory workers clocked in more than 65 hours each week and were paid as little as $100 each month. Foxconn is the largest manufacturer of printed circuit boards in the world, and as a result, the tech company is involved with many American consumer electronics companies (Clarke & Boersma, 2017). The poor working conditions at the Chinese factory led to more than ten workers to commit suicide which prompted the world to pressure Apple, Inc. to take action. Foxconn and other suppliers of Apple, Inc. are still engaged in unethical practices such as child labour in their manufacturing plants. The company is yet to deal with the condition of the workers of their contractors despite creating a supplier code of ethics.
The company also employed a one for all type of approach for their products and services which makes an iPhone in Japan have similar specs as another in Canada. However, the company aimed to make sure that the services offered in their Apple shops in different countries are custom to suit the diverse cultures around the world. The company to stay ahead of their competitors developed other anticompetitive practices that constitute unethical business practices. Apple was involved in charging higher prices for their products and services in Australia compared to other geographical segments. The company has also been involved in many litigations with other companies due to wrong use of intellectual property rights which is not considered fair dealing. Notably, the company is known to invest in recruiting talents from government agencies suc...
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