Business refers as engine behind development of society and growth of economy. Today, businessmen have a great influence on society, employment, governmental policies and politics as well. They conduct a business in order to improve living standard of people and maximize value for society (Muratovski, 2015). This report is based on analysis the approaches and challenges that companies should take for conducting business in ethical manner. This would help in giving more contribution towards sustainability of society. In this regard, Apple Inc. is taken to make a justification if this company is socially responsible or not. This American multinational technology- design, develop and sells electronic product, software, hardware and online services to customers. The present assignment is going to highlight weaknesses, approaches and challenges that may impact on future growth of this company. To hold this argument, some relevant models, internal and external examples etc. is being discussed in further part also.
According to Garlord Nelson, “ The test of man's conscience reflect that his willingness to sacrifice something in present will aid to fulfill need of future generation”. In context with business organizations, in order to win competition from marketplace and and enhance growth of business, they offer products on low cost by sacrificing their profitability. It aids them to enhance base line of customers and get retention for long term sustainability.
From a view of 20thcentury, it has evaluated that today, main purpose of business organization is to maximize value for society and shareholders. For this purpose, enterprises produce high innovative products in order to satisfy desires of customers by concerning what they actually want. In emerging market of worldwide, thousand of companies are working with common motive i.e. to lift millions of human beings out of poverty. Therefore, they transform their business for upliftment of society and make investment for development as well rather than to increase sales volume. This type of transition is actually being driven by market-based activism and responsibility of companies in place of government regulation.
According to opinion of Oakley (2016), Apple Inc. which is one of the largest corporations, has made a large contribution in CSR (Corporate Social Responsibility). It includes promoting education, gender equality, women empowerment, healthcare and ensuring environmental sustainability. Under applicable items as per CSR requirement in Schedule VII, this multinational company provide disaster relief and financial assistance to reputable NGOs (Non-Governmental Organization). For example: Education to children of low income communities, this CSR activity has launched in beginning of May 2015. Under this program, Apple Inc. make collaboration with NGOs and through funding and proper resources, conduct these activities in appropriate manner (Rosenberg, 2015). It includes delivery of high quality education to poor children, addressing environmental issues and problems in local communities, enhance co-curriculum activities and more. For conducting these programs in ethical manner, this corporation is going to spend 2% of annually average net profit (Apple Corporate Social Responsibility (CSR),2018). Along with this, it also takes some major steps to ensure that any type of surpluses which are arise out from CSR activities will be set aside for further purpose. For monitoring such type of project and programs, Apple Inc. give responsibility a separately designated CSR committee which consists two board of directors. They oversee the whole process and under direction of them, other members associated with CSR programs prepare report. Further this report provides detail to relevant stakeholders so that they can review policies on periodic basis as well as update the same if necessary.
Illustration 1: Role of Apple Inc. in society development
(Role of Apple Inc. in society development, 2017)
Therefore, these type of activities reflect that in today's business environment, Apple Inc. performs its major responsibilities towards development of society. It has made a large investment in order to resolve issues at local communities and uplift standard of living of local people by installing electrification devices in rural areas.
2. Business approach of Apple Inc. in respect to sustainability
Sustainability approach refers to a development process which meets the present need of organization without compromising the future demand (Audretsch, 2014). In terms of business, it can be defined as managing three aspects of company that are- a process to manage social, environmental and financial risk; opportunities and obligations. Sustainability assist a firm to adhere business laws and policies with principles of sustainable development. Along with this, for industrial development to be sustainable, it is necessary for enterprises to address major issues like economical efficiency (prosperity, productivity and innovation), environmental accountability (biodiversity, climatic change, usage of resources) and social equity (human rights, poverty, community).
Today in modern world, more than 90% owners of companies state that sustainability is essential for success of business. To attain this success, they develop effective sustainable strategies, products and services as well as publish sustainability reports for stakeholders and public. For changing the way of conducting business, it is essential for a company to address the challenges related to environmental degradation. Market is considered as the most powerful institution on earth and business as an entity within it. Therefore, sustainability in business represents a market shift. Any changes in code of conducting a business will affect society and environment surround them (Veblen, 2017). So, it seems that sustainability is like business threat in which changes in market expectations and technological advancement, will arise opportunity for one company and challenges for others. For example: When a company apply sustainability pressure on business then it becomes an issue for risk management. Similarly, when financial institution apply the same then sustainability arise problems for capital acquisition.
