Case Study: the Apple Ipod in China

Topics: Foxconn, IPod, Apple Inc. Pages: 17 (5834 words) Published: March 27, 2011
Corporate Social Responsibility and Environmental Management Corp. Soc. Responsib. Environ. Mgmt. 14, 103–113 (2007) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/csr.146

Case Study: the Apple iPod in China
Stephen Frost1* and Margaret Burnett2* 1 Department of Asian and International Studies, City University of Hong Kong, China 2 Corporate Environmental Governance Programme, University of Hong Kong, China

Keywords: Apple; iPod; Foxconn; China; sweatshop; Hon Hai; supply chain; electronics

Introduction to the Case

A

ll material in this case is based on publicly available information. The case is intended to be used for both research and teaching purposes. The authors make no judgment whatsoever about the conduct of any of the parties involved in this case study.

Background
As with many other manufactured items these days, the bulk of electronic products sold on the global market are made or assembled in China. Although this has made good business sense, the outsourcing of production to the developing world (and particularly to China) has resulted in criticism from civil society organizations about workplace standards. Since the early 1990s, a range of people (including labour rights activists, trade unionists, students, journalists, academics and other concerned citizens) have targeted companies in the apparel, sports shoe and toy industry over the low wages, long hours and poor workplace safety in the factories from which they source (but do not usually own). Among the most well known recipients of such criticism have been Gap, Nike and Mattel, all of whom – along with many others – have attempted to use their buying power in the supply chain to encourage factories to improve. Until the 2000s the anti-sweatshop movement – as it has been generally called – focused almost exclusively on the three sectors mentioned. Several large retailers such as Tesco and Wal-Mart have found themselves under fire over the same issues, but in general the fight for better conditions in countries such as China has been confined to shoes, toys and garments. From 2003 to 2004, several non-governmental organizations (NGOs) concerned about labour rights started to turn their attention to the electronics sector. In early 2004, the Catholic Agency for Overseas Development (CAFOD, 2004a) released Clean up your Computer, a report that aimed to shine a light on poor workplace practices in the computer manufacturing industry. CAFOD updated the report later in 2004 (CAFOD, 2004b), and revisited the issues in 2005 (CAFOD, 2005) and 2006 (CAFOD, 2006). In the meantime, other groups also started paying more attention to the electronics sector, where it was * Correspondence to: Stephen Frost, Department of Asian and International Studies, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong, and Margaret Burnett, Corporate Environmental Governance Programme, Centre of Urban Planning and Environmental Management, University of Hong Kong, Knowles Building, Pokfulam Road, Hong Kong, China. E-mail: s.frost@cityu.edu.hk, maggieb@hkucc.hku.hk Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment

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alleged that working hours, pay and other workplace issues were exacerbated by a greater array of more hazardous chemicals. Surprisingly, it took until 2006 for the first major sweatshop story about the electronics industry to appear. In mid-2006, Britain’s Mail on Sunday broke a story alleging Apple’s iconic iPod was made in Chinese factories where workers earned per month around one-quarter the UK retail price (Joseph, 2006). The paper claimed that workers who assemble iPods work 15 hours a day for US$50 per month. The report also stated that employees work and sleep at the plant, sleeping in dormitories with more than 100 people, outside visitors are not allowed, employees have little choice about overtime and they stand at their posts for long hours without being...

References: Apple. 2006a. Form 10-K: for the Fiscal Year Ended September 30, 2006. 29 December. Apple. 2006b. Report on iPod Manufacturing. 17 August. Apple. 2007. Apple Reports First Quarter Results. 17 January. AppleInsider. 2006a. iPod City: inside Apple’s iPod factories. AppleInsider 12 June. AppleInsider. 2006b. Photos: inside Foxconn’s ‘iPod City’. AppleInsider, 14 June. Baldwin H. 2006. How Foxconn surpassed Flextronics. Reed Electronics 22 June. BBC. 2006a. iPod ‘Slave’ Claims Investigated. 14 June. BBC. 2006b. Apple Admits Excessive iPod Hours. 18 August. BBC. 2006c. China iPod Labour Lawsuit Dropped. 4 September. CAFOD. 2004a. Clean up your Computer: Working Conditions in the Electronics Industry. CAFOD: London. CAFOD. 2004b. Ethical Trade and the Electronics Industry. CAFOD: London. CAFOD. 2005. Clean up your Computer Progress Report. CAFOD: London. CAFOD. 2006. Computer Conditions Update 2006. CAFOD: London. EMSNow. 2007. Hon Hai Group Aims for $61B Revenue in 2007. 16 February. Foxconn. 2007. About Foxconn. http://www.foxconn.com/WorldLayout.html [22 February 2007]. International Herald Tribune (IHT). 2006. Apple cites China firm for violating standards. 18 June. Joseph C. 2006. iPod City. Mail on Sunday 11 June. Kahney L. 2006. Judging Apple sweatshop charge. Wired 12 June. Klowden T. 2006. iPod City: Apple criticized for factory conditions. ArsTechnica 12 June.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment
Corp. Soc. Responsib. Environ. Mgmt. 14, 103–113 (2007) DOI: 10.1002/csr
Case Study: the Apple iPod in China
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Kurtenbach E. 2006a. Apple eyes labour conditions at iPod plant. Washington Post 16 June. Kurtenbach E. 2006b. Apple tries to resolve dispute over labour at China iPod plant. AAP 30 August. MacNN. 2006. Apple begins Foxconn iPod audit. MacNN 20 June. McLaughlin KE. 2006. iPod’s children: China’s young make them, America’s youth buy them – Apple probes work conditions. San Francisco Chronicle 16 July. Musgrove M. 2006. Sweatshop conditions at iPod factory reported. Washington Post 16 June. Reuters. 2006. Apple Says Started Audit on iPod Factory Claims. 19 June. R-Squared. 2006. Should journalist use lies to fight lies? The Apple ‘slave’ labour case. Development Bank Research Bulletin 16 June. Soong R. 2006a. FoxConn sues newspaper. ESWN 26 August. Soong R. 2006b. My life as an activist journalist. ESWN 31 August. Stoid. 2006. Comment. MacRumours:Forum 21 June. Wang Y. 2006. Yuangong jie fushikang xiehan gongchang heimu: jiqifa ni zhan 12 xiaoshi [Workers reveal Foxconn sweatshops: standing at machines for 12 hours]. Diyi Caijing Ribao [China Business News] 15 June. Webster N. 2006. Welcome to iPod city: the robot workers on 15-hour days. The Daily Mirror 14 June. Wu P. 2006. Hyperbolic Apple iPod factory woes. China Tech News 16 June. Zhuang J, Li Q. 2006. Fushikang yuangong: zuidi yiyue zheng 340 yuan 700 duo ren zhu yige wu [Foxconn workers: as little as 340 yuan a month and 700 people in a room]. Wangyang Keji Baodao [NetEase Technology Report] 19 June.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment
Corp. Soc. Responsib. Environ. Mgmt. 14, 103–113 (2007) DOI: 10.1002/csr
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