Business Ethics

Q2: An organization may afford the luxury of being ethical in conducting its
business. Select an organization and describe some of the ethical dilemmas it
may encounter.

Introduction

Business ethic is the behavior that a business adheres to in its daily dealings with the world.
The ethics of a particular business can be diverse. They apply not only to how the business
interacts with the world at large, but also to their one-on-one dealings with a single customer.
Many businesses have gained a bad reputation just by being in business. To some people,
businesses are interested in making money, and that is the bottom line. It could be called
capitalism in its purest form. Making money is not wrong in itself. It is the manner in which
some businesses conduct themselves that brings up the question of ethical behavior.
Good business ethics should be a part of every business. Many global businesses, including
most of the major brands that the public use, can be seen not to think too highly of good
business ethics. Many major brands have been fined millions for breaking ethical business
laws. In this assignment, we look into Apple Inc., one of the most celebrated major electronic
firms that has encountered an ethical dilemma that cost the company serious reputation
downfall. According to studies and surveys, it was found that many of Apple’s
groundbreaking products contained toxic substances, including the legendary iPhone. This
assignment looks into Apple’s business ethical codes of the environment and the measures it
has taken after being critically condemned by a global non-governmental organization,
Greenpeace.

Toxic Apple
Before an audience of tech lovers, developers, and Mac enthusiasts, Steve Jobs unveiled the
creation everyone has been speculating about for years: the iPhone. Fans hung on every word
as the Apple CEO stood onstage during his keynote address at the Macworld Expo in San
Francisco. Dressed in a black mock turtleneck, he told the rapt crowd about patents for
polymers, innovative user interfaces and corporate partnerships.
Jobs went on for nearly two hours about how amazing and revolutionary his gadget will be.
But he did not mention the company's environmental policy once.

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Apple, the celebrated computer company, has been rated worst among major electronics
firms for its environmental policies by the pressure group Greenpeace.
In a new survey of 14 major companies, the manufacturer of the Mac, the Powerbook and the
iPod was put bottom of the list for its policies on the elimination of toxic substances and
recycling. It was an unaccustomed stain on the halo for the firm with the highest brand and
repurchase loyalty of any computer manufacturer, a glittering reputation as a design leader,
and a fan base as enthusiastic as any rock band's.
Greenpeace charged that Apple "scores badly on almost all criteria" in a detailed survey of its
environmental attitudes and practices, ranging from timetables for phasing out hazardous
chemicals to the adoption of the precautionary principle. The ranking was made in the
updated version of Greenpeace's Guide to Greener Electronics, which was published on the
Greenpeace International website.

Following the release of the report, Greenpeace launched "GreenMyApple," a full-force PR

campaign complete with an informational website that impressively mimics Apple's website.
Activists distributed flyers outside of the Moscone Center during the full week of Macworld
Expo. The group also altered the video of the famous Steve Jobs keynote address, creating
their fantasy version of the keynote in which Jobs would announce that Apple plans not only
to step up their environmental policies but will make environmental responsibility a part of
the company's identity.
The background to the dispute between Greenpeace and Apple is the growing concern about
the phenomenon of e-waste - electrical and electronic goods which have come to the end of
their lives. The production of all these devices, from computers and printers to CD players
and mobile phones, is the fastest-growing sector in the manufacturing industry in the
industrialised countries.
The Tragic Truth of E-Waste
The United Nations Environment Programme estimates that between 20 and 50 million tons
of them are thrown away as obsolete every year - with potentially serious risks to human
health and the environment. This is because they are classed as hazardous waste for the toxic
chemicals they contain, and so are expensive to recycle properly. Instead, huge amounts are
shipped (especially from the US) to China and India, where they are broken up for scrap,
often by children, in dumps.
Greenpeace is mounting a two-pronged campaign against what it says is an environmental
disaster in the making by pressuring the manufacturers both to phase out the toxic chemicals

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inside the products, and to take responsibility for disposing of the products at the end of their
lives by taking them back from customers and recycling them.
In particular, it is calling for the elimination of PVC (polyvinyl chloride) plastic, used as an
insulator with internal cabling, and of all brominated flame retardants, chemicals used to
laminate printed circuit boards to prevent them catching fire.