In context with Apple Inc., it strive to serve products which are best from other telecom and software companies. The current business approach of this firm is its continual progress towards priorities of environment. For example- Powering all facilities of Apple with 100% renewable energy. It includes offices, data centres and retail stores etc. are all powered by clean and green energy. This company focuses more on reducing emission of greenhouse gases like Nitrous Oxide, Chlorofluorocarbons (CFCs), Hydrofluorocarbons and more, which contribute to exert pressure on climatic condition. Along with this, Apple Inc. making great progress in measuring and minimising carbon footprint in manufacturing process. For all these processes, this corporation makes investment on developing own solar, wind, water and biogas fuel projects. As per survey, from 2011 to till, this company has gained success to reduce emission of carbon gases and prevent earth from such harmful gases which consists near about 2.1 million metric tonnes of CO2. Moreover, in 2017 it also analysed that due to continual progression, this firm has got success in reducing approximate 590,000 metric tonnes of CO2 gas (Producing renewable energy to meet our own needs. 2018).
To create sustainability in business with development of environment and society, Apple Inc. design products of each generation as energy efficient as possible. As energy is used more in process of turning raw materials into finished products (Berry and Wilcox, 2018). It uses lower-carbon materials in manufacturing process and build a partnership with suppliers to help them in reducing amount of energy they use. Corporation of this company with its suppliers, help in transforming manufacturing process into dramatically reduce emissions of harmful gases. It includes process of finding ways to minimise consumption of energy like replacing inefficient cooling, heating and lightening system, recovering waste heat and recovering compressed air leaks. Along with this, to spur the procurement and development of renewable energy, efforts of Apple Inc. go beyond energy efficiencies. It invest in other projects also which are related to renewable energy for addressing upstream emissions. For this purpose, recently Apple has installed 485 Megawatt of solar and wind projects to help suppliers to develop their own project model. It helps in reducing consumption of energy and minimise carbon footprint from industries.
Illustration 2: Reduction in Co2 gases
(Source:Reduction in Co2 gases, 2018)
As per this graph, it has evaluated that emission of Co2 gas per product of Apple has been consistently reducing during last five years. Along with this, in 2016, it offers near about 550 electric vehicles to employees. It helps in encouraging others to use such vehicles so that consumption of petrol can be reduced.
Apple's main mission is to change the world and protect nature from harmful effects so, it design products accordingly. As per concern with 11thannual Environmental Responsibility Report, products of Apple Inc. are much innovative and doesn't effect environment much from harmful radiations. This report highlights what Apple has made contribution in sustainability of environment (Chen and et. al., 2014). Yet challenges are more complex, but philosophy under the same is simple i.e. apply innovation in products which bring efficiencies. This company focus on three main priorities that are-
- Climate-change: Reduce impact of production process of business on climate change. For this purpose, Apple use renewable energy source and drive energy efficiencies in products.
- Resource: Protect and conserve precious resources for future use.
- Safer materials: Use safer materials in manufacturing process and product.
Therefore, it has analysed that products of Apple are highly innovative and creative. Along with this, programs run by Apply Inc. reflect that this company contributes an important role in developing sustainability in business and market as well. In context with sustainable development at society, this company run various CSR programs and initiatives. In 2011, this enterprise has run a 'Global Volunteer Program' for encouraging its workers to volunteer in local communities. For this process, it has donated more that 78 billion USD to charities and non-profit organisation (Apple SWOT Analysis,2018). Moreover, Apple has also run waste reduction and recycling program in near about all countries where it operate business. In 2015, approx. 99% of products of this company are packaged with recycled paper. This company also works with near about 160 organisations around the world in order to collect e-waste products.
