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MT4200 Business Ethics

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Case study

The concept of evangelism is an important component of Apple’s culture. Corporate evangelists refer to people who extensively promote a corporation’s products. Apple even had a chief evangelist whose job was to spread the message about Apple and gain support for its products. However, as the name evangelism implies, the role of evangelist takes on greater meaning. Evangelists believe strongly in the company and will spread that belief to others, who in turn convince other people. Therefore, evangelists are not only employ- ees but loyal customers as well. In this way, Apple was able to form what it refers to as a “Mac cult”—customers who are loyal to Apple’s Mac computers and who spread a positive message about Macs to their friends and families.

Successful evangelism only occurs with dedicated, enthusiastic employees who are willing to spread the word about Apple. When Jobs returned to Apple, he instituted two cultural changes: he encouraged debate on ideas and he created a vision employees could believe in. By implementing these two changes, employees felt their input was important and they were a part of something bigger than themselves. Such feelings created a sense of loyalty among those working at Apple.

Apple prides itself on its unique corporate culture. On its job site for corporate employ- ees, Apple markets itself as a “demanding” but rewarding workplace where employees work among “the best of the best.” Original thinking, innovation, inventing—all are common daily activities for Apple employees. By offering both challenges and benefits to applicants, Apple hopes to attract those who fit best with its corporate culture.

Apple also looks for retail employees who fit well in its culture. It wants to ensure that its retail employees make each customer feel welcome. Inside Apple retailers are stations where customers can test and experiment with the latest Apple products. Employees are trained to speak with customers within two minutes of entering the store. To ensure its retail employees feel motivated, Apple provides extensive training, greater compensation than employees might receive at similar stores, and opportunities to move up to higher level positions, such as manager, genius (an employee trained to answer the more difficult cus- tomer questions), or creative (an employee who trains customers one-on-one or through workshops). Apple also offers young people the chance to intern with the firm, become student representatives at their schools, or work remotely during college as home advisors.

Another benefit Apple offers combines employee concerns with concerns of the envi- ronment. In an effort to reduce its overall environmental impact, Apple offers incentives such as transit subsidies for employees who opt to use public transportation. Additionally, as part of its long-term commitment to sustainability, Apple is spending $850 million for 25 years of solar power. Its Cupertino facility runs on 100 percent renewable energy and is equipped with shuttles for employees. Apple’s free buses are powered by biodiesel. Apple also opened a new headquarters facility, named Apple Campus 2. With a budget of $5 billion, the new facilities include a fitness center, underground auditorium, and 300 electric vehicle charging stations. The new buildings are Leadership in Energy and Environmental Design (LEED) certified and incorporate solar technology. The campus is also conveniently located so that many employees can walk, ride, or carpool to work. These incentives reduce fuel costs for employees while simultaneously lowering emissions released into the environment.

APPLE’S Ethics

Apple has tried to ensure its employees and those with whom they work display appropri- ate conduct in all situations. It bases its success on “creating innovative, high-quality prod- ucts and services and on demonstrating integrity in every business interaction.” According to Apple, four main principles contribute to integrity: honesty, respect, confidentiality, and compliance. To thoroughly detail these principles, Apple drafted a code of business conduct that applies to all its operations, including those overseas. It also provides specific policies regarding corporate governance, director conflict of interest, and guidelines on reporting questionable conduct on its website. Apple provides employees with a Business Conduct Helpline they can use to report misconduct to Apple’s Audit and Finance Committee.

Many of Apple’s product components are manufactured in countries with low labor costs. The potential for misconduct is high because of differing labor standards and less direct oversight. As a result, Apple makes each of its suppliers sign a “Supplier Code of Conduct” and performs factory audits to ensure compliance. Apple may refuse to do addi- tional business with suppliers who refuse to comply with its standards. To emphasize its commitment toward responsible supplier conduct, Apple releases an annual Apple Sup- plier Responsibility Report that explains its supplier expectations as well as audit conclu- sions and corrective actions the company takes against factories where violations occur.

Ethical Issues At Apple Inc.

Although Apple has consistently won first place as the World’s Most Admired Company, it has experienced several ethical issues in recent years. These issues could have a profound effect on the company’s future success. Apple’s sterling reputation could easily be damaged by serious misconduct or a failure to address risks appropriately.

Questions:

1. Explain how Apple’s philosophy and organizational culture have impacted how it han- dles ethical decisions.

2. Why is Apple’s industry so competitive and how could this affect the ethical risks in Apple’s operations?

3. How do you think Apple has handled the various ethical issues that it has faced in the past?

MT4200 Business Ethics

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