Apple's Triple Bottom Line Ethical Sourcing Revolution - Essay Sample

Introduction

Alignment of Ethical Sourcing to the Organization Strategy: Apple Inc. has included Triple Bottom Line thinking in its quest for ethical sourcing that involves the creation of an elaborate corporate social responsibility program which features philanthropy, environmental protection, ethical labor practices (Duhigg, 2012). The Triple Bottom Line approach has been vital in promoting sustainable supplier selection and development of a code of conduct since 2006 which has revolutionized Apple's ethical reputation. Both Apple and its suppliers have significantly benefited from the Triple Bottom Line approach to the organization sourcing which puts consideration of the environment, social aspects and the welfare of the employees.

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Challenges in the Enforcement of Code of Conduct: Apple Inc. has been a very successful company due to its tendency to create premium new products and premium business positioning. However, most of Apple Inc. products are produced by third parties in countries where the production cost is low intending to reduce the overall cost of production. In this case, although Apple Inc. has a code of conduct and labor practices, they can only be implemented on its domestic operations, and for the external suppliers, it becomes difficult to follow up their level of implementation (Bilton, 2014). In 2014, reports emerged that Apple Inc. has failed to protect its Chinese factory workers from exploitation by the suppliers. This is one instance that depicts how Apple's supply chain ethical sourcing is broken due to the supplier failure to conform to Apple's code of conduct which was ideally aimed to protect such employees from exploitation (Apple Inc. 2017). In the expose, the undercover reporter noted that employees were working as long as 16 hours without rest in the Pegatron factory in Shanghai, China (Bilton, 2014). In the recent criticism, Apple Inc. CEO has opposed the claim that employees are being treated unfairly and claimed that the BBC news is biased and misinformed because employees sleep between shifts (Clinch, 2014).

Apple Inc. Code of Conduct Impact on Ethical Sourcing: Despite having a code of conduct for the suppliers the implementation and the evaluation of the suppliers to ensure their conformity has not materialized in Apple Inc. which explains why the organization has been fell by the scandal of using conflict minerals (Clarke & Boersma, 2017). The supplier's lack of conformity to the code of conduct established by Apple Inc. which seeks to promote sustainability and humane practices shows a perennial ethical sourcing challenge that will continue to affect Apple Inc. At the supplier level, it is difficult for Apple to be able to enforce the ethical sourcing principles such as the code of conduct due to the autonomy of the suppliers in terms of management and development of ethical concerns and as a result between 2017 and 2018 ten suppliers were dropped due to non-compliance (Churchill, 2018). Most of the ethical practices and code of conduct policies only cover the organization operations such as the decision of the type of minerals and the wages and benefits of the organization which are far much better compared to their supplier's ethical code of conduct (Apple Inc. 2016).

Ethical Sourcing Practices in Apple Inc.

Universal Morality with the Code of Conduct: Apple has a code of conduct in place that is used to promote ethical sourcing within the organization and also amongst the suppliers. In most cases, when the suppliers jeopardize the code of conduct, it results in the termination of the partnerships (Duhigg, 2012). One of the critical target elements that Apple Inc. code of conduct seek to achieve is ensuring that its suppliers can treat their employees with dignity by providing fair working schedules and safe working environments that are free from gender or racial based discrimination (Boersma & Clarke, 2018). This aspect is achieved by ensuring that employees are educated on their rights and ensuring that organizations have anonymous channels through which employees can channel their complaints.

Since the introduction of the code of conduct, more than 17.3 million people have been educated regarding their rights. Safety protocols are established and followed with the organization establishing rigorous assessments which have been vital towards achieving partial compliance by suppliers such as Foxconn (Apple Inc. 2019). Apple Inc. does not tolerate any form of forced labor with the suppliers caught in such cases being expelled. In 2008, forced labor was made as a core violation of the supplier code of conduct which aimed at improving compliance and protection of the employee rights (Apple Inc. 2010). The organization conducts random investigatory interviews which seek to ensure that they work on their own will. To attest the organization ethical sourcing principles and practices Apple Inc. in 2018 was recognized and awarded with the Stop Slavery Award by the Thomson Reuters Foundation which is an organization aimed at promoting the eradication of forced labor (Apple Inc. 2019).

Sustainability of Apple Inc. Supply Chain

Apple Inc. Environmental Responsibility in the Value Chain: One of the critical responsibilities towards improving ethical sourcing by Apple Inc. has been through the promotion of greener factories and communities by promoting more energy conservation, use of safe chemicals, and seeking to eliminate waste (Apple Inc. 2019). The best practices adopted by Apple Inc. seeks to go beyond the supplier factories through collective initiatives towards saving the planet. Although the program is in its early days, in 2018 Apple Inc. reported significant gains in which one of the suppliers was given a gold certification in water management by the Alliance of Water Stewardship. In 2018 alone, 7.6 billion gallons of water were conserved with 39% water reuse rate. In terms of the use of greener chemicals, since 2014 Apple Inc. has partnered with the suppliers to ensure proper chemical management programs as well as compliance with the code of conduct regarding the regulated substances specification. This has proved to be a great success with 100% adoption of safe and green cleaners and degreasers (Apple Inc. 2019).

