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A case solution (apple goes global)

Chapter · November 2021

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A case solution (apple goes global)

COURSE NAME: Organizational Behavior and

Leadership Development
COURSE CODE: MGT-402
CHAPTER: 1(Case solution)

Prepared by:
Name: Sourav Miha

ID NO: 201-14-943

PROGRAM: MBA (Major in Finance)

Daffodil International University

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 Case 01- Organizational Behavior
It wasn’t long ago that products from Apple, perhaps the most recognizable name in
electronics manufacturing around the world, were made entirely in America. This is not so
anymore. Now, almost all of the approximately 70 million iPhones, 30 million iPads, and
59 million other Apple products sold yearly are manufactured overseas. This change
represents more than 20,000 jobs directly lost by U.S. workers, not to mention more than
700,000 other jobs and business given to foreign companies in Asia, Europe, and
elsewhere. The loss is not temporary. As the late Steven P. Jobs, Apple’s iconic co-founder,
told President Obama, “Those jobs aren’t coming back.”

At first glance, the transfer of jobs from one workforce to another would seem to hinge on
a difference in wages, but Apple shows this is an oversimplification. In fact, paying U.S.
wages would add only $65 to each iPhone’s expense, while Apple’s profits average
hundreds of dollars per phone. Rather, and of more concern, Apple’s leaders believe the
intrinsic characteristics of the labor force available to them in China—which they identify
as flexibility, diligence, and industrial skills—are superior to those of the U.S. labor force.
Apple executives tell stories of shorter lead times and faster manufacturing processes in
China that are becoming the stuff of company legend. “The speed and flexibility is
breathtaking,” one executive said. “There’s no American plant that can match that.”
Another said, “We shouldn’t be criticized for using Chinese workers. The U.S. has stopped
producing people with the skills we need.”

Because Apple is one of the most imitated companies in the world, this perception of an
overseas advantage might suggest that the U.S. workforce needs to be better led, better
trained, more effectively managed, and more motivated to be proactive and flexible. If U.S.
and Western European workers are less motivated and less adaptable, it’s hard to imagine
that does not spell trouble for the future of the American workforce. Perhaps, though,
Apple’s switch from “100% Made in the U.S.A.” to “10% made in the U.S.A.” represents
the natural growth pattern of a company going global. At this point, the iPhone is largely
designed in the United States (where Apple has 43,000 employees), parts are made in South
Korea, Taiwan, Singapore, Malaysia, Japan, Europe and elsewhere, and products are
assembled in China. The future of at least 247 suppliers worldwide depends on Apple’s
approximately $30.1 billion in orders per quarter. And we can’t forget that Apple posted
$16.1 billion in revenue from the first quarter of 2014, perhaps in part because its
manufacturing in China builds support for the brand there.

As makers of some of the most cutting-edge, revered products in the electronics

marketplace, perhaps Apple serves not as a failure of one country to hold onto a company
completely, but as one of the best examples of global ingenuity.

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Question 01: 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 is one of the most powerful and dominated company running in the world.
Like U.S.A, china, U.S and others country. At first, Apple Company is running their business in
America or USA. But at the time company transfer of jobs from one workforce to another would
seem to hinge on a difference in low wages, Apple Company shows this is an oversimplification.
In fact, paying U.S wages would add only $65 to each iPhone expense, while apples profits average
hundreds of dollars per year phone. Apple’s leaders believe the intrinsic characteristics of the labor
force available to them in china- which they identify as flexibility, diligence and industrial skills
are superior to those of the U.S labor force. Apple executives tell stories of shorter lead times and
faster manufacturing process in china or globally compare to the home country or U.S. so, the U.S
has stopped producing people with the skills need.
Pros or Advantage for local and overseas labor forces of apple’s going global-

- Cheaper labor market.

- Flexibility and time management.
- Specialization in different industries.
- Valued products in the electronics marketplace.
- Apple serves not as a failure of one country to hold onto a company completely.
- Superior reliability, flexibility, diligence, and industrial skills.
- Shorter lead times and faster manufacturing processes in China or Asia country.
- More motivated to be proactive and flexible.
- Lower the labor cost and available resources and capabilities to production.
- Boosted in their economy.
- Overseas workforce to get more opportunities.
- Led to Reduction of the unemployment rate.
Cons or Disadvantage for local and overseas labor forces of apple’s going global-

- The increase of logistics and supply chain management.

