Tech companies like Apple, Microsoft, and Amazon don’t do their own manufacturing. Instead they use CEMs (Contract Electronics Manufacturers) in countries where labor costs are low and the technical skills needed are available.
There have been numerous scandals relating to these outsourcers – low wages, long work hours, oppressive environment, injurious work conditions, etc.
After the latest scandal, your teenage daughter/son/cousin exclaims: How can you continue to own an iPhone (or Surface or Echo or Kindle)?!
How would you respond? (Even if you don’t have one of these products put yourself in this position.)
- Post your response (250 words) to this issue.
- Post at least two comments (minimum 50 words each) to other students’ responses.
1st student ;
Customers are more concerned about the launch of the new iPhone or iPad on the market than the working conditions of the manufacturing factories. I would respond in an ethical standpoint by explaining that the Contract Electronics Manufacturing facilities of these companies involve working conditions that may not appear to be favorable to us but could mean everything to the ones producing these products. We need to remember that there are many poor families in these countries depending on these manufacturing jobs. There is a risk that these contract workers will lose their livelihood if Apple or Microsoft decide to move to some other country.
In addition, manufacturing in the U.S. or any other developed country will result only in higher costs for these products ‘ customers (AKA my child). Instead of focusing on improving working conditions in one or two companies, the focus needs to be on improving the production environment in these countries through laws and regulations (China, Taiwan, Korea, etc.). Something one must understand is that companies such as Apple and Microsoft can do very little unless local manufacturers change their ways because of their own constraints.
I have an Iphone through my company as well as an Echo at home for personal use, and while the labor environment is very concerning, it will not deter me from purchasing one if these devices as I am a very price sensitive customer who does not need the latest electronic, but rather wait for a price drop on an older model.
2nd student :
Tech companies like Apple, Microsoft, and Amazon outsource many CEMS in other countries, usually to exploit labor or cost arbitrage. Ethically, consumers should care about the working conditions at the Contract Electronics Manufacturing facilities of these companies, but most do not think about how these products are made or what conditions they were made in. When consumers do think about this issue, many of us do not like the fact that these outsourced CEM’s are working on poor conditions, but we feel helpless to the cause. Consumers can protest, boycott, start riots, etc. to start the conversation in improving these working conditions, but in most cases that does not work.
By outsourcing these skills, the companies identified can focus on their core-competencies and create better efficiency. Manufacturing in the United States, or any other developed country, will lead to an increase in the cost of these products for customers – and many of us focus on the price when buying tech products to try and get the best deal. Additionally, in these underdeveloped areas, many poor families in these countries depend on these manufacturing jobs, even if they are in terrible working conditions.
The best way to fix this problem is to focus the regulations behind these manufacturing factories in underdeveloped countries and outsourcing to them. Companies can still save on labor costs because the cost to live in these countries is much lower than in the United States, but we should be able to protect these workers from long work hours, an oppressive environment, injurious work conditions, etc.
Ethical Issues in Outsourcing
My response to the question would be based on two factors, quality and authority, explained from a perspective understandable to the child. While the child may not understand outsourcing in the sense of the word as used in the context of business, she may understand it from a perspective of the different products she uses that give her some form of contentment. For instance, she prefers playing video games on the PS gaming machine as opposed to X Box.