Question 2 (20 marks)

Read the case study, Apple CEOs threats to Palm.com and answer each question related to the case drawing on facts from the case and theories of Business Ethics.

Case Study - Apple CEOs threats to Palm.com

Apples transition from a computer hardware start-up by Steve Jobs to a global consumer electronics company that has consistently delivered innovative products and exceptional shareholder value is very hard to replicate. A large part of the companys success is attributed to its employee talent pool and research capability to develop innovative products. The company enjoys an almost evangelical customer base that eagerly waits for the companys new product announcement and launches. Competitors in Silicon Valley envy Apples success and are known to have poached talented employees off Apple to help them create similar innovative products.

A recently released document suggests that in 2007 former CEO Steve Jobs allegedly threatened former CEO of Palm, Edward Colligan, with patent litigation if Palm did not cease and desist from poaching valuable Apple employees. Steve Jobs suggested that each company should respectively comply with the idea of not taking valuable employees from competitors. This unspoken agreement seems to have also applied among companies such as Adobe, Google, Intel, Intuit, and Pixar. The document came to light because of lawsuits filed by former Apple employees. Jobs firm stance on the matter was made clear to Colligan, who countered with a response that this type of collusion was highly unethical and Apples employees had the right to work at other companies. In 2010 the US Department of Justice filed an anti- trust law suit against the aforementioned companies and required them to dissolve the agreement. Current CEO Tim Cook made it clear that Jobs was the only one who had knowledge of this agreement and no other Apple employees were involved.

Case questions (all questions carry equal marks of 10 each)

a) From an employee perspective, discuss ethical aspects of an unspoken agreement between companies not to poach talented employees from one another. b) Drawing on ethical theory, analyse how similar unspoken agreements between companies in fixing prices for their products may impact customers. (WRITE 500 WORDS EACH)