- Difficulty of overseeing the production line and product mix.
- Problem in showing advertising.
- Cannot perfectly marketing and sales product in foreign market.
- Restrictions on the foreign country rules and regulation.
- Higher taxes, VAT, fees including the products prices.
- Controlling many different suppliers geographically.
- Controlling work ethics that might hurt the corporation images in different manufacturing
business in Asia.

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 - Local workforce were that the unemployment rate increased.
- Led to the increase to pressure to train more workforce.

The potential relationships between the two countries may get spoiled because one country is
getting an advantage because of the local country.
The potential political implications relationships between two countries will get spoiled. Because
foreign or global country must be paid in the higher taxes, tariffs, duty frees, import and export
quotas, currency problem, antidumping rules, administrative policy which are created spoiled
relationship between two countries. Political factors can create restrictions and barrier to
operating, marketing, producing the products. When a country operating their business in another
foreign country, it must be follow the foreign country rules and regulation, maintain country
political factors or issues, processing or operating their business in law. But both country
political relationship will get destroyed for global business.

Question 02: Do you think apple is justified in drawing the

observation’s and conclusions expressed in the case? Why or why
not? Do you think it is good or harmful to the company that its
executives have voiced these options?
Answer: yes. I think is apple is justified in drawing the observation’s and conclusions
expressed in the case, because they made the decision to move production overseas and get many
benefits like better flexibility, better time management and better skilled knowledge. I think apple
did justify in drawing the observation’s and conclusions expressed in the case, as they mentioned
in the case moving production overseas was beneficial for them for many reasons:

 Better margins and gross profits by the reducing the cost of goods sold.
 Better or more flexibility and time management.
 Better specialization in the workforce.
 Better industrial skills.
 Lower labor cost in the market.
 Available resources and capabilities to production.
This is a multibillion-dollar business that needs to be in the most efficient way possible, moving
production overseas lead to benefits for the company- workers who are more motivated at a lower
cost for the company. It is a good thing that the executive voiced these options, so everyone has a
better understanding as to why products are produced overseas.

It is very good for company that its executives have voiced these options because this way they
can educate their customer or why they produce overseas and not in their home country. It is
absolutely in the benefit of the company that its employees have voiced their opinion, this shows

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the firm belief of its employees in the company strategies. Being residents from the same country,
if the employees are thinking for the benefits of the company, then this is a sign of healthy
employee- employer relationships.

So I think apple is justified in drawing the observation’s and conclusions expressed in the case.
Because Apple is one of the most imitated companies in the world, this perception of an overseas
advantage might suggest that the U.S. workforce needs to be better led, better trained, more
effectively managed, and more motivated to be proactive and flexible. If U.S. and Western
European workers are less motivated and less adaptable, it’s hard to imagine that does not spell
trouble for the future of the American workforce.

Question 03: How could managers use increased worker flexibility

and diligence to increase the competitiveness of their manufacturing
sites? What would you recommend?
Answer:
Managers can increase flexibility and diligence of workers in the workplace to increase the
competitiveness of the manufacturing facility by promoting flexibility of company, changing and
implementing the organization policy and system. Company can create internal or external
communication, effective leadership, manager’s role and skills by flexibility and diligence.
Diligence can improve and increase the efficiency and effectiveness to increase the
competitiveness of their manufacturing sites. A competitive advantage built in the low cost and
product differentiation of the organization. Product mix, rewards, motivation of employees, group
or team performance can flexible any company to increase the competitiveness of their
manufacturing sites.
I would recommend managers take out the time to properly train their employees. I think a lot of
companies lack in this area and end up leading to the problems that lead to apple going global.

Another recommendation I would have is to create timeline and schedule for the emplyees.it
should be flexible and allow for some adjusting that won’t hurt the manufacturer. Managers can
increase the talent of the new employees in many ways. New employees are more flexible and
diligent as compared to the employees of the local country, so the company may use their services
more effectively.

The transfer of jobs from one workforce to another would seem to hinge on a difference in wages,
but Apple shows this is an oversimplification. In fact, paying U.S. wages would add only $65 to
each iPhone’s expense, while Apple’s profits average hundreds of dollars per phone. Rather, and
of more concern, Apple’s leaders believe the intrinsic characteristics of the labor force available
to them in China—which they identify as flexibility, diligence, and industrial skills—are superior

5|Page
 to those of the U.S. labor force. Apple executives tell stories of shorter lead times and faster
manufacturing processes in China that are becoming the stuff of company legend. “The speed and
flexibility is breathtaking,” one executive said. “There’s no American plant that can match that.”
Another said, “We shouldn’t be criticized for using Chinese workers. The U.S. has stopped
producing people with the skills we need.”

6|Page

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