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Ethical Issues In The Consumer Electronics Industry Management Essay

Throughout the earth where we live, our company is faced with honest dilemmas every day. The buyer electronics industry is not any different for the reason that they face issues in their day-to-day activities that violate moral standards of population. Companies in this industry are among the most lucrative organizations around the globe. Several companies may appear sound and ethical from the outside, but what we do not see is the unethical patterns occurring at the lowest level of the business. The consumer electronics industry has offered lots of products which have changed just how people live their lives, however the issue that faces these products will be the unsafe labor tactics that get into making the merchandise. These high-tech products are often times created in sweatshops or factories with poor working conditions.

The consumer electronic digital industry keeps growing more and more competitive every day. Companies want to create the latest leading edge electronics for their consumers. Manufacturers in the consumer electronics industry are under an elevated amount of competitive pressure to help make the first, the best, and the most unique product available. Products are being approved through the source chain more rapidly and the basic safety and health of the stock workers is often dismissed.

In recent years, Apple is one of the companies that have been under fireplace because of their unfair labor tactics in their production factories abroad. Apple's success arrives in large part with their progressive products that they create in their sweatshops. According to S. Prakash Sethi, "With regards to the management of its resource string and treatment of workers in the Chinese language factories that produce its products, it hides behind the constraints of prevailing industry techniques. " (Sethi, 2012) The biggest issue aside from the reality it breaks local and countrywide laws is the actual fact that these methods are in violation of Apple's code of do. Although a code of do is by no means the law, the company has repeatedly guaranteed to change the way their factory personnel are cured but that has yet to occur. Several studies have surfaced from Foxconn, a making spouse for Apple, about staff suicides from the appalling working conditions in their facility in China. Relating to an article by S. Prakash Sethi, personnel have reportedly faced unforgivable living conditions, below-standard income, and harmful conditions from harmful chemicals among other unjust treatments. (Sethi, 2012)

As due to the heinous conditions, Apple not only encounters pressures from regulations, but also pressures from loyal customers and community investors. Apple's customers are carrying on to buy their products, but some have become wary of the unethical ways the products are being made. This also has a direct effect on investors because they are less inclined to support an organization if indeed they face legal and moral issues with the way their products are built. Worker pressure is also vitally important to companies in the consumer electronics industry as well. Matching to articles from Ethicspoint, "research has proven that companies that are considered having a strong moral culture enjoy competitive advantages due to high employee morale, low turnover, and lowered exposure to fraudulence or fraud. " (Conformity, 2012)

The most important responsibility of Apple and other Multinational Companies is to generate revenue from the merchandise they create. These businesses have corporate tasks as well including monitoring the impact with their business activities on the employees, customers and stakeholders and society as a whole. An organization's corporate responsibility should be portrayed in its code of carry out where it can be seen by employees, stakeholders and contemporary society to become held accountable for their actions. Apart from these unethical tendencies in the consumer gadgets industry, companies are facing extreme levels of pressure to keep up with the requirements of the customers and competition using their company competitors.

Pressures Facing the Industry

A whole lot of negative light has been shed on the consumer electronics industry in the past several years. Virtually all major gadgets companies outsource their manufacturing and value chain activities overseas, where resources and labor are significantly cheaper. While outsourcing their processing processes abroad, mainly to China, enables these companies to market their products at lower prices here in the United States, far too many of the companies are also utilizing their outsourcing as a means to getting around good labor procedures, and even straying away from the standards laid down in their own company codes of conduct. In america we are now becoming aware of precisely how bad it is in many of these manufacturing factories. It is because journalists and activist organizations are browsing these factories and documenting the unfair labor practices that are being widely used. Before couple of years, negative reviews in papers and publications have destroyed the reputations of companies such as Apple, Dell, IBM, Lenovo, Motorola, Nokia, Sony, Toshiba, and many others. (Duhigg, and Barboza, 2012)

Organizations are using third party processing facilities to assemble their products. Apple is one of the companies that has come under tremendous scrutiny before year for his or her ties to the infamous Foxconn making company. At Foxconn and many other gadgets factories in Asia, unsafe working conditions, the use of child labor, impossible goals to manufacture the merchandise and brutal management styles are devastating the workforce and even resulting in many documented situations of worker suicide. (Biddle) The unsafe and unfair conditions in these factories could not be acceptable routines here in america, and even while reports of the abuses flood into the US, there's been little influence on these companies' profits. For instance, when the iPhone 5 had been made at a Foxconn manufacturer in China, and information of the severe conditions, manufacturer explosions, and employee suicides commenced surfacing in the United States, still in the first quarter of its release, Apple's sales were only tied to the amount of production its factories in China could churn out. (Duhigg, and Barboza, 2012) This sort of reaction of "turning a blind eyesight" is not a typical effect for American consumers. This sort of buyer behavior in the United States only escalates the impossible prospects of factory professionals in China. When Nike and Distance came under open fire a couple of years ago for their unfair labor tactics in overseas factories, there was general public outrage and their gains suffered because of this. People began looking at their products as tainted goods, and both companies made comprehensive changes to improve these issues. (Biddle, 2012)

In the consumer gadgets industry however, it appears that the merchandise themselves are looked at by the common American consumer as so valuable that it's worth it to look the other way, and could care less about how exactly it's made, so long as you have it and it's really the hottest and best tool out there. Lots of the companies which have come under scrutiny have reacted to the accusations by creating an auditing process because of their factories and vowing to stick to their company rules of conduct throughout their value chains. Although companies want to make corrections to these promises, changes in the manner these factories operate and treat their workers have yet to be made.

