Ethical Actions and Accounting Judgements
Tim Cook, the current CEO of Apple, had been in leadership positions in different corporations before succeeding the late Steve Jobs as the Apple CEO. Moral credibility at a personal level is essential in fostering the leader’s impact on a formal ethical culture in an organization. Ethical actions and accounting judgments affect not only a leader’s reputation, but also the clients’ trust in an organization. Consequently, Tim Cook has had a measure of ethical actions and accounting judgments within his tenure as Apple’s CEO, after Steve Jobs.
Nevertheless, examining the causes of ethical actions and accounting judgments could be pivotal in determining the reason great organizational leaders promote or damage both personal and organizational reputation. Two events, one ethical and an accounting judgment, plagued the leadership of Tim Cook at Apple, and the outcomes had mixed implications on the CEO at a personal level, and Apple as the organization. Therefore, the two events have been vital to the rise of Tim Cook as Apple’s CEO, following the death of Steve Jobs.
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TIM COOK’S ETHICAL HISTORY AT APPLE
The genesis of Tim Cook’s ethical stance may not have started at Apple because of his previous leadership positions in different organizations. For instance, Tim Cook transformed Apple to profitability hardly one year after joining the corporation. At that time, the company was manufacturing high-end and innovative electronic devices. However, this firm was unprofitable in the market as compared to established competitors such as Samsung. With such a competition, the leader had immense pressure in to bring the company into profitability level. Taking leadership position at Apple has remained one of the century’s likable succession stories because the firm has remained both competitive and profitable on a global scale. The CEO’s leadership style brought more success than what his predecessor, Steve Jobs, achieved. The differences in moral stances between the two leaders are apparent. Tim Cook, unlike his predecessor, Steve Jobs, wanted to change the world through innovative technology by changing issues like diversity in the technology industry.
Additionally, a few leaders in his capacity in the technology industry rarely speak about climate change, gay rights, and philanthropy. Specifically, Apple under Steve Jobs had a weaker moral stance than the current leadership under Tim Cook. Today, leaving a moral legacy has become Apple’s driving force. Nevertheless, achieving an excellent ethical outlook was never a one-day event for Tim Cook. Firstly, the CEO took over the company leadership under immense pressure to deliver when Apple’s worker-conditions in foreign countries (including China) was under criticism.
Consequently, the ethical essence achieved by Tim Cook that propelled him to the current greatness, was a tough task to accomplish. The discussed leader has faced two significant controversies, which led to mixed reactions concerning his ethical stance. Firstly, the tax rates paid by Apple in the European Union were controversially low. Secondly, Apple intentionally slowed down the function of its phones to match their aging batteries. At first, the two incidences seemed to plague the reputation Cook had built in years, but he emerged more powerful and famous than ever before. The following section explains the two ethical actions, which took place under the leadership of Tim Cook.
Low Tax Rate Allegations
In 2013, Tim Cook was under mounting pressure from the U.S. government for evading tax obligations by hiding income overseas. The CEO rejected the accusations, in a 2013 Senate hearing, that Apple was bypassing the U.S. tax laws. Tim when further to provide an explanation to the Senate that Apple, among other progressive companies, was dutifully paying one of the highest tax rates to the American government. A point to note is that tax evasion allegations have been the fall of a myriad of various leaders across the world over, but Tim Cook emerged from these challenges as a stronger and lovable leader. For instance, Apple’s interests in the European Union (E.U) faced a fine of $ 14.5 billion because of the Company’s arrangement with the Irish government to pay as little as 0.005% tax rate. The order by the European Union to pay the $ 14.5 billion, followed a three-year investigation from 2013 to 2917, but Tim Cook managed to preserve his image as an excellent leader.
Notably, he issued a public statement about the E.U. order to hand over the unpaid taxes. The arrangement with the Irish government would seem an unethical action by Apple under the leadership of Tim Cook, but the company yielded to the order from the E.U. and issued a public statement about the Corporation’s responsibility to settle tax obligations. The keynote in the public report released by Tim Cook reiterated Apple’s commitment, as the most significant taxpayer in the world, to pay taxes on every dollar owed to any country. Accordingly, Tim Cook emerged as an ethical leader, contrary to the expectations of the technology industry.
The Intentional Slowing of Earlier iPhones
Apple, under Tim Cook, faced multiple lawsuits in late 2017 following the revelation that the company intentionally slowed earlier iPhones to adapt the devices to the aging batteries. In most cases, most leaders would opt to deny such actions, but Tim Cook admitted to the alleged illegal practice, but explained to the customers that the move was meant to improve the customer experience with the use of older versions of iPhones. The lawsuits claimed that Apple was deceiving customers through the software updates which slowed the performance of the affected iPhone versions. However, many customers continued to use iPhones despite the findings and the ensuing lawsuits. Prevalently, ethical actions involving customers would damage the image of corporations, but Apple’s follow-up through public apology ensured that the customers maintained their loyalty to the company.
Furthermore, the company took several steps, including the reduction in the price of replacement batteries, working towards reduced shutdowns of the affected iPhone versions, and increasing the customer control over the health of the batteries through the issuance of an iOS with improved features. Therefore, the steps ensured that Tim Cook and Apple remained the client’s most favored leader and company respectively. In light this situation, it is without a doubt that for any company to survive in the market, then it embrace moral responsibilities.
The Pone Encryption Dilemma
Tim Cook displayed resilience against the FBI’s demands to access the encrypted iPhone to one the San Bernardino shooters. The ethical dilemma was challenging before the CEO because it involved the creation of an unlocking, which would offer the FBI access to private information stored on the phone. The CEO was faced with the choice of meeting the FBI’s demands and compromising the security of iPhone data or decline the access and face the wrath of the affected families. Tim Cook chose the latter to jeopardize his moral outlook as judged by activists, but gained the loyalty of the iPhone users, through his support of the privacy of data stored on iPhones.
Conclusion
Tim Cook’s tenure at Apple has been rife with both accolades and controversies, but his reputation has remained intact. For instance, his actions came at a time when he was to balance between retaining the profitability of the company under mounting pressure following the death of Steve Jobs. Nevertheless, the world recognizes the CEO as proponent of moral, ethical decisions for the benefit of humanity.
- Biography.com Editors. Tim Cook. Biography.com. https://www.biography.com/people/tim-cook-20967297. Published September 11, 2018. Accessed November 6, 2018.
