CASE 1 Answer

1. What are the pros and cons for local and overseas labor forces of Apple’s going global?
What are the potential political implications for country relationships?
Answer :
Apple’s decision to manufacture its products in China using inputs sourced from multiple
countries is beneficial for the overseas labor force where new jobs are created and
spillover effects can generate other benefits for the local economy. Local low skilled
labor forces will suffer from a loss of jobs, however higher skilled labor involved with
product development coult benefit it Apple’s products continue to be in high demand.
While the “export of jobs” can create tension between China and the United State, U.S.
companies could stand to benefit if China’s now wealthier labor force increases its
demand for U.S made or designed products.

When the electronic appliance giant decided to move globally, it was the high
time for the economy to expect a growth, but the manufacturer, led to the increase in the
unemployment rate in the country as most of the employees were laid off. The reasons
given were that the labour cost in the developing countries is cheap as compared to the
United States. The labour cost was making a lot of saving for the company. The
additional cost of labour was adding money to the overall cost of the appliances.

The pros for overseas workforce were to get more opportunities. This had boosted
their economy. It led to the reduction of the unemployment rate. The cons for the local
workforce were that the unemployment rate increased. This led to the increase in pressure
to train more workforces and create more work opportunities. The potential relationships
between the two countries may get spoiled because one country is getting an advantage of
the local country.
2. As a U.S. corporation, does Apple and its management have a moral obligation to
provide jobs for U.S. employees first? If this is the case, then does this put international
employees at a distinct disadvantage?
Answer :
Apple has a responsibility to its shareholders to maximise sales revenue at the lowest
possible cost, and in order to do that they need to recruit talented people of any
nationality and pay them as little as possible. So that means that they should seek for
talent throughout the world, and if they have to choose between two candidates of equal
ability they should pick the one who comes from a low-cost country so that the salary
cost will be lower. Not to mention the fact that many Americans expect to get medical
insurance and other high-cost fringe benefits, effectively pricing themselves out of the
game.

It is depending on the personal ethics and attitude of individual students. Many

students will agree with Apple executives, others will suggest that the Apple executives
were too quick to move production overseas. Others still will state that Apple should
support the U.S. workforce and keep its manufacturing at home. The truth lies
somewhere in between.

If the U.S. workforce can be deployed to produce higher-value skill such as idea
generation and development, then lower-level assembly skills should be moved abroad. It
is certainly true that many global organizations will reduce employee numbers abroad
first rather than home-based employee numbers.

Every company seeks for increasing its profit, so if the case of that would be by
employing an overseas labors, so from a business overview this would be the ultimate
solution for them to increase their profit, but from a moral point of view yes the company
should provide jobs for the local citizens first as I believe that most of the top
management in the company are US citizens, I don’t think that this would put the
international employees at any distinct disadvantage.
3. Is it possible for U.S. managers to organize, motivate, and ensure quality in their Chinese
manufacturing facilities?
Answer :
No, because the political and social system in China was quite same as U.S. it can be see,
in China workers cannot form independent trade unions in the labour market which affect
wage level. Beside that, in China the government allows the foreign manufacturing to do
their business in China.

It is important for Apple executives to ensure that the Chinese factories embrace
its corporate values and approach. This mean that training, communication, and
leadership are all important developmental factors.

It is already known that the Chinese employees are more flexible and diligence
also their payment are low, so by conducting some strict items in their contracts they will
be able to manage them better.