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Role Of Business In Society

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Introduction

Business refers to the engine behind the development of society and the growth of the economy. Today, businessmen have a great influence on society, employment, governmental policies and politics as well. They conduct business in order to improve the living standards of people and maximize value for society (Muratovski, 2015). This report is based on an analysis of the approaches and challenges that companies should take to conduct business in an ethical manner. This would help in giving more contribution towards the 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- designs, develops and sells electronic products, 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 the further part also.

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1. Analysis

According to Gaylord Nelson, “ The test of man's conscience reflects that his willingness to sacrifice something in present will aid to fulfil the need of future generation”. In context with business organizations, in order to win the competition from the marketplace and enhance the growth of the business, they offer products at low cost by sacrificing their profitability. It aids them in enhancing the line of customers and getting retention for long-term sustainability.

From a view of the 20th century, it has been evaluated that today, the main purpose of business organizations is to maximize value for society and shareholders. For this purpose, enterprises produce high innovative products in order to satisfy the desires of customers by concerning what they actually want. In emerging markets worldwide, thousands of companies are working with a common motive i.e. to lift millions of human beings out of poverty. Therefore, they transform their business for the upliftment of society and make investments for development as well rather than to increase sales volume. This type of transition is actually being driven by market-based activism and the responsibility of companies in place of government regulation.

According to the opinion of Oakley (2016), Apple Inc. which is one of the largest corporations, has made a large contribution to CSR (Corporate Social Responsibility). It includes promoting education, gender equality, women empowerment, healthcare and ensuring environmental sustainability. Under applicable items as per CSR requirements in Schedule VII, this multinational company provide disaster relief and financial assistance to reputable NGOs (Non-Governmental Organizations). For example: Education to children of low-income communities, this CSR activity was launched at the beginning of May 2015. Under this program, Apple Inc. collaborates with NGOs and through funding and proper resources, conducts these activities in an appropriate manner (Rosenberg, 2015). It includes the delivery of high-quality education to poor children, addressing environmental issues and problems in local communities, enhancing co-curriculum activities and more. To conduct these programs in ethical manner, this corporation is going to spend 2% of the annual 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 that arise from CSR activities will be set aside for further purposes. For monitoring such types of projects and programs, Apple Inc. give responsibility a separately designated CSR committee which consists of two boards of directors. They oversee the whole process and under the direction of, other members associated with CSR programs prepare reports. Further this report provides detail to relevant stakeholders so that they can review policies on a periodic basis as well as update the same if necessary.

Role of Apple Inc. in society development

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 the development of society. It has made a large investment in order to resolve issues at local communities and uplift the standard of living of local people by installing electrification devices in rural areas.

2. Business approach of Apple Inc. concerning sustainability

The sustainability approach refers to a development process which meets the present needs of the organization without compromising the future demand (Audretsch, 2014). In terms of business, it can be defined as managing three aspects of the company that are- a process to manage social, environmental and financial risk; opportunities and obligations. Sustainability assists a firm in 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 economic efficiency (prosperity, productivity and innovation), environmental accountability (biodiversity, climatic change, usage of resources) and social equity (human rights, poverty, community).

Today in the modern world, more than 90% of owners of companies state that sustainability is essential for the success of the business. To attain this success, they develop effective sustainable strategies, products and services as well as publish sustainability reports for stakeholders and the public. For changing the way of conducting business, it is essential for a company to address the challenges related to environmental degradation. The market is considered as the most powerful institution on earth and business is an entity within it. Therefore, sustainability in business represents a market shift. Any changes in the code of conducting a business will affect society and the environment surrounding them (Veblen, 2017). So, it seems that sustainability is like a business threat in which changes in market expectations and technological advancement, will raise opportunities 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 institutions apply the same then sustainability arise problems for capital acquisition.

In context Apple Inc., it strives to serve products which are better than other telecom and software companies. The current business approach of this firm is its continual progress towards priorities of the environment. For example- Powering all facilities of Apple with 100% renewable energy. It includes offices, data centres retail stores etc. are all powered by clean and green energy. This company focuses more on reducing the emission of greenhouse gases like Nitrous Oxide, Chlorofluorocarbons (CFCs), Hydrofluorocarbons and more, which contribute to exerting pressure on climatic conditions. Along with this, Apple Inc. making great progress in measuring and minimising carbon footprint in the manufacturing process. For all these processes, this corporation makes investments on developing own solar, wind, water and biogas fuel projects. As per the survey, from 2011 to till, this company has gained success in reducing the emission of carbon gases and preventing Earth from such harmful gases which consist of about 2.1 million metric tonnes of CO2. Moreover, in 2017 it also analysed that due to continual progression, this firm has had success in reducing approximately 590,000 metric tonnes of CO2 gas (Producing renewable energy to meet our own needs. 2018).

