CASE 14
Apple Inc.’s Ethical Success and Challenges
CASE NOTE FOR INSTRUCTORS
The Apple Inc. case examines the ethical successes and challenges that the company faces in the highly
competitive technology industry. Because Apple is so admired for its products—and has consistently
scored top place in Fortune magazine’s “Most Admired Companies”—students might not realize that the
company experiences ethical issues daily. This case introduces students to several business ethics issues,
including corporate culture, sustainability, privacy, and intellectual property.
A key section in this case concerns the ethical issues that Apple is experiencing. Students should be able
to relate to some of these issues such as privacy, which is becoming a major concern among consumers.
Apple also got in trouble after a federal judge ruled that a most-favored-nation clause it had with five
major book publishers constituted as price fixing. Suicides and safety issues at its supplier Foxconn in
China opened Apple up to criticism. Sustainability is another area likely to be important to consumers.
Because Apple constantly upgrades products, the company must deal with the problem of old products
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QUESTIONS AND DISCUSSION
1. Explain how Apple’s philosophy and organizational culture have impacted how it handles ethical
decisions.
Apple bases its success on “creating innovative, high-quality products and services and on
demonstrating integrity in every business interaction.” To realize its philosophy, Apple has created a
corporate culture that encourages enthusiasm and innovation among employees. Employee well-being
2. Why is Apple’s industry so competitive and how could this affect the ethical risk in Apple’s
operations?
The technology industry is a race in which Apple and other tech firms are competing against one
another to win the top prize: market share. Due to technological advances in the last few decades, a
product that once took years to develop might take a matter of months. Additionally, consumers who
have become used to this fast pace—particularly the millennials who grew up around technology—
118 Case 14: Apple Inc.’s Ethical Success and Challenges
3. How do you think Apple has handled the various ethical issues that it has faced in the past?
Students’ answers will vary. Those who think that Apple handled its ethical issues well could make
several arguments. In terms of privacy, one could argue that Apple needs to remain competitive. As
long as it does not abuse the information, then there is no harm in collecting information about its
iPhone locations. Apple has also taken strides to become a more sustainable company. Not only does
it build its products with less toxic substances and more recyclable materials, but it also offers
incentives to encourage people to return their old technology for recycling. Since lawsuits are so
common in the technology industry, it is to be expected that Apple will be the target of lawsuits. In
many cases, it is also the instigator. If Apple does not protect its intellectual property, then
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may also want to discuss whether Apple has adequately addressed price fixing allegations and supply
chain issues.
ADDITIONAL RESOURCES
• Cost of human capital to make Apple products: