Theoretically,profit maximization is the ultimate objective of starting a businessengagement to enhance the wealth of the investors. Investors areattracted to a firm which promises high earnings in the future due tothe business model and strategies it has adopted in its operations.Indeed, the economics ethical theory holds that an ethical company isthe one that is able to maximize the profitability of theshareholders and owners of a company. However, the ability of a firmto sustain its productivity and attractiveness in generating profitis determined by the relationship it has created with the localcommunity, employees, and the authority(Henn, 2009).Consequently, the multinational enterprises extending theiroperations in diverse foreign destinations are increasinglyconsidering adopting ethical standards in their operations eventhough their affect the profit of the firm. The balancing of theprofit maximization and the ethical consideration by themultinational companies is expected to enhance the sustainability ofthe firms in the societies they enter(Crane & Matten, 2010).Accordingly, an intensive analysis on the ethical decisions been madeby the multinational companies has been undertaken using thedecisions of Apple Corporation.
Despitethe economic benefits the company might generate by compromisingethical behaviors, it has been able to balance ethical behaviors withthe economic benefits. The code of ethics the company has developedin its operations integrates various stakeholders. One thestakeholders involved in the ethical code of operations at AppleCorporation is the suppliers of raw materials. The suppliers of theApple Corporation are required to sign the code of ethics, whichdemands for antidiscrimination of workers, fair treatment of workers,underage labor prohibition, protection of juvenile workers, fairbenefits and wages, freedom of association, chemical exposureprotection, and restriction and management of hazardous substance(Virginia, 2014).The strict ethical code of conduct the company has establishedagainst the suppliers demonstrates the serious it pays in ensuring anethical business environment. The stun requirements that suppliersmust meet has the potential of denying Apple the ability ofattracting the best suppliers due to the cost they have to meet inwinning the supply tender.
Nevertheless,the management of the company has undertaken the decision despite theeconomic loss it can suffer if suppliers shun supplying the rawmaterials. Similarly, the engineers of the company are anotheressential stakeholder involved in the ethic decisions of the company(DFEI, 2011).The developers of the Apple communication devices are expected to bestrict in ensuring the products are environmentally friendly, safefor human use, and capable of deterring undue access by unauthorizedpersons. These requirements have the effect of increasing theproduction costs and derailing the production of the products. Thus,the management of the firm is aware of the financial benefits thecompany can reap if it compromises on the strict ethical rules in thedevelopment of the products. Another crucial stakeholder involved inthe company’s code of conduct is the employee. The company hasdeveloped ethical standards that should be observed in relating withthe workers.
Accordingly,the company’s ethical standards prohibits employmentdiscrimination, exploitive working hours, unsafe working environment,child labor, and censored association in the various subsidiaries ithas opened operations globally(DFEI, 2011).The ethical demands in the various subsidiaries the Apple Company hasacross the world has the effect of increasing the operational costdue to the investment the company is supposed to undertake to sustainthe ethical standards. Thus, the management of the company hasdecided to undergo the cost despite the negative effect it has on theshareholders’ earnings. Moreover, the customer is the otherstakeholder considered in the ethic decisions of the company. Theethical decision made by the management of the Apple towards theconsumers is inclined towards the privacy safeguard in the new era ofcyber spying and hacking. The ethical decision undertaken by thecompany has involved designing and developing sophisticated securitysoftware in protecting the company’s products from undue hackingand spying(Gibbs, 2015).Thus, the privacy of the consumers has adequately been protectedunder the new measures the company has undertaken. Similarly, thecompany has defied governments’ pressure in accessing essentialdata of consumers stored in Apple’s products.
Oneof the typical cases demonstrating the ethical decision made by theApple management despite of the financial benefits it could havegenerated in the future is refusing to hack the iPhone of a suspectedterrorist(Spangler, 2016).The unlocking of the iPhone will help the U.S government to retrievecrucial data stored in the device in unearthing the network ofterrorist groups in the country and globally. This advancement hasthe effect of generating a positive relationship between the AppleCorporation and the U.S government, which might attract economicbenefits in the future. However, the management of the company hasdefied the request due to the concerns it has on the security of itsloyal customers. Even though the cooperation has the effect ofenhancing the attractiveness of the company for helping the Americansociety to combat terrorism, it has negative long-term effect on theconfidence of the consumers. The consumers are likely to fear thepotential of been exposed to undue spying due to the software thecompany will develop to unlock the iPhone devices. Consequently, thedecision by the management is ethical since it protects the consumersfrom been exposed to privacy violation in the future.
Theethical decisions adopted by the management of the Apple Corporationdemonstrate the balancing played between the financial benefits andthe ethical business operations. Even though the management of thecompany can decide to avoid ethical standards to minimize theoperation costs, it has a negative impact on the long-term survivaland competitiveness of the company(Maheshwari, 2012).Business ethics are instrumental in defining the relationship abusiness gains between consumers, employees, and the suppliers in thefuture. Thus, the decision to observe ethical behaviors by the AppleCorporation is intended at enhancing its reputation in the market,which is essential in sustaining a positive relationship with theemployees, suppliers, consumers, and the regulators(George, 2009).Consequently, the Apple Corporation business ethic decisions areintended at enhancing the image of the firm, which has a positivefinancial impact on the business in the long-term.
Indeed,the positive image the firm has been able to create has sustained itsloyal customers in purchasing its products due to the enhancedquality and privacy confidence the ethical decisions have generated.Similarly, the company has been able to lower trade disputes, whichaffects smooth operations. Thus, the ethical decisions that have beenadopted by the management of the Apple Corporation are instrumentalin promoting its financial strength in the future. The benefits theApple Corporation stands to acquire from the ethical decisions it hasundertaken demonstrates the reason behind the decision by themultinationals to operate ethically. The multinational enterpriseshave been adopting ethical principles in their operations to ensurethey are acceptable in the new markets they enter(Crane & Matten, 2010).Accordingly, the ethical decisions are instrument in ensuring themultinationals are able to operate smoothly in the foreign countries.
Crane,A., & Matten, D. (2010). Businessethics: Managing corporate citizenship and sustainability in the ageof globalization.Oxford: Oxford University Press.
DFEI.(2011). AppleInc.’s Ethical Success and Challenges.Retrieved 2016, fromhttps://danielsethics.mgt.unm.edu/pdf/apple%20case.pdf
George,R. T. (2009). Businessethics.Boston: Prentice Hall.
Gibbs,S. (2015, June 23). Googleeavesdropping tool installed on computers without permission.Retrieved March 26, 2016, fromhttp://www.theguardian.com/technology/2015/jun/23/google-eavesdropping-tool-installed-computers-without-permission
Henn,S. K. (2009). BusinessEthics: A Case Study Approach.New York: John Wiley & Sons Inc.
Maheshwari,R. P. (2012). Principlesof Business Studies.Boston: Cengage.
Spangler,T. (2016, February 17). AppleCEO Defies U.S. Order to Hack iPhone of San Bernardino ShootingSuspect.Retrieved March 27, 2016, fromhttp://variety.com/2016/digital/news/apple-ceo-privacy-iphone-san-bernardino-shooting-1201708691/
Virginia.(2014). AppleInc. – Code of Conduct (Ethics Statement).Retrieved 2016, from BUS100mlmuseAppleInc:https://sites.google.com/a/email.vccs.edu/bus100mlmuseappleinc/home/apple-inc-code-of-conduct