Case Incident 1: Apple Goes Global

Case Incident 1 Apple Goes Global It wasn’t long ago that products Fro

CASE INCIDENT 1 Apple Goes Global It wasn’t long ago that products from Apple, perhaps the most recognizable name in electronics manufacturing around the world, were made entirely in the United States. This is not the case anymore. Now, almost all of the approximately 70 million iPhones, 30 million iPads, and 59 million other Apple products sold yearly are manufactured overseas. This change represents more than 20,000 jobs directly lost by U.S. workers, not to mention more than 700,000 other jobs given to foreign companies in Asia, Europe, and elsewhere. The loss is not temporary.

As the late Steven P. Jobs, Apple’s iconic cofounder, told President Obama, “Those jobs aren’t coming back." At first glance, the transfer of jobs from one workforce to another would seem to hinge on a difference in wages, but Apple shows this is an oversimplification. In fact, some say paying U.S. wages would add only $65 to each iPhone’s expense, while Apple’s profits average hundreds of dollars per phone. Rather, and of more concern, Apple’s leaders believe the intrinsic characteristics—which they identify as flexibility, diligence, and industrial skills—of the labor force available to them in China are superior to those of the U.S. labor force. Apple executives tell of shorter lead times and faster manufacturing processes in China that are becoming the stuff of company legend.

“The speed and flexibility is breathtaking,” one executive said. “There’s no American plant that can match that.” Another said, “We shouldn’t be criticized for using Chinese workers. The U.S. has stopped producing people with the skills we need.” Because Apple is one of the most imitated companies in the world, this perception of an overseas advantage might suggest that the U.S. workforce needs to be better led, better trained, more effectively managed, and more motivated to be proactive and flexible. If U.S. and western European workers are less motivated and less adaptable, it’s hard to imagine that does not spell trouble for the future of the American workforce.

At this point, the iPhone is largely designed in the United States (where Apple has 43,000 employees); parts are made in South Korea, Taiwan, Singapore, Malaysia, Japan, Europe, and elsewhere; and products are assembled in China. The future of at least 247 suppliers worldwide depends on Apple’s approximately $30.1 billion in orders per quarter. And we can’t forget that Apple posted $16.1 billion in revenue from China in the first quarter of 2015, up 70 percent from the first quarter of 2014, perhaps in part because its manufacturing in China builds support for the brand there. As maker of some of the most cutting-edge, revered products in the electronics marketplace, perhaps Apple serves not as a failure of one country to hold onto a company completely but as one of the best examples of global ingenuity.

Paper For Above instruction

The evolution of Apple's manufacturing and labor practices exemplifies a broader trend in globalization, which presents both opportunities and challenges for companies and governments alike. Apple's strategic shift from domestic to international manufacturing centers primarily underscores economic efficiency, technological expertise, and market proximity but also raises critical issues related to labor, politics, and national identity.

One of the primary benefits of this internationalization for Apple and similar firms involves cost reduction. By outsourcing production to countries like China, Apple dramatically decreases labor costs, which allows them to maintain high profit margins. According to Duhigg and Bradsher (2013), labor costs in China are significantly lower than those in the U.S., sometimes by as much as 80%. The cost savings has enabled Apple to reduce the retail price of its products, making them more accessible and expanding its global consumer base. Furthermore, manufacturing in China offers a level of flexibility and efficiency that is challenging to replicate domestically, as highlighted by Apple executives who praise shorter lead times and faster assembly processes.

However, outsourcing also entails significant disadvantages. Labor force concerns in host countries include poor working conditions, low wages, and a lack of workers' rights, which have been widely reported in manufacturing hubs like China. These issues have led to international criticism and have pressured Apple and other multinational corporations to adopt more rigorous standards and improve workplace conditions (Gao, 2013). Additionally, there are political and diplomatic risks. Heavy reliance on foreign manufacturing can create vulnerabilities, particularly if political tensions rise. For instance, escalating US-China trade tensions or policies aimed at reshoring manufacturing could disrupt supply chains and impact business continuity. The significant investment of political capital and potential tariffs or restrictions also pose risks for the brand’s reputation and profitability.

On the workforce side in the United States, Apple’s move abroad raises questions about national economic health and employment. While some argue that low-cost manufacturing in China harms domestic job creation, others suggest that these policies incentivize innovation and higher-skilled employment in the U.S. Apple’s decision to keep design and high-tech development in America represents a strategic focus on innovation, which complements the lower-end manufacturing activity abroad. This division allows the U.S. to retain engineering talent and control over intellectual property while benefiting from the efficiencies of global production networks.

From an ethical perspective, the company's leadership’s commentary about Chinese labor superiority could be viewed as a reflection of the current global economic landscape rather than a moral endorsement. While on the surface, it may seem dismissive of the U.S. workforce, it highlights the pressing need for American education and skills development. Addressing the skills gap through targeted workforce development and enhanced vocational training could empower the U.S. labor force to compete more effectively in high-end manufacturing and innovation sectors (Chen, 2015). Political implications include potential shifts in trade policies, tariffs, and international relations, which may impact the global supply chain and manufacturing strategies of firms like Apple.

In conclusion, Apple's globalization reflects strategic economic decisions but also brings forth socio-political challenges. While outsourcing manufacturing offers cost and efficiency benefits, it must be balanced against ethical considerations, diplomatic relations, and the long-term health of the domestic workforce. Policy initiatives aimed at workforce skills enhancement and fostering innovation within the U.S. could help mitigate some negative impacts while leveraging the benefits of global supply chains.

References

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• Duhigg, C., & Bradsher, K. (2013). How U.S. Lost Out on iPhone Work. The New York Times, A1, A22–A23.
• Gao, H. (2013). How the Apple Confrontation Divides China. The Atlantic, April 8, 2013.
• Satariano, A. (2013). Apple Slowdown Threatens $30 Billion Global Supplier Web. Bloomberg, April 18, 2013.
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