Apple Inc. has planted near about 9000 drought-tolerant trees in areas of Cupertino. Moreover, in 2017, this company has donated 1 million USD to Southern California Wildfire Recovery Efforts. Therefore, all these reports states that for bringing sustainability in business, Apple Inc. concern on environmental and society development also.
3. Critically evaluation on weaknesses, challenges and approaches which may impact on future growth of Apple Inc.
According to Audretsch (2014),Today business environment of organization has become more dynamic, where changes are done in working system on continual basis. The reason behind this is just to win competition at marketplace and retain customers with products or services. For this purpose, company concern more on bringing innovation in products and make them more beneficial for customers. In context with Apple, which is a multinational corporation, famous for its highly innovative products. This firm offers a wide range of iPhone series at marketplace which fulfill high satisfaction of customers (Lawrence and Weber, 2014). It has made life of people more easy and comfortable. But apart from all these, to become the world's biggest IT company, Apple faces a lot of issues and problems also. It may create a large impact on future growth and profitability of this company. As per basis of internal analysis, it has evaluated that this enterprise use a strong strategy for promoting business. For this process, it uses direct sales channels instead of online procedures. But due to availability of stores or direct sale locations in 13 countries only, this firm face less sales performance also. Moreover, other weak point of this company is its dependency on iPod and iPhone which contribute a major proportion in sales performance. Along with this, its other hardware products like Apple Watch, HomePod, AirPods and more, are only supported with iOS. So, it brings difficulty for customers to use where products of other companies are android. Furthermore, services and products of Apple Inc. are much expensive therefore, it is far behind purchasing power of ordinary man. So, it also shows major weakness of this company in terms of bringing profitability in business.
Illustration 3: Sales volume of products of Apple Inc.
(Source: Sales volume of products of Apple Inc., 2017)
Along with above weaknesses, there are many factors present at business environment which give challenges to Apple for further expansion. It includes aggressive competition, imitation, rising labor cost and ethical consideration in business. According to Bendell (2017), demand of sustainability and development of society, assist this company to concern more on environmental issues while developing products. Therefore, Apple focuses on using green and clear energy in manufacturing process in order to protect ecosystem from harmful radiations. Apart from this, another factor which creates a challenge for present company is presence of competitors. In this regard, companies like Samsung, VIVO, Sony and so on, produce much innovative products to customers. These firms offer a large variety of commodities like smart android phones, tablets, music system and more, on much less price. So, it helps them to avail large market share and enhance sales volume. Thus, to face this challenge, Apple needs to adopt effective marketing strategies for maintaining and giving a tough competition to others. Further, threat of imitation is also a major factor which impact on sales volume of this corporation. As products of Apple are innovative and high in demand so, to gain competition over it, rival companies imitate the design and features. They also offer imitate products on much low cost to customers having less purchasing power.As shown in illustrated figure- A comparison of products of Apple with one of its rivalry Mac is made. It states that average sale price of iPhone and iPod products are more than USD 400 in last years from 2012 to 2017. While in place of this, selling price of Mac products are more i.e. near about USD 1150 in same period. In addition to this, iPhone X is considered as one of the most expensive handset so, it is beyond purchasing power of common people. Customers who are technological lovers or belong to high status, only buy such type of products. Apart from this, mentioned graph also shows dependency of Apple on single product range. It reflects that series of iPhone is accounted as majority of total sales for this company (Sigurjonsson, Vaiman and Arnardottir, 2014). Therefore, this situation of Apple can be assessed as one of the major weakness due to decline in product life-cycle. So, this condition is going to create a negative implication on future growth and competitiveness of Apple.
Sales performance of Apple vs. Samsung customers having less purchasing power.
(Source: Sales performance of Apple vs. Samsung, 2015)
From this illustration, it has shown that products of Samsung give a tough competition to Apple. Therefore, this company requires to pay an attention and develop strategies by which it can face challenge and grab high attention of customers (Goodman, Bamford and Saynor, 2016). Other than this, because of rising competition, Apple also faces heavy employee turnover. As competitor firms offer workers more salaries and accommodations in order to get their contribution in business success. So, it also assist this enterprise to give benefits to employees so that retention of them can be gained for long profitability. Rising labor cost is another threat which involves contract manufacturers, for Apple. So, it reduces profit margin as well as push selling price of products more higher.