Apart from unfair labor methods, activist organizations such as Greenpeace also have released reports urging several consumer electronics companies such as Apple and Nokia to lessen the carbon footprints still left by their processing crops in China, where there is much less regulation than here in america. (Perella, 2012)

Corporate Community Responsibility Activities

The usage of inexpensive offshore production, loaded with unethical ties, is obviously the brand flaw of this industry from an honest standpoint. This flaw makes the simple task of finding a technologically competitive cellphone or music player stated in an ethical manner extremely difficult or near impossible. The earlier mentioned ethical issues and stresses may can be found in nearly all companies in this highly competitive and profitable industry, but quite of few of these same companies have grown to be focused on their commitments to be socially responsible and have been proactive in bettering their interpersonal and environmental impact along the way. In fact, remarkably, a number of consumer electronics companies are constantly highly ranked in studies position corporate public responsibility credited to these initiatives. Included in these are well-known companies such as Hewlett Packard, IBM, and Intel. The three earlier mentioned companies were ranked in the most notable five of CR Mags CR's Best Corporate Individuals of 2010, which placed the 100 companies predicated on several elements including climate change employee relations, environmental, financial, governance, human being privileges, and philanthropy. ("CR's 100 Best Corporate and business Individuals 2010", 2010)

As previously explained, lots of companies on the market have made contributions in terms of Corporate Sociable Responsibility (CSR). Socially speaking, the issue of the use of issue minerals has been on the forefront of CSR efforts for several consumer electronics companies requiring these materials and elements for parts. Hewlett Packard along with several others in the industry has begun to employ the use of the Conflict-Free Smelter program to preferably correct the issues along the source chain causing social trouble. Environmentally, several companies in this industry have began supporting electronics recycling initiatives and have sought to increase energy efficiency within their products. While figuring out those participating in CSR, we found that the majority show similar initiatives primarily targeted at openness and transparency.

While some of these companies are extremely productive in their CSR assignments, others have a tendency to utilize fewer resources and expend less effort attempting to better their impact and image through these kinds of initiatives. Research in Movement is an example of the later and constantly produces some of the least green products on the marketplace according to the Greenpeace Guide to Greener Electronic. ("Guide to Greener Electronics", 2012) IBM, although highly placed for being much better than most in conditions of CSR has had its fair talk about of issues relating to a lack in responsibility and in 2004 was even sued by 50 current and past workers for cancers attributed to workplace subjection. ("The 100 Worst Corporate Citizens", 2006) Apple could be viewed as lacking in these actions as well. Apple's Previous CEO, Steve Jobs, views on CSR were less than favorable while the current CEO, Tim Cook, has initiated an employee charitable matching program and other smaller initiatives, it includes yet to see value in truly embracing this way to do business (Chun, 2011). One can simply locate companies more or less socially dependable than others in an industry as large as the buyer consumer electronics, but given the similarity of the CSR programs in this industry, it is this in mixture with the ethical aspects of the companies that together drive our investment tips for Virginia Tech.

Social/Ethical Investment Insurance policy Recommendations

Virginia Tech's motto is Ut Prosim, That I MIGHT Serve. In a community where a hands-on engaging method of education can be used to help put together scholars to be leaders in their domains and communities, Virginia Tech should take corporate and business public responsibility and ethical issues regarding the consumer consumer electronics industry into account in its investment decisions. The University's objective statement claims that through its focus of "the finding and dissemination of new knowledge" they wish "to broaden personal expansion and opportunity, improve sociable and community development, foster economical competitiveness and increase the quality of life. " (Virginia Technical, 2012) The affirmation emphasizes an optimistic impact on the communal environment. Ethically, an institution such as Virginia Tech should not be inclined to sacrifice moral reasons for expected financial returns.

Corporate cultural responsibility can be an organization's obligation to maximize its positive effect on stakeholders and also to lessen its negative impact (Ferrell, 2011). Economically, any investor's main goal is to receive just as much financial return in any investment. However, in a community where a positive effect on the social environment is stressed the ethical issues looming throughout the buyer electronics industry should be studied into account when contemplating to invest. Virginia Technical strives to produce market leaders in their fields and areas. For the students of the college or university to fully understanding the concept of the worth Virginia Technology was founded upon, the university itself should be the ultimate leader. By not only stating but also doing and showing the university's purpose of emphasizing the importance of its principles to the city. Due to the increasingly popular for products in the consumer electronics industry, every company will will have a flaw in which they ethically hold. As mentioned early, many companies have begun showing transparency of the company by releasing cultural responsibility reviews of critical working conditions in a lot of their factories. These businesses are taking the initiative to develop into more ethically and socially dependable institutions. Virginia Technical should consider these functions of openness when selecting which companies within the buyer electronics industry to purchase. Finding an acceptable middle ground to gratify both Virginia Tech's financial needs and honest principles is ways to satisfy its corporate social responsibility.

