AQA BUSS4 Section A 2011: Corporate Social Responsibility
PRACTICE ESSAY QUESTIONS
Apple and Foxconn
Stimulus Material
Apple is one of the world’s leading producers of mobile devices with a strong reputation for product
innovation and high customer loyalty.
In 2009 it was widely reported that Apple’s Chinese-based suppliers were using child labour in several of
their large-scale factories. At the largest factory – Foxconn – a growing problem of employee suicide
was also reported which was blamed on unethical management approaches.
Apple was heavily criticised for its standards of corporate social responsibility. In response, Apple
instigated a comprehensive programme of supply chain audits, the detailed results of which it reports
openly on its website.
The problems experienced at Foxconn and other suppliers has not stopped Apple from reporting
continued significant increases in revenues, profits and a growing share price.
Question
With reference to the item above and your own research, to what extent do you agree that the greatest
influence on the CSR responsibilities a firm takes on is the fear that bad publicity may damage a firm’s
reputation and brand?
Key Essay Hooks
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“Greatest influence” what other internal/external influences might be more important?
Reputation and brand damage – the link with revenues and profit
Fear of bad publicity – suggests link between CSR and risk management
Key Application Points re Apple & Foxconn
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Strength of Apple’s global brand & appeal – able to withstand bad publicity
Apple’s customers – more concerned about innovation than CSR?
Complex supply chain do to need for mass low-cost manufacturing
Apple has been transparent about the problems – pre-empting NGO/media investigation?
Arguments For
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“It takes 20 years to build a business but just 5 minutes to destroy it” (Buffet) – vital to identify
CSR responsibilities that could materially affect business reputation if things go wrong
Shareholders are the primary stakeholder group – so anything which potentially damages their
value will be a priority for Directors
Businesses that rely on their brand reputation are much more exposed to long-term costs of bad
publicity
Arguments Against
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CSR doesn’t have to be a defensive choice (risk management) – it can be a positive action
which builds reputation – which increasingly shareholders are expecting of their management
CSR as a net benefit to profit – reducing costs in the supply chain (a motivation for greater
supplier control and auditing by Apple?)
Multinationals recognise that as they extend their supply chains to take advantage of
globalisation, they have to take on greater responsibilities
Depends On…
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Management culture and leadership – how do they view the role of CSR?
Nature of the business – how heavily regulated or monitored by NGOs?
What are the likely costs of bad publicity?
Are we referring to the long or short-term in terms of reputational and brand damage?
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