Apple

Question 1

What is the background of Apple?

Answer 1

• 98,000 full time employees
• The market is mainly in developed countries

Question 2

Where is Apple located / Spatial organisation?

Answer 2

• US company based in Silicon Valley California (R&D)
• European HQ in Cork, Ireland where it employs 4,000 workers for tax
• Products made in Shenzhen, China by Foxconn (Taiwan TNC) with 80,000 workers
• Cheap outsourcing to Foxconn used to exploit workers and increase profits
• Laws and regulations are less strict in USA

Question 3

What are the tax practices in Apple?

Answer 3

• Apple was accused of corporate tax avoidance
• In 2014, US Senate and EU commission accused Apple had favourable tax rates and owed them tax on profits

Question 4

Why is Apple’ production in China?

Answer 4

• Large source of highly skilled workers, low paid workers. Good for China for investment and generates jobs
• Forces production costs down making profit for Apple
• Shenzhen in China is a special economic zone (SEZ), attracting foreign firms
• Over 400,000 workers exployed in Foxconn. Wages are US $150 - 200 per month which is higher than average

Question 5

What is operations like in Ireland?

Answer 5

• Apple’s European HQ in Hollyhill
• Produce in Ireland with a 12.5% corporation tax (second lowest in EU)
• Apple was accused on tax avoidance

Question 6

What are some positive impacts in Ireland?

Answer 6

• Employs 4,000 workers, leading to the multiplier effect and attract firms
• 2,500 jobs for workers
• Attract highly skilled workforce with education

Question 7

What are some negative impacts in Ireland?

Answer 7

• Highly skilled workers are foreigners instead of locals

Question 8

What are some negative impacts in China?

Answer 8

• Working conditions - In 2006, 200,000 workers lived and worked in Shenzhen worked for 60 hours per week for $100 per month (sweatshop conditions)
• Health and safety - In 2010, 50 workers in Foxconn were poisoned by toxic chemicals
• Student and child labour - Foxconn used students for a low-cost and flexible workforce. Employed under 18s in poor working conditions

Question 9

What are some environmental impacts in Apple?

Answer 9

• Apple relied on non-renewable resources
• Since the ‘Green my Apple’ campaign, they use 75% renewable energy, investing in solar energy
• Removed toxic chemicals
• Apple promotes recycling

Question 10

What are overall positives for Apple?

Answer 10

• Creates employment
• Helps China grow
• Respond to child labour (willing to change)

Question 11

What are impacts of a globalised company?

Answer 11

• Apple accused of corporate tax avoidance. As a TNC, Apple can use subsidiary firms in other countries to declare profits and pay a lower tax rate
• In 2014, Both the US and EU claimed Apple had received favourable treatment on tax from the Irish government, which was denied. EU and US claimed Apple owed them tax on profits
• Globalisation in Apple is neither positive or negative. Apple provides jobs and has helped China grow and develop. But at the cost of the workforce
• TNC’s such as Apple,has shown willingness to respond and change to criticism of labour practice and enviornmental impact (positive)

Question 12

What is race to the bottom?

Answer 12

companies which are looking for the weakest laws and legislation in poorer countries- in order to maximise profits

Question 13

What is brain drain?

Answer 13

A situation where large numbers of educated and skilled people leave their country to live in another country to earn more

Question 14

What is footloose?

Answer 14

Companies are located anywhere due to technology