To create sustainability in business with the development of the environment and society, Apple Inc. designs products of each generation as energy-efficient as possible. Energy is used more in the process of turning raw materials into finished products (Berry and Wilcox, 2018). It uses lower-carbon materials in the manufacturing process and builds a partnership with suppliers to help them reduce the amount of energy they use. The corporation of this company with its suppliers, help in transforming the manufacturing process to dramatically reduce emissions of harmful gases. It includes the process of finding ways to minimise consumption of energy like replacing inefficient cooling, heating and lightening systems, 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 invests 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 models. It helps in reducing the consumption of energy and minimises the carbon footprint of industries.

Reduction in Co2 gases

Illustration 2: Reduction in Co2 gases

(Source:Reduction in Co2 gases, 2018)

This graph, it has evaluated that emission of Co2 gas per product of Apple has been consistently reducing during the last five years. Along with this, in 2016, it offered 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 designs products accordingly. As per concern with the 11th Annual Environmental Responsibility Report, the products of Apple Inc. are very innovative and don't affect the environment much from harmful radiation. This report highlights that Apple has made a contribution in the sustainability of the 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:-

  • Climate-change: Reduce the impact of the production process of business on climate change. For this purpose, Apple uses renewable energy sources and drive energy efficiencies in products.
  • Resource: Protect and conserve precious resources for future use.
  • Safer materials: Use safer materials in manufacturing processes and products.

Therefore, it has been 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 ran a 'Global Volunteer Program' to encourage its workers to volunteer in local communities. For this process, it has donated more than 78 billion USD to charities and non-profit organisations (Apple SWOT Analysis,2018). Moreover, Apple has also run a waste reduction and recycling program in nearly all countries where it operates business. In 2015, approx. 99% of the 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 donated 1 million USD to Southern California Wildfire Recovery Efforts. Therefore, all these reports state that to bring sustainability in business, Apple Inc. concerned on environmental and societal development.

3. Critically evaluate weaknesses, challenges and approaches which may impact on future growth of Apple Inc.

According to Audretsch (2014), Today's business environment of organizations has become more dynamic, where changes are done in the working system on a continual basis. The reason behind this is just to win competition in the marketplace and retain customers with products or services. For this purpose, company concern more on bringing innovation in products and making 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 the marketplace which fulfils the 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 the future growth and profitability of this company. As per the basis of internal analysis, it has been evaluated that this enterprise use a strong strategy for promoting business. For this process, it uses direct sales channels instead of online procedures. However, due to the availability of stores or direct sale locations in 13 countries only, this firm has faceless sales performance also. Moreover, another weak point of this company is its dependency on the 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 becomes difficult for customers to use where products of other companies are Android. Furthermore, the services and products of Apple Inc. are much more expensive therefore, it is far behind the purchasing power of ordinary men. So, it also shows the major weakness of this company in terms of bringing profitability in business.

Sales volume of products of Apple Inc.

Illustration 3: Sales volume of products of Apple Inc.

(Source: Sales volume of products of Apple Inc., 2017)

Along with the above weaknesses, there are many factors present in the business environment which pose challenges to Apple for further expansion. It includes aggressive competition, imitation, rising labour costs and ethical considerations in business. According to Bendell (2017), the demand for sustainability and development of society assists this company to be more focused on environmental issues while developing products. Therefore, Apple focuses on using green and clean energy in the manufacturing process in order to protect the ecosystem from harmful radiation. Apart from this, another factor which creates a challenge for the present company is the presence of competitors. In this regard, companies like Samsung, VIVO, Sony and so on, produce many innovative products for customers. These firms offer a large variety of commodities like smart Android phones, tablets, music systems and more, at much lower prices. 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 tough competition to others. Further, the threat of imitation is also a major factor which impacts on sales volume of this corporation. As products of Apple are innovative and high in demand so, to gain competition over, rival companies imitate the design and features. They also offer imitation products at a much lower cost to customers having less purchasing power. As shown in the illustrated figure- A comparison of products of Apple with one of its rival Macs is made. It states that the average sale price of iPhone and iPod products is more than USD 400 in last years from 2012 to 2017. In place of this, the selling price of Mac products is more i.e. near about USD 1150 in the same period. In addition to this, the iPhone X is considered one of the most expensive handsets so, it is beyond the purchasing power of common people. Customers who are technological lovers or belong to high status, only buy such type of products. Apart from this, the mentioned graph also shows the dependency of Apple on a single product range. It reflects that the series of iPhones is accounted as the 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 weaknesses due to the decline in product life-cycle. So, this condition is going to create a negative implication on the future growth and competitiveness of Apple.

