Ethical Issues in Apple Inc.

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Introduction

Apple Inc. is an organization that manufactures and markets computer hardware, software and electronics. It was established in 976 and its headquarters are located in California. Steve Wozniak, Steve Jobs and Ronald Wayne were the founders of the company. Steve Jobs worked as the president of the company during its early years and left the management of the company after conflicts arose from the board of directors.

He later joined the company in 1997 as the CEO. Steve Jobs worked as the president of the company until he passed away in 2011. The company has dominated the local and global markets. Apple has been renowned for its innovative strategies, and this has made it achieve global recognition.

Despite the stiff competition in the computer industry, apple Inc. was able to overcome the competition in the market by developing innovative products.

There are other strong companies in the market such as Microsoft, IBM, and others but they were unable to stop Apple from dominating the global markets. Apple has been able to win the loyalty of consumers globally because it offers the best quality products in the market (Imbimbo, 2009).

The success of Apple Inc. is attached to Steve Jobs because it is during his reign that the company achieved great successes. Steve Jobs was successful in implementing his leadership strategies because he made the company achieve competitiveness in the global markets. It is under his leadership that the company was able to develop innovative products such as iPod, iPad, iPhone and others.

However, Steve Jobs was reported to suffer from pancreatic caner, and this caused his death. The information about his health status was not disclosed until it was inevitable to provide the public with the actual details concerning the health status of Steve Jobs. In some instances the directors of the company miscommunicated about the health status of Jobs.

The idea of miscommunicating the health status of Steve Jobs has been challenged on ethical backgrounds (Imbimbo, 2009). In this paper, the author discuses the ethical issues relating to miscommunication about Steve Jobs’ health status before his death.

A brief description of the ethical or social justice issues

The manner in which the directors and the CEO communicated about Steve Jobs health condition caused a lot of ethical questions. It was reported that Steve Jobs suffered from hormonal imbalance. In other situations, it was reported that Steve Jobs suffered from nutritional imbalance.

The health conditions of Steve Jobs had remained a secret until when it was impossible to hide. He was given a medical leave after the company realized that his health was at stake (Kahney, 2011).

In December 2010, the company reported that Steve Jobs was to take six months leave because he had complex medical issues. Many people were questioning whether the leave was caused by nutritional balance or a serious medical issue. The facts were that in 2004 Steve Jobs was identified to have suffered from pancreatic cancer.

It appeared as if Steve Jobs had recovered completely until 2008 when he lost weight swiftly. In the real sense, he was undergoing a liver transplant prior to his death. A liver transplant was done to him but his life could not be salvaged, and he succumbed to death out of the transplant in October 2011 (Kahney, 2011).

According to Securities Exchange Commission (SEC), Apple Inc. was not ethical when it failed to provide full disclosure about Steve Jobs health conditions. It is a requirement of SEC that all public companies should provide full disclosure to information that may affect the stakeholders. The liver transplant done to Steve Jobs was material and there was need to provide the accurate information about his health (Kahney, 2011).

It was feared that when the shareholders of the company realized that Steve Jobs was unhealthy, the company would suffer a lot of losses because the shareholders would withdraw their assets from the company.

However, this contravened several ethical issues. Shareholders have a right to “full disclosure of all material information” concerning a company. The health condition of the president was material and there was need to disclose all the information (Kahney, 2011).

Apple was not ethical in miscommunicating health information relating to Steve Jobs. This behavior damaged the reputation and the trust that stakeholders had to the company.

The issues concerning the health of Steve Jobs were of great concern to all stakeholders because the company had a good public image, and shareholders relied on the reputation of the company. The employees and customers of the company were also affected by the unethical behavior of the top management (Kahney, 2011).

The ethical or social justice issues in terms of one or more of the philosophical theories/theorists from the course

Full disclosure of material information is a requirement of all public companies. Information is considered material if it affects the stakeholders of a company. The managers of a company have an obligation to provide all information that may affect the stakeholders.

Failure to disclose any information is unethical and may cause legal action. SEC provides that providing full disclosure alerts shareholders about the performance of their investments, and that they can react promptly to safeguard their interests.

Investors need all the information concerning the performance of a company to avoid making losses. The Securities and Exchange Commission requires that the managers of a public company should disclose all the insider information regarding public companies (Securities and Exchange Commission, 2011).

Investors rely on the insider information provided by the management and directors of a company to decide on the actions to take. Failing to provide all the information may affect the decisions made by investors.

SEC was introduced to protect the interests of all stakeholders against misconduct of public companies. It requires that all public companies should communicate accurate information about their operations (Securities and Exchange Commission, 2011).

