- Lower labor cost
- Chinese subcontractors respond very quickly to requests from Apple to scale production up and down.
Example: Steve Jobs wanted glass screen to replace plastic screen in iphone
- Easier to hire engineers in China
- Clustering together of fctories in China
Potential costs and risks:
- Low payline workers may strike
- Long working hour may lower efficiency in future
- Mandetory overtime with little or no additional pay will demotivate workers
- Poor safety records will hamper Apple’s brand image
- The biggest risk to Apple is their idea will get copied as the country for assembly is China
2) In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here?In China, factories are clustered together. Many of the factories providing iPhone components for final assembly are located close to Foxconn’s assembly plant and benefit from Apple’s manufacturing decisions. The employers and employees of the hired factories in China benefit from Apple’s decision to outsource, because now more jobs are available for them.The potential losers here are people of United States, because they are losing their jobs to Chinese people, as Apple is now outsourcing in China. Despite Apple’s claim that it supports more than 250,000 jobs in the United States, it also supports an additional 700,000 jobs outside of the U.
S.—jobs that possibly could have been filled by workers in the United States3. What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple deal with these?The most obvious ethical problem with outsourcing assembly jobs to Foxconn is that they dismissed the American people as though they are not worth offering the jobs to. There are many American citizens that simply do not agree with Apple’s decision to outsource their jobs to China, because it doesn’t benefit the American people but rather only Apple.
Poor working condition: One of the biggest ethical problems associated with outsourcing assembly to Foxconn is that the employees have been targeted for their poor working conditions.
4. On balance, do you think that the kind of out-sourcing undertaken by Apple is a good thing or a bad thing for the American economy? Explain your reasoning?Ans: Yes I think outsourcing is a good option for Apple and it will also help the economy. As because of outsourcing in China Apple can produce iPhones at a much cheaper price as the cost of labors and the cost of parts are low. As the price of the phones would be lower, the demand for the phone would increase and then Apple can export more phones then it would benefit the economy of America as there will be a positive impact on the Balance of payment of America.There will be also increase in demand for iPhones in the America so the demand for imported phones will decrease and if import decrease then it will be beneficial for the Balance of payment of America which will ultimately be beneficial for America’s economy.