Green My Apple

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Business Ethics

When Greenpeace protesters convened outside last year's Macworld Expo, Apple CEO Steve
Jobs dismissed the environmentalists by suggesting they "get out of the computer business
[and] go save some whales."
At this year's Macworld, it was a different story. There were no protesters pounding on the
Moscone West doors. Indeed, after introducing the svelte Macbook Air on Tuesday, Jobs
took a moment to do something he's never done while introducing a new product at
Macworld: Update the audience on its environmental specs. What's more, he said he would
continue to do the same with every major product introduction in the future.
"We continue to make progress on all of these environmental fronts, and we'll keep you
posted," Jobs said. "They all add up to something in the end, and we're very conscious of
this."
Apple is the latest in an increasing list of consumer electronics and computer companies
starting to address (and mitigate) the environmental impacts of their products. Computer
manufacturers such as Dell, H.P. and Lenovo have been taking back old computers for
recycling for several years. Sony began collecting old televisions for voluntary recycling in
the United States starting in September 2007. And at the 2008 International Consumer
Electronics Show in Las Vegas last week, many manufacturers gave lip service to greening
their product lines, although few gave substantial evidence that they were actually doing that.

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Apple must begin to address these growing problems to ensure that the workers and children
of Asia and many developing nations no longer face the unnecessary environmental and
health dangers posed by the high-tech industry's waste.
Among other highlights Tuesday, Jobs cited the fact that the new Macbook Air is clad in a
fully recyclable aluminum case and stated that aluminum is one of the most recyclable
materials on the market.
Jobs also told audience members that the Macbook Air will include the company's first
mercury- and arsenic-free display and that all of the Apple-designed circuit boards -- which
are the vast majority of the circuit boards in the unit -- are free of brominated flame retardants
(BFRs) and polyvinyl chloride (PVC) plastic, two substances commonly found in consumer
electronics that critics say pose hazards to the environment and to human health.

A Greener Apple Pledge

After years of being tight-lipped about the company's environmental efforts, Apple CEO
Steve Jobs posted an 1,880 word open letter online Wednesday about the computer maker's
work to be green. Jobs cites criticism from environmental groups as his impetus to talk about
Apple's initiatives in recycling old products and removing toxic chemicals from new
products.

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Among the significant announcements:

• Jobs said that the company would transition away from the use of mercury, a toxic chemical
that's polluting oceans, in its displays. It will stop making displays with fluorescent lamps,
which contain mercury, and turn solely to the use of light-emitting diodes (LEDs) for
illumination. (All iPod displays already use LEDs for illumination.) But Jobs said that Apple
will rely on the LED industry to make that transition economically feasible.
"We plan to introduce our first Macs with LED backlight technology in 2007. Our ability to
completely eliminate fluorescent lamps in all of our displays depends on how fast the LCD
industry can transition to LED backlighting for larger displays. Apple plans to reduce and
eventually eliminate the use of mercury by transitioning to LED backlighting for all displays
when technically and economically feasible."
• Jobs said that Apple plans to completely eliminate the use of the toxic chemicals polyvinyl
(PVC)--a plastic used to make computer parts--and brominated flame retardants in its
products by the end of 2008.
"For the past several years, we have been developing alternative materials that can replace
these chemicals without compromising the safety or quality of our products...We're close to
eliminating these chemicals altogether," Jobs wrote.
(Jobs derides competitors for not committing to the elimination of these chemicals fast
enough: Dell and Lenovo won't rid them from products until 2009 and HP hasn't stated its
plans yet, Jobs wrote.)
• Jobs said that Apple has restricted use of toxic chemicals covered by the European Union's
RoHS, or Restriction of Hazardous Substances, which bars use of hazardous substances
including cadmium and hexavalent chromium. "Apple phased out these and many other
chemicals several years ago through design innovations and the use of higher quality metals
and plastics."
Jobs added: "A note of comparison--Some electronics companies, whose names you know,
still rely on RoHS exemptions and use these toxic chemicals in their products today."

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• Jobs said that Apple's 150 U.S. retail stores take back unwanted iPods free "for
environmentally friendly disposal." "This summer we're expanding it to Apple retail stores
worldwide, and we're also extending it to include free shipping from anywhere in the U.S."
Given this work and other recycling efforts, Jobs added: "By 2010, Apple may be recycling
significantly more than either Dell or HP as a percentage of past sales weight."