The reality Virginia Technical is a university or college center on technology it would be difficult to avoid certain investment funds due to ethical reasons. Sometimes the innovative technology is stated in unethical ways. However, lately, light has been shed on the disturbing conditions in which products are created. Because of informing resources, many companies have began to address these ethical and sociable concerns and also have introduced solutions to make improvements. One way sociable concerns have been provided to consumers is through a free of charge website called Sourcemap, where consumers are able to monitor the lifecycle of each component of something to map its carbon footprints. (Scott, 2011) Consumers can use this website to see if a corporation is taking the environment into consideration by heading greener.

In the process of manufacturing gadgets, many products contain toxic PVC (vinyl) plastics. Matching to Greenpeace, many of the major electronics-producing companies have adapted guides to greener gadgets. The key company in the consumer gadgets industry with the best environment concerns is Hewlett-Packard. Some of the worst companies who've not done considered any initiatives in producing toxic-free products are Samsung, Dell, Lenovo and LG Electronics. (Greenpeace, 2010) Virginia Tech should stray away from investing in these companies, because the companies have yet to modify plans to support the surroundings, which would make these companies more socially sensible. Aside from companies helping the "live green initiative, the condition in which manufacturer workers are forced to work in is another concern. Although not everything about the developing process of something can be known, Virginia Technology can research and find what information is designed for certain companies and utilize this information in guiding their investment decisions.

For a university with foundations of research and technology, it will be hard to consistently stand by the principles Virginia Tech thinks in when buying companies with the leading and most up-to-date technology. Even when the consumer population understands of the interpersonal wrongdoings that go into the manufacturing process of something, consumers continue to buy and pressure the company because of its products. Should Virginia Technology do the same and only get worried about their investment earnings? As an organization stressing the value of public and community development, they should also consider the effect on the community all together and the stand by position their prices.

Investment Recommendations

After researching the buyer Gadgets Industry and assessing the good the industry does indeed to the bad, it is our advice that Virginia Tech invest in only certain companies within the industry. We found, like any other industry, there are companies that are showing they may be socially responsible and more that disregard being socially dependable and instead focus only on profit. One reason that Virginia Tech should spend money on this industry is because of the continuous improvements in communal responsibility that some of the participants of the industry show. This has been shown in such initiatives as creating greener gadgets and decreasing their carbon footprint as discussed before. Another reason that Virginia Technology should invest in certain companies within the consumer electronic industry is as a result of increase in electric recycling that has shown up within several companies. Some companies have even eliminated so far as to set certain times that they would like to reach a degree of recycling. We believe that these ethical and socially sensible initiatives along with others provides Virginia Tech reasonable to invest in the consumer consumer electronics industry.

There are certain companies that people would choose not to invest in because of their lack of public responsibility definitely not their lack of growth and income. One company that we indicate Virginia Tech avoid investing in at this time would be Apple. We consider with their insufficient interpersonal responsibility and their use of unfair labor tactics, would not be considered a good honest move for Virginia Technology to invest in. Apple was providing at $193. 91 per talk about and has grown to sell for $533. 25 per show in December of 2012. (YAHOO! Financing, 2012) This is a tremendous development and from an financial standpoint it would make sense to purchase Apple but our advice is based about how poorly Apple is doing as it pertains to corporate social responsibility. Income isn't everything and we believe that if Apple maintains ignoring their corporate communal responsibility and only tries to maximize profit then they may get caught up in more issues. Investing in Apple would not be a smart move, ethically for Virginia Technology.

One company within the consumer electronics industry that we believe Virginia Tech should spend money on is Hewlett Packard. Hewlett Packard, as we reviewed earlier, has consistently been among the best companies in the buyer electronic digital industry at being socially responsible. The financials for HP are currently not that great, with a value of $52. 03 per talk about in December of 2007 and now in December of 2012, a selling price of $13. 94 per talk about. (YAHOO! Fund, 2012) This is not a good change over that point period, fiscally, but it is our perception that HP will be a better investment for Virginia Technology because they are a leader in cultural responsibility. We think that this continuous work by HP to be socially dependable will eventually help them to rebound and be a profitable investment for Virginia Technical in the foreseeable future. Another effort by HP that we believe can help make them a far more profitable investment is the fact their computers are assembled in the United States. Matching to Brooke Crothers, "If MANUFACTURED IN USA is an attribute, Hewlett-Packard's got Apple defeat. " (Crothers, 2012) We believe that this can be an important aspect that will assist HP due to economy and the fact that most people want jobs for Americans at home. As shown we think that it is quite clear that Virginia Tech should spend money on the consumer consumer electronics industry, more specifically HP but not Apple. This investment will be profitable for a long time and a long time once HP recovers financially with the continuous development of the industry.

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