Business Ethics: Apple case - Essay Example

Business Ethics: Apple Case Business Ethics: Apple Case Explain how Apple’s philosophy and organizational culture have impacted how it handles ethical decisions. Apple Inc. has remained in the limelight in the technological industry since Steve Jobs took over the company as its CEO in 1997. After Jobs was in control, Apple Inc. went through extensive changes in its corporate culture. A company’s organizational philosophy and culture can be defined as the sum of morals and behavioral patterns that contribute to the exclusive social and psychological environment of a particular organization. A more detailed version concludes that organizational culture has six basic elements. One, it is a model of fundamental assumptions. Two, it is developed by a particular group or organization and is characteristic of only that group or organization. Three, it is developed over time as the group/organization goes through ups and downs by coping with internal and external issues. Four, it renders itself valid over time if it works well enough for the group/organization. Five, new members are to adapt to the corporate culture and integrate it into their actions. Six, this is the way in which the entire organization is to respond to any problematic situations. (Schein, 1990) Apple has taken strong measures for and secured an unshakably loyal customer base that appreciates Apple Inc. for its innovation and quality. So when quality issues popped up with the launch of iPhone4, it was an issue of big concern for Apple. And what was more important was how it would tackle it. The main concern was resolving the issue while maintaining customer loyalty. Apple issued free bumpers and cases that resolved the reception issues in iPhone4, hence solving the problem and retaining loyalty. Then there was the issue with privacy, where the people and the government had privacy infringement concerns when Apple and Google announced that their phones collect and store information about the users’ location. Apple although defensive of its data collection policy, announced that the users had the option to turn off the data collection software on their phones. In this way, it made its customers feel that they were at liberty to choose their options with Apple Inc. products. Another major issue has been that regarding sustainability, where people have objected the quick and constant new launches by Apple when on the side it advocates sustainable environment. With every new apple launch, the old product becomes obsolete and people throw it out producing technological waste. Apple has introduced a system of discount of sorts where you can trade old products for new ones at a discount, thereby countering this issue. Intellectual property theft and patents are also a huge concern for Apple, for example when it filed a lawsuit against Microsoft and Franklin Computer Corporation and also when Cisco Systems filed against Apple Inc. Kodak also accused Apple of a patent infringement. Because of the fragility of legal situations with regard to how they can besmirch a company’s image, Apple has taken considerable measures to resolve all these situations as cleanly as possible. 2. Why is Apple’s industry so competitive and how could this affect the ethical risk in Apple’s operations? Apple Inc. is a part of the Information Technology Industry where things are constantly in a process of innovation and change. Every time a new product or technology is launched it makes the older version obsolete. However, constant innovation is an essential requirement in this industry and cannot be avoided whatever the cost. With an industry of this nature that requires constant technological innovation to thrive, it becomes a necessity to protect innovational information, with competitor companies on the look out to absorb any informational leaks. With operating in an industry of this nature, there is a high ethical risk in the form of information theft and infringement of patents. And especially with a company as successful and innovative as Apple inc., competitors are always on their feet to grab any information about Apple Inc. that might come their way that hasn’t been officially released because that will help give them a heads up on what Apple is planning to launch next into the market. Apple has faced numerous issues regarding these concerns over the years. It has filed lawsuits against companies and some very prominent companies have filed lawsuits against Apple, and Apple has not always come out clean though it has in most cases been able to minimize the damage caused. Apple has to be careful in two aspects; it has to be careful about its actions as well as the actions and potential actions of its competitors. First, it has to be vigilant of its own actions, this means that it should avoid doing anything that goes against its company culture and philosophy and the general rules of the industry. There are some basic rules that will warrant legal action when infringed. These most commonly include infringement on new and exclusive technology. In addition to innovation, what is more important in this industry is the need for originality and talent. If a company is not original with its technological releases, it will find that it will start lagging behind competitors. Being part of such a high pressure industry, this warrants illegal actions on the part of some companies that steal information and technology from competitors who are doing better than them. Thus, second, it should be vary of its competitors’ actions and motives. Because often competitors will steal technological information, without remorse or ethical concerns just to propel themselves forward without caring about its implications for the industry or the company they stole from. Corporate espionage is very dangerous business and is employed quite frequently in the Information and Technology industry where the value of information is extremely high. Often, this results in legal action in the form of lawsuits against the company that has wronged another. The nature of the industry has therefore, increased exponentially the ethical risk that Apple Inc. faces as an organization because of the inherent volatility in the environment. 3. How do you think Apple has handled the various ethical issues that it has faced in the past? According to a study, ethical concerns are important because ethical failures diminish reputation, articulating ethical standard makes responding to criticism easier and implementing ethics is a mark of professionalism. (Trevino & Weaver, 1997) Apple has faced and handled various ethical issues in the past, some of which it has handled quite effectively. The first structural change in Apple that helped combat ethical infringement on Apple was when Steve Jobs introduced a closed-door information policy. This made information leaks less likely and thus reduced the chance of rival companies being able to steal new technology or information from apple. Other structural changes that Apple has incorporated includes a change in the organizational hierarchy structure, this removes the internal ethical concerns raised by employees that they are being treated unfairly or that bureaucracy makes sure that they are never heard or catered to. Other ethical issues that Apple faced were resolved by or are in the process of resolution by legal action. Lawsuits are filed when infringements occur and these can often get messy and very costly. However, sometimes legal action is necessary and Apple has often taken this step when it was needed. Therefore in sum, Apple has never left ethical problems unresolved and has taken due steps to correct and restore the balance of the situation whenever there has been an ethical infringement. Works Cited al-Alawi, A. I., Al-Marzooqi, N. Y., & Mohammed, Y. F. (2007). Organisational culture and knowledge sharing: critical success factors. Journal of Knowlege Management , 11 (2). Iivari, N. (2005). The Role of Organisational Culture in Organisational change. ECIS 2005 Proceedings . Insight, A. (2009, April 20). Researching in Organisations-Philosophical Requirements. Retrieved May 1, 2012, from acmeninsights: https://www.acumenmobile.com/papers/Researching%20in%20Organisations%20-%20Philosophical%20Requirements.pdf Schein, E. (1990). Organisational Culture. American Psychologist . Seevers, B. S. (2000). Identifying and Clarifying Organisational Values. Journal of Agricultural Education , 41 (3). Trevino, L. K., & Weaver, G. R. (1997). Ethical Issues in Competitive Intelligence Practice: Consensus, Conflicts and Challenges. Competitive Intelligence Review , 8 (1). Read More