Removing Toxic Chemicals

Lead - Many of the dangerous chemicals we all want to eliminate from
electronic products are found in very small amounts, but there’s one
toxic substance that some companies still ship by the pound, and
that’s the lead contained in their cathode-ray tube (CRT) displays.
A typical CRT contains approximately 3 pounds (1.36 kg) of lead. In
mid-2006, Apple became the first company in the computer industry
to completely eliminate CRTs. The effect has been stunning —
our first CRT-based iMac contained 484 grams of lead; our current
third-generation LCD-based iMac contains less than 1 gram of lead.
Apple completely eliminated the use of CRTs in mid-2006.

The European Union is generally ahead of the U.S. in restricting toxic

substances in electronic products. Their latest restrictions, known as
RoHS, went into effect in July 2006. All Apple products worldwide
comply with RoHS. Our manufacturing policies had already restricted
or banned most of the chemicals covered by RoHS, and Apple
began introducing fully RoHS-compliant products a year before the
European deadline.
Almost a year later, however, some electronics companies can only
claim their products are RoHS compliant because of certain littleknown
exemptions granted by the EU. Despite the tough restric-
Lead
Cadmium
Hexavalent
Chromium
Decabromodiphenyl
Ether
tions of RoHS, these exemptions let companies ship electronics
that still contain high concentrations of two hazardous substances
— hexavalent chromium, the carcinogen against which Erin Brockovich
famously campaigned, and the brominated flame retardant
decabromodiphenyl ether (DecaBDE), which is also feared to have
adverse health effects. Apple phased out these and many other
chemicals several years ago through design innovations and the use
of higher quality metals and plastics.
Apple products met both the spirit and letter of the RoHS restrictions
on cadmium, hexavalent chromium and brominated flame retardants
years before RoHS went into effect.

Arsenic, Mercury - Arsenic and mercury are industry standard materials used in
liquid
crystal displays (LCDs). Arsenic is added during the manufacturing

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of the high performance glass used in LCDs to prevent the formation

of defects, and the fluorescent lamps used to illuminate LCDs
contain minute amounts of mercury. Apple is on track to introduce
our first displays using arsenic-free glass in 2007. A small number of
high performance integrated circuits (ICs) will continue to contain
a minute amount of arsenic as an element of the semiconductor
substrate.
To eliminate mercury in our displays, we need to transition from
fluorescent lamps to light-emitting diodes (LEDs) to illuminate the
displays. Fortunately, all iPod displays already use LEDs for illumination,
and therefore contain no mercury. We plan to introduce our
first Macs with LED backlight technology in 2007. Our ability to completely
eliminate fluorescent lamps in all of our displays depends
on how fast the LCD industry can transition to LED backlighting for
larger displays.
Apple plans to completely eliminate the use of arsenic in all of its displays
by the end of 2008.
Apple plans to reduce and eventually eliminate the use of mercury by
transitioning to LED backlighting for all displays when technically and
economically feasible.

Polyvinyl Chloride
Brominated flame
Retardants Some companies have made promises to phase out other toxic
chemicals like polyvinyl chloride (PVC), a type of plastic primarily
used in the construction industry but also found in computer parts
and cables, and brominated flame retardants, or BFRs, which reduce
the risk of fire. Apple began phasing out PVC twelve years ago and
began restricting BFRs in 2001. For the past several years, we have
been developing alternative materials that can replace these chemicals
without compromising the safety or quality of our products.
Today, we’ve successfully eliminated the largest applications of
PVC and BFRs in our products, and we’re close to eliminating these
chemicals altogether. For example, more than three million iPods
have already shipped with a BFR-free laminate on their logic boards.
Dell and Lenovo have publicly stated that they plan to eliminate the
use of PVC and BFRs in their products in 2009. Hewlett Packard has
not yet publicly stated when they will eliminate the use of PVC and
BFRs in their products, but has said that they will publish a plan by
the end of 2007 which will state when in the future they will eliminate
the use of these toxic chemicals in their products.
Apple plans to completely eliminate the use of PVC and BFRs in its products
by the end of 2008.
Recycling Our Products (E-Waste)
Apple started recycling in 1994 and today we operate recycling programs in
countries where
more than 82% of all Macs and iPods are sold. By the end of this year, that figure
will increase
to 93%. How successful are these programs?
Currently, there is no industry standard way to measure the effectiveness of a
company’s