In terms of approaches, development of new product lines, higher sales volume on the basis of rising demand and expansion of distribution network etc. are some opportunities for Apple Inc. It helps this firm in coping up from weaknesses as discussed in above parts. As per views of Urry (2016),it is evaluated that Apple has lack of distribution network therefore, this company needs to create modification. It will help in enhancing and improving sales volume as well as expand business at global level. By expanding distribution network, Apple can offer its products in global market and attract more customers. Moreover, through aggressive marketing, this company gains opportunity to enhance its sales performance. This kind of approach is directly linked with rising demand of people for mobile products and accessories. Along with this, present firm also has chance to explore its products lines through which dependency on single commodity can be reduced. Apple Smart Watch, iTunes media player, HomePod and more, are some illustrations of innovation and creativity of Apple. It support this corporation to expand business in international market and gain more profitability. Thus, all these approaches indicated that there are many opportunities present at marketplace, by which Apple can achieve high growth in business.
4. Relevant Models/Theories
As from above mentioned arguments, it has interpreted that concept of CSR activities and sustainability are related with each other. Therefore, Apple has made a large contribution in development of society (Ward, 2016). Any innovation in its products convey that this firm majorly concern on ethical and environmental issues and bring creativity in production accordingly. There are various approaches of CSR are available which integrate corporate activity into business model of organization. In this regard, business of Apple ensures its adherence to ethical standards, law and international social norms. All these processes shows continual commitment of businesses to give contribution in sustainable economic, environmental and society development (CSR in Apple Inc.,2017). Along with this, they behave ethically while uplifting quality of life of workers, their family ones and local communities. Thus, in context with Apple, this company has given commitment to-
- Support technological development which helps in measuring social changes. As technology aids in fighting with diseases, improving education, distributing food, enhance living standard of local communities and more. So, all these things shows that Apple is a leader in this era.
- Give support dissemination of credible and worldwide information related to social concern. For example- innovation of iTunes is considered as world's important source for social programs.
- Provide support to innovative design as Apple applies to products for social change. It uses green and clear energy to manufacture products for developing sustainability. For example- It promotes electronic vehicles as alternative for those transportation which consumes much fuel.
Apart from these, conducting business by considering ethical standards, prevent environment from pollution, contribution towards development of social health and education etc., shows responsibilities of Apple towards society. Furthermore, adhere business with regulatory laws and legislations, regular payment of taxes, give cooperation to Government for improving economical condition and more, prove that Apple has performed its legal duties also. This company also perform its major duties towards employees by giving them healthy and safe working environment, fair wages and welfare services, training and development facilities, etc. All are these some illustrations that prove that Apple is a market leader which concern more on enhancing quality of life of people and developing societies.
CSR Carroll Model:-
According to A Carroll (1991), this model consists a range of models and theories which summarised into four type of social obligations (Laszlo and Cescau, 2017). It includes economic, legal, ethical and philanthropic responsibilities. In this regard, first and foremost duty of a company is to perform philanthropic duties i.e. corporations should contribute their role in improving quality of life and developing societies. It will lead to accomplish a ultimate goal of being a good citizen. Ethical responsibilities is another norms where people expected from companies to conduct business in ethical manner and avoid harm. Similarly, in same context, legal obligations is the third thing, which assists organizations to obey laws of environment, society and government. The last but not least is economical responsibilities, it states main responsibility of entities. This factor assists a company to satisfy needs of society, stakeholders and investors for further expansion of business.