Figure: Supplier Compliance to Apple's Code of Conduct (Apple Inc. 2019).

The inability to differentiate cobalt sources between the miners who comply and those that abuse human rights in the process has forced Apple Inc. to continue using minerals that could potentially taint its improving reputation (Apple Inc. 2018). Ethical sourcing in Apple Inc. is a significant challenge due to the lack of an implementation mechanism for the organization. Apple Inc. has not denied sourcing minerals to make its products in conflict areas such as DR. Congo where most of the proceeds from the sale of the minerals are used to fund criminal and terror activities. This aspect has significantly affected Apple Inc. public relations and exposed the organization hypocrisy as a socially responsible company (Bilton, 2014). However, Apple Inc. is not entirely to blame for the lapse in its supply chain which has resulted in the use of conflict minerals which leads to heightened violence in parts of Congo by facilitating militia financially to acquire weapons. In the previous reports, Apple Inc. commented on the difficulty of ensuring that all the minerals used as raw materials come from clean suppliers (Cuthbertson, 2018).

Reflections on Findings

Ethical sourcing involves responsible organization practices to the government, society, the environment, employees and the supplier's business practices. Ethical sourcing issues cover the entire business organization production, raw materials sourcing, environment and distribution to the final consumers (Zhou & Xu, 2018). Apple Inc. has achieved tremendous outcomes towards ensuring that the working conditions at the organization core operations and also the supplier operations. In 2018, through random verification of employee documents across the value chain Apple Inc. found out that there was 97% compliance of the working hours code of conduct, and the responsibility falls directly on the Chief Executive Officers of the suppliers to ensure compliance which has been vital in the high percentage success rate (Apple Inc. 2018). Even though Apple Inc. has been able to resolve most of its supplier abuse and poor working conditions especially for Foxconn which is the largest supplier, there are still challenges being witnessed in regulating the source of minerals mainly due to their scarcity and the natural relationships with middlemen. The shortage of minerals such as cobalt has prompted Apple Inc. to scramble for the scarce mineral which promotes human abuse especially in the impoverished African villages and Indonesia where most of the minerals are sourced. Ethical challenges in regulating the miners have been a significant challenge with most of the cobalt coming from the democratic republic of Congo which is known for child labor and the proceeds being used to fuel conflicts. Therefore, there is a need for sustained creation of new solutions for the current supplier challenges regarding minerals to ensure that Apple Inc. does not use conflict based minerals from Congo and also mines where child labor is used in small scale which is difficult to identify and contain (Apple Inc. 2018). To promote ethical sourcing, Apple Inc. has a supplier responsibility plan in which those that build Apple Inc. products are eligible for new skills and career advancement. The program that began in 2008 has benefited 3.6 million supplier employees by 2018 which include on the job training (Apple Inc. 2019). The research has established that Apple Inc. has significantly invested towards ethical sourcing which seeks to ensure that its products are produced responsibly and sustainably while at the same time ensuring humane treatment of the employees.

Implications

Apple Inc. has developed systems that seek to promote ethical sourcing through which the suppliers should be able to practice employee friendly policies, environmental protection and social responsible behavior. The social and environmental implications of Apple Inc. products are taken into consideration before the organization embarks in the production process and manages them through supplier partnerships. The firm has come under criticism at a different point in time due to its relaxed ethical sourcing policies that despite their existence they are barely implemented in its supply chain. Apple has continued to maintain that the organization is doing as much as possible to improve ethical sourcing amongst the suppliers. In another instance, in Apple's supply chain in Bangka which is an Indonesian Island Apple was exposed again in underage labor where children were found working in mines oblivious of potential landslides. Because most of the minerals used by Apple in its production chain comes from small skilled mines it is difficult for the organization to follow up and also it is easy for the company to absolve itself of the blame. It is important for Apple Inc. to continue ethical sourcing efforts until all the suppliers have complied which will be key in improving the organization public relations and future sales sustainability.

References

Apple Inc. (2010). Supplier Responsibility. 2010 Progress Report. Retrieved from https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2010_Progress_Report.pdf

Apple Inc. (2016). Supplier Responsibility. 2016 Progress Report. Retrieved from https://www.apple.com/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf

Apple Inc. (2017). Supplier Responsi...