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recycling programs. Dell has proposed a simple measure - assume a seven year
product
lifetime, and measure the percentage of the total weight you recycle each year
compared
to the total weight of what you sold seven years earlier. This makes sense to us,
and has the
added advantages of clarity and simplicity.
Apple recycled 13 million pounds of e-waste in 2006, which is equal to 9.5% of
the weight
of all products Apple sold seven years earlier. We expect this percentage to grow
to 13% in
2007, and to 20% in 2008. By 2010, we forecast recycling 19 million pounds of e-
waste per
year — nearly 30% of the product weight we sold seven years earlier.
Weight recycled as per % of past sales

RED Apple

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Apple Computer on Friday began selling a red-colored iPod Nano and $25 iTunes gift cards
under the label of Product RED -- a project created by Irish musician Bono and Bobby
Shriver that aims to raise money for the Global Fund To Fight AIDS, Tuberculosis and
Malaria by donating a portion of profits from a range of branded products -- the AP/Houston
Chronicle reports. The announcement was made on Thursday during the filming of the U.S.
launch of Product RED on the nationally syndicated "Oprah Winfrey Show" (Heher,
AP/Houston Chronicle, 10/13). American Express, Converse, Giorgio Armani and Gap were
the initial partners in the program and are distributing credit cards and selling tennis shoes,
sunglasses and T-shirts, respectively, carrying the Product RED label. The four partner
companies have committed to the brand for five years and have pledged to give an average of
40% of profits from the products to the Global Fund. London's Independent in May
announced that it would become the first media outlet to sign on as a partner in the project. In
addition, Motorola in May announced that it will partner with Product RED. According to
Global Fund Executive Director Richard Feachem, Product RED has raised more than $10
million in the U.K. from February through September. The funds generated from U.K. sales
will be allocated to HIV testing and treatment services for HIV-positive women and children
living in Rwanda and to supporting AIDS orphans in Swaziland, he said. Feachem earlier this
month announced that Product RED plans to partner with five additional corporations in the
next few weeks. Bono, Winfrey and other celebrities on Thursday shopped in downtown
Chicago in an effort to enlist consumers. According to Leslie Dance, vice president of
marketing for Motorola, celebrities ---- including Penelope Cruz, Jennifer Garner, Chris
Rock, Maria Shriver and Steven Spielberg -- will promote and represent various Product
RED goods (Kaiser Daily HIV/AIDS Report, 10/12). The Product RED iPod will sell for
$199, the same price as other versions of the product, and Apple will contribute $10 from
each sale to the Global Fund. "We've moved from the philanthropy budgets to the marketing

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Business Ethics

budgets, and guess what, there's no comparison in size," Bono said (AP/Houston Chronicle,
10/13).

Shopper notes that iPod nano (Product) RED Special Edition costs the same as other iPod
nanos. But the (RED) one generates funds to help eliminate AIDS in Africa.
Shopper buys the (Product) RED. Apple sends contribution directly to the Global Fund.
The Global Fund uses all this money to finance HIV health and community support programs
in Africa, with a focus on women and children
The contribution helps a person affected by HIV in Ghana, Swaziland, Rwanda, Lesotho and
other countries to be granted (RED) money in the future

Conclusion
If a company does not adhere to business ethics and breaks the laws, they usually end up
being fined. Many companies have broken anti-trust, ethical and environmental laws and
received fines worth millions. The problem is that the amount of money these companies are
making outweighs the fines applied. Billion dollar profits blind the companies to their lack of
business ethics, and the dollar sign wins.
A business may be a multi-million seller, but does it use good business ethics and do people
care? There are popular soft drinks and fast food restaurants that have been fined time and
time again for unethical behavior. Business ethics should eliminate exploitation, from the
sweat shop children who are making sneakers to the coffee serving staff who are being ripped
off in wages. Business ethics can be applied to everything from the trees cut down to make
the paper that a business sells to the ramifications of importing coffee from certain countries.
In the end, it may be up to the public to make sure that a company adheres to correct business
ethics. If the company is making large amounts of money, they may not wish to pay too close
attention to their ethical behavior. There are many companies that pride themselves in their
correct business ethics, but in this competitive world, they are becoming very few and far
between.

However, in this assignment we have seen how Apple has encountered the ethical dilemma of
being environmental friendly or simply dismiss the charges and continue making billions.
Apple CEO made an ethical decision of taking measures to provide a greener, safer and
efficient product and that is one of the main reasons why Apple is still going strong and
stronger over the past 33 years in business. Undisputable, business ethics do play an
important role in an organization and its business.

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