Apple computers outsources most of its work to other countries. Recently it has

Question

Apple computers outsources most of its work to other countries. Recently it has made the news because the plant in China that assembles some if its most lucrative products has a high suicide rate because of the work conditions at the plant. This is both a risk to reputation issue we considered in risk management and an ethical issue. You are the CEO of Apple and have to consider how to respond to this problem. Please answer these three questions:
-What are two ethical issues you have identified as being most important associated with this problem?
-What are two risk to reputation issues that you have identified that are associated with this problem?
-As a CEO and risk manager what strategic risks do you see as a result of this problem?

Explanation / Answer

Ethical Issues.

1. High suicidal rates indicate improper work life balance in the organization.

2. This also indicates inefficient decision making by top level management.

3. Improper holiday and pay structure causing depression and frustration resulting in suicides also pose an ethical issue for the company.

Reputational Issue

1. Press releases exposing employees suicidal rates cause losses in stock market.

2. News stories and case study of the organisation discourages any fresh applicants joining the company and existing employees quitting, causing low work force, thus affecting working and production of the company.

Strategic Risks

1. It is highly dependent for lucrative products on one country, that is China, and therefore there is a high potential of losses if the situation does not come under control immediately.

2. Being a company that offers its products to high net worth and rich customers around the world, than any other segment, there is a potential of downfall in profits and sales due to these negative situations very swiftly.

3. It gives high potential for it's competitors to now grow beyond in many ways.

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