Illustration 5: Carroll Model of CSR
(Source: Carroll Model of CSR, 2017)
In context with Apple Inc., it has been argued that this corporation have performed major duties towards development of society. It has also taken entire responsibilities related to provide benefits to employees, stakeholders, investors and communities (Crane and Matten, 2016). The main reason for conducting CSR activities by this company is its mission statement, 'To prevent environment and reduce carbon footprints by using green energy in production'. Apple Inc. concern more on protecting human rights and global communities instead of pursuing profitability. The three main aspects that prove that this corporation has invested a lot for sustainable development are- Company's code of conduct, it supplies responsibility progress report and online report with respect to CSR activities. In this regard, code of conduct of Apple Inc. deals with corporate governance, environmental health and safety, information disclosure and more. The Apple Supplier Responsibility i.e. SRP progress report shows audit result of human and labour rights, ethics, management system, worker health and safety etc. This company also assists its suppliers to provide safe and healthy working environment to workers and treat them with respect and dignity. It has provided proper training to employees so that they can understand their responsibilities towards manufacturing process.
Along with this, different approaches used by Apple Inc. to overcome from its weaknesses also entails that this company has performed its business in profitability manner. Therefore, commitment to contribute some part of its profitability and revenues in development of society can be easily fulfilled. It has faced various challenges to run CSR activities and business in ethical manner. But apart from this, it has gained success to overcome from these difficulties and help in preventing nature from harmful effects of manufacturing process.
From this project it has recommended to all corporations to pay a huge attention on societal and environmental issues. They must operate business in ethical manner by concerning on those factors which may harm nature and ecosystem. They have to adopt measures by which any activity of their business could not impact on sustainability of marketplace. As it has evaluated that Apple Inc. has concerned a lot on improving living standard of local communities by conducting various CSR activities. But still, this company is required to perform in consistent manner with expectation of societal, governmental and ethical norms. Its managers and workers are required to actively participate in voluntary and charitable activities within local communities. These activities are related to enhance quality of life. Apple is required to make contribution in other field also by which development of society can be achieved. It includes investment in government and private project for education related programs; women empowerment and upliftment of societies. Along with this, Apple should concern on creating diversification in products also. It needs to manufacture some more innovative products and adopt high distribution channels. It will help in grabbing attention of more customers and enhancing sales volume as well.
It has concluded from this mentioned project that today every business entities concern on developing societies. They have made a large contribution in development of society. They also use measures by which ecosystem can be prevented from harmful effects of manufacturing products. This report shows various activities like CSR programs that are conducted by companies in order to uplift local communities and improve quality of life. Along with this, different kind of procedures by which a company can face major challenges like how to compete with rivalries, way to overcome from weaknesses and opportunities for enhancing future growth of business are also explained in further parts of this assignment. So, it is necessary for organizations to obey such recommendation for enhancing profitability and revenues. It helps them in giving more contribution towards enhancement of society and sustainable development.
Books and Journals
- Audretsch, D. B., 2014. From the entrepreneurial university to the university for the entrepreneurial society. The Journal of Technology Transfer. 39(3). pp.313-321.
- Bendell, J., 2017. Terms for endearment: Business, NGOs and sustainable development. Routledge.
- Berry, J. M. and Wilcox, C., 2018. The interest group society. Routledge.
- Chen, Y., and et. al., 2014. IT capability and organizational performance: the roles of business process agility and environmental factors. European Journal of Information Systems. 23(3). pp.326-342.
- Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
- Goodman, E., Bamford, J. and Saynor, P., 2016. Small firms and industrial districts in Italy. Routledge.
- Laszlo, C. and Cescau, P., 2017. Sustainable value: How the world's leading companies are doing well by doing good. Routledge.
- Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.
- Muratovski, G., 2015. Paradigm shift: Report on the new role of design in business and society. She Ji: The Journal of Design, Economics, and Innovation. 1(2). pp.118-139.
- Oakley, A., 2016. Sex, gender and society. Routledge.
- Rosenberg, M., 2015. Society and the adolescent self-image. Princeton university press.
- Sigurjonsson, T. O., Vaiman, V. and Arnardottir, A. A., 2014. The role of business schools in ethics education in Iceland: The managers’ perspective. Journal of Business Ethics. 122(1). pp.25-38.
- Urry, J., 2016. Mobilities: new perspectives on transport and society. Routledge.
- Veblen, T., 2017. Absentee Ownership: Business Enterprise in Recent Times-The Case of America. Routledge.
- Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.