1. in the United States. Also, Chinese subcontractors can

1.     
There
are several benefits to Apple outsourcing the production of iPhones. Apple
saves money by outsourcing. First, Apple saves money on labor. The cost of
labor is much lower in China than in the United States. Also, Chinese
subcontractors can respond speedily when Apple wants changes in design or
production levels. This is important when manufacturing new models of the
iPhone. It is easier and faster for Apple to hire engineers in China. Furthermore,
China’s factories are clustered together. This makes it easier and more
efficient to get parts to the assembly line. With all of the benefits, it is
important to note that there are potential costs and risks to Apple as well.
Apple’s subcontractor, Foxconn, has faced criticism for its poor working
conditions such as low wages, long working hours, and unsafe factory
conditions. Also, Apple may face criticism from the general public about how
their subcontractors treat the factory workers that make their iPhones. It could
potentially hurt Apple’s public relations if the workers’ situation gets worse.

 

2.     
In
addition to Apple, consumers also benefit from Apple decision to outsource. Like
many products that are manufactured in China, the iPhone would be much more
expensive to buy if it were manufactured in the United States. The labor and
production costs would skyrocket if it were manufactured in the U.S. And so
would the retail price of the iPhone. The people who potentially lose are the
workers in the subcontractors’ factories have to work in poor and unsafe factory
conditions. Also, there could be workers in the U.S. who might have wanted to
work those manufacturing jobs that were outsourced.

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3.     
The
potential ethical problems associated with outsourcing assembly jobs to Foxconn
in China are the treatment of factory workers and poor working conditions in
the factories. Foxconn’s factory workers work long hours for low wages with no
overtime pay with health and safety hazards. There are low safety standards in
the factories. Apple might deal with these potential ethical problems by
implementing regulation on factory labor. Apple could work with Foxconn to improve
factory working conditions including fair wages, pay for overtime, and safety
inspections and improvements. Apple does have the power to take action to
address the ethical problems. Apple’s executives are in a position to help make
a difference. For example, executives at Nike made efforts to address the issue
of factory workers that manufacture their products. When a company commits to corporate
social responsibility, it could lead to investors and consumers responding
positively.

 

4.     
The
kind of out-sourcing undertaken by Apple is a good thing for the American
economy. Apple saves on the cost of labor by outsourcing. This keeps costs of
the iPhone down, and Apple does not need to raise prices drastically, and earns
more profits due to the demand. This drives consumer spending which helps the overall
economy. Apple can use the cost savings and put them into research and
development on new products. Outsourcing helps Apple to continue to innovate,
which is what the company is known for. Furthermore, Apple can use the cost
savings to hire employees in the U.S. in other departments such as engineering,
transportation, and marketing. Apple has 254,000 jobs in the United States so
it is creating jobs in the U.S. as well. Without outsourcing, products would
become more expensive for companies to make, and would become more expensive
for consumers to purchase. Many other companies that have a similar or the same
system of outsourcing production of their products have similar outcomes
regarding labor cost savings, research and development, innovation, and
financial performance.