Apple Inc. (NASDAQ:AAPL) announced last week that it uncovered many violations among its suppliers and double what it had recorded from the previous year. While some issues surrounded environmental policies, others included falsifying work hours and forcing employees to pay significant fees for a job, something that the company has previously banned.
Although the issues are minimal when you consider the number of suppliers that the company works with and Apple’s large workforce, it still creates a lot of risk for the tech giant and underscores the uncertainty that is involved with running operations in other countries where controls are looser.
As much as Apple would like to have a uniform operation everywhere, it’s simply not possible, and that risk can have serious repercussions for the company. Not only will it result in variations in quality, but there’s also the danger that information gets compromised that could be valuable for competitors and those trying to take market share from the popular handheld manufacturer.
When it comes to technology, there’s not a lot that separates the big players in the industry, and any loss in competitive advantage could be detrimental to a company’s long-term growth.
However, Apple has built a strong brand and has a lot of loyalty from its customers. It would take a lot for it to get knocked from its pedestal, but that doesn’t mean the company shouldn’t take these issues lightly.
We’ve seen many companies get rocked by scandal and as investors become more focused on social and economic issues, it’s going to be harder to push issues like this under the rug.