Relationship of the issues relating to Apple Inc. to the four themes of social justice

The issue surrounding Apple Inc. is related theme of social justice. Miscommunication of material information that may affect a public company is related to the justice theme of social justice. It relates to unfair business conduct because it does not allow the stakeholders to have make decisions depending on the prevailing conditions in the company.

It is the right of all investors to be informed about all the activities of a company that may affect then performance. All stakeholders require the information provided by directors to make decisions concerning their interest in the company. It is not fair to provide false information about a company because it can cause the stakeholders to make wrong decisions (Harvey, 2009).

The stakeholders of a public company are at liberty to obtain any information pertaining performance. It is an ethical requirement that the directors should offer the accurate information concerning the performance of the company. It is illegal information to stakeholders, and this may cause legal action to be taken against a company.

The major challenges presented to Apple Inc. as a result of the ethical or social justice issues

It is my perfect believe that Apple Inc. experiences a major challenge in securing the trust of all stakeholders after the directors miscommunicated about the health status of Steve Jobs. Investors of the company have lost trust on the directors, and this affects the performance of the company. Investors provide capital to the company by buying stock and other assets; and their withdrawal can affect the capital base of a company.

The overall effect is that the profits of a company are reduced when investors withdraw. In return, the customers are affected because the company cannot perform effectively and efficiently. As a result, employees are affected when the profits of the company are reduced (Hopkinson, 2011).

Consumer loyalty to the company and its products will reduce and this will reduce the profits made by the company. The company has used consumer loyalty as one of its core competences, and this has made the company achieve great success in overcoming stiff competition in the global markets. However, the unethical conduct of directors will reduce consumer loyalty towards the products of the company.

The behavior of the director of Apple Inc. to fail to provide accurate information about the health conditions of Steve Jobs will affect the trust that all stakeholders have to the company.

This will not only affect the internal stakeholders but all stakeholders affiliated to the company. The reputation of the company has reduced, and it risks losing most of its investors. Therefore, failure to provide full disclosure of information affects all stakeholders of a company (Harvey, 2009).

Recommendations for addressing the issues

The directors should rebuild the reputation of the company by providing accurate information concerning the company. All material information should be communicated when they happen ton avoid any other instance like the one that affected the company during the reign of Steve Jobs.

It is also important that the directors should apologize to its stakeholders for miscommunicating to the public about the health conditions of Steve Jobs. This will be an indication of the willingness to correct the mistakes done, and to continue managing the company ethically.

The damage about unethical behavior of the company has already been done, and what should be done is to correct by accepting the mistakes. Apologizing will indicate that the company is ready to avoid such mistakes in future.

Factors that would affect the implementation of the recommendations

Implementation of the above recommendations may be affected by legal actions against the company. It is illegal for any public company to miscommunicate any information that may affect its stakeholders.

The act of accepting the mistakes done by the directors will be an indication that the directors are legal liable for the unethical behavior. This will cause legal actions to be taken against the company. As a result, the company will be required to pay damages to all stakeholders affected by the behavior of the directors.

It is also possible that investors may withdraw from the company when they realize that the directors of the company were aware of the health conditions of Steve Jobs. This will make the stakeholders lose trust with the directors.

This will cause the profits of the company to reduce because there will be no adequate resources/ capital to run the company. In addition, the employees and customers of the company will be negatively affected because the company will not operate at its optimal level.

Expected outcomes of the recommendations

The reputation of the company will be affected, and people will no longer have trust on the company and its products. Most of the shareholders would withdraw their investments from the company, and new investors would not be willing to invest in the company. The company will incur losses by losing capital that is required to finance the operational and development activities of the company.

This will not only affect the profitability of the company in the short run but also the long term sustainability of the company will be affected. As a result, the company will lose its customers because it will not be able to carry out its innovations. The employees will be affected such that some will be retrenched when the company starts to make losses.

The overall performance of the company will be affected, and it will be difficult to regain the reputation and performance of the company.

It is expected that customers will have loyalty to the products and brands of the company because disclosure of the information will be an indication that the company is concerned about the welfare of its customers. Therefore, the recommendations will have both positive and negative aspects to the company and its stakeholders.

References

Harvey, D. (2009). Social justice and the city. New York: University of Georgia Press.

Hopkinson, M. (2011). The Project Risk Maturity Model: Measuring and Improving Risk Management Capability. England: Gower Publishing, Ltd.

Imbimbo, A. (2009). Steve Jobs: The Brilliant Mind Behind Apple. New York: Gareth Stevens.

Kahney, L. (2011). Apple Broke the Law By Lying About Steve Jobs Health. Web.

Securities and Exchange Commission, (2011). Final Rule: Selective Disclosure and Insider Trading. Web.

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