Identifying and Managing Business Risks - Assignment Example

? Business Risk Management A heavily anticipated report on working conditions of Apple supplier documents dozens of outstanding labor rights violations. Some of these labor violations cover; excessive overtime, unpaid wages and salaries that are not enough to cover basic living expenses and also mistreatment of its workers (Froeb & McCann, 2009, p. 243). Wages and benefits: More than 60% of the workers in three of Apple supplier factories in China argue that their salaries fall short of their basic needs. These workers argue that the monthly salaries they are getting from their employer are too small (Sad grove, 2005, p. 132). The average of three hundred and fifty dollars they receive is as too low to cater for the needs and demand of their families. Working hours and salaries: Within the last ten months, all the three Apple factories operating in China exceeded both the Chinese legal limits on working hours and the fair labor association standards. The fair labor association allows a maximum of sixty working hours per week, including both standard shifts and paid overtime. According to its survey, the Apple branches in China broke this rule by subjecting its employees to more than maximum working time per week. Though the workers are forced to work over the limits allowed by both the government and the fair labor association, Apple own investigation has shown that most of its facilities located in foreign countries broke legal limits by failing to pay proper overtime wages as stipulated by the law(Sad grove, 2005, p. 338). The fair labor associations found that almost a quarter of Foxconn’s workers do not get the compensation they are owed for unscheduled overtime. Health and safety: Almost half of the employees surveyed, by the fair labor federation, said that they were either experiencing or witnessing some kind of work related accident. Before FLA investigations, Foxconn recorded only accidents that resulted to production stoppages (Pickett, 2006, p. 275). This has for a long time led to torture of many of its workers, who had no one to return to their rescue. Prevention of underage labor: In its 2006 audit, Apple Company placed some of its findings on its website. Its current reports, on breach of labor and human rights including the use of underage workers, indicated that in more than hundred of its facilities, excessive work hours were a common thing and that most of those facilities failed to pay proper overtime wages (Froeb & McCann, 2009, p. 204). It has also indicated that, in their effort to reduce production cost, these facilities employed under age workers who clearly accepted the low wages the facilities were willing to give. Fair treatment: Apple is one of several companies that outsource its manufacturing, but despite the fact that it is one of the most popular and profitable business, it has recently come under most powerful spotlight. Foxconn, One of the largest Apple suppliers has received a lot of harsh criticism from labor activist. In the year 2010, a spate of suicide at the company’s factories, including hazardous facilities, unauthorized overtime requirements and abuse of employees, garnered media coverage. The media carried an exhaustive presentation of how the facility subjected its workers to unfavorable working conditions (Sadgrove, 2005, p. 82). The New York Times also Documented the physical anguish of Foxconn plant explosion that led to death of individual workers. Discrimination: Recent FLA audit report has shown that Apple Company has been encouraging location of its facilities in many African countries, without inputting in appropriate measures to prevent environmental pollution. The report indicates that these facilities have been operating in many third world countries for a long time. They have been getting concerned with the profits of their exploitation under the expense of what impact they have been causing to the environment and the people in general (Froeb& McCann, 2009, p. 204). Risk strategy: Collaboration with the fair labor association; Apple Company has created a working link with the fair labor association, to carry out exploration in its various facilities all over the world. This has helped the company’s overall senior management to monitor and control its various facilities in all corners of the world. FLA carries surveys, investigations and also interviews selected customers in different facilities (Sadgrove, 2005, p. 98). This helps them come up with the ideal situations in these Apple facilities, thus helping Apple to take adequate measure to correct the problems identified. Reduced working hours: After it was reported that Foxconn plant in China has been subjecting its workers to excess work time, Apple Inc has come up with the measure to regulate the problem. The management put in measures by requesting its facilities to subject their workers to only 49 working hours in a week (Pickett, 2006, p. 83). This duration is within the acceptable working duration of 60 hours in a week, set up by the fair labor association. Increased wages and salaries: After indication that many of Apple facilities especially in China, has been giving low wages to its workers, the company has put in adequate measure to ensure that employees are paid better salaries than before. The senior managers of the company have in unison accepted to sign approval of salary increment of all its employees (Pickett, 2006, p. 275). This has led to rise of wages and salaries of all Apple workers across the globe. Education programs on environmental pollution: After the company was vindicated in a plot of supporting its facilities located in Africa, to operate under the expense of the surrounding environment, the company has put in comprehensive measure to protect and safeguard the environment. The company has hired trainers, whose core function is to teach the community on better ways and methods of environmental conservation (Jenkins & Sawyers, 2007, p. 421). This move has been welcomed by many governmental and non-governmental organizations, whose initially condemned impact of the company activities on the environment. Finally, in its attempt to minimize the audit risk identified above; Apple Company has reviewed the general employment procedures to be followed by all of its facilities. It has advised its facilities located abroad, to keenly evaluate job seekers qualifications and age requirement before qualifying them for a job within their facilities (Jenkins & Sawyers, 2007, p. 421). This has helped Reduce cases of child labor exploitation thus reducing the negative criticism the company has been getting from the media and other human rights groups. References Froeb, L. M., & McCann, B. T. (2009). Managerial Economics: A Problem Solving Approach. Cengage Learning. Jenkins, G., & Sawyers, R.S. (2007). Managerial Accounting: A Focus on Ethical Decision Making. Cengage Learning. Pickett, K. S. (2006). Enterprise Risk Management: A Manager's Journey. John Wiley & Sons. Sadgrove, K. (2005). The Complete Guide to Business Risk Management. Gower Publishing, Ltd Read More