Sales performance of Apple vs. Samsung Customer having less purchasing power

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 the products of Samsung give tough competition to Apple. Therefore, this company is required to pay attention and develop strategies by which it can face challenge and grab the high attention of customers (Goodman, Bamford and Saynor, 2016). Other than this, because of rising competition, Apple also faces heavy employee turnover. Competitor firms offer workers more salaries and accommodations in order to get their contribution to business success. So, it also assists this enterprise in giving benefits to employees so that retention of them can be gained for long-term profitability. Rising labour cost is another threat which involves contract manufacturers, for Apple. So, it reduces profit margin as well as pushes the selling price of products higher.

In terms of approaches, the development of new product lines, higher sales volume on the basis of rising demand expansion of the distribution network etc. are some opportunities for Apple Inc. It helps this firm in coping with weaknesses as discussed in the above parts. As per the views of Urry (2016), it is evaluated that Apple has lack of distribution network therefore, this company needs to create modifications. It will help in enhancing and improving sales volume as well as expanding business at the global level. By expanding its distribution network, Apple can offer its products in the global market and attract more customers. Moreover, through aggressive marketing, this company gains the opportunity to enhance its sales performance. This kind of approach is directly linked to the rising demand of people for mobile products and accessories. Along with this, the present firm also has a chance to explore its product lines through which dependency on a single commodity can be reduced. Apple Smart Watch, iTunes media player, HomePod and more, are some illustrations of the innovation and creativity of Apple. It supports this corporation in expanding business in the international market and gaining more profitability. Thus, all these approaches indicate that there are many opportunities present in the marketplace, by which Apple can achieve high growth in business.

4. Relevant Models/Theories

From the above-mentioned arguments, it is interpreted that the concept of CSR activities and sustainability are related to each other. Therefore, Apple has made a large contribution to the development of society (Ward, 2016). Any innovation in its products conveys that this firm is majorly concerned with ethical and environmental issues and brings creativity to production accordingly. There are various approaches to CSR are available which integrate corporate activity into the business model of an organization. In this regard, the business of Apple ensures its adherence to ethical standards, law and international social norms. All these processes show the continual commitment of businesses to contribute to sustainable economic, environmental and societal development (CSR in Apple Inc.,2017). Along with this, they behave ethically while uplifting the quality of life of workers, their families and local communities. Thus, in the context of Apple, this company has given a commitment to

  • Support technological development which helps in measuring social changes. Technology aids in fighting diseases, improving education, distributing food, enhancing the living standard of local communities and more. So, all these things show that Apple is a leader in this era.
  • Give support dissemination of credible and worldwide information related to social concerns. For example- the innovation of iTunes is considered as the world's important source for social programs.
  • Provide support to innovative design as Apple applies to products for social change. It uses green and clean energy to manufacture products for developing sustainability. For example- It promotes electronic vehicles as an alternative to transportation which consumes much fuel.

Apart from these, conducting business by considering ethical standards, preventing the environment from pollution, contributing towards the development of social health and education etc., shows the responsibilities of Apple towards society. Furthermore, adheres business with regulatory laws and legislations, regular payments of taxes, give cooperation with the Government to improve economic conditions and more, proving that Apple has performed its legal duties also. This company also perform its major duties towards employees by giving them a healthy and safe working environment, fair wages and welfare services, training and development facilities, etc. All are these illustrations that prove that Apple is a market leader which concerns more about enhancing the quality of life of people and developing societies.

CSR Carroll Model:-

According to A Carroll (1991), this model consists of a range of models and theories which are summarised into four types of social obligations (Laszlo and Cescau, 2017). It includes economic, legal, ethical and philanthropic responsibilities. In this regard, the 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 accomplishing the ultimate goal of being a good citizen. Ethical responsibilities is another norm that people expect from companies to conduct business in an ethical manner and avoid harm. Similarly, in same context, legal obligations is the third thing, which assists organizations in obeying the laws of the environment, society and government. Last but not least is economic responsibilities, it state the main responsibility of entities. This factor assists a company to satisfy the 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 has performed major duties towards the development of society. It has also taken entire responsibilities related to providing 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. is concerned more with protecting human rights and global communities instead of pursuing profitability. The three main aspects that prove that this corporation has invested a lot in sustainable development are the company's code of conduct, it supplies of responsibility progress report and its online report with respect to CSR activities. In this regard, the 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 results of human and labour rights, ethics, management system, worker health and safety etc. This company also assists its suppliers in providing a safe and healthy working environment to workers and treating them with respect and dignity. It has provided proper training to employees so that they can understand their responsibilities towards the manufacturing process.

Along with this, different approaches used by Apple Inc. to overcome its weaknesses also entail that this company has performed its business in a profitable manner. Therefore, commitment to contribute some part of its profitability and revenues in the development of society can be easily fulfilled. It has faced various challenges to run CSR activities and businesses in ethical manner. But apart from this, it has gained success to overcome these difficulties and help in preventing nature from harmful effects of the manufacturing process.

Recommendation

From this project, it has recommended that all corporations pay huge attention to societal and environmental issues. They must operate business in ethical manner by concerning those factors which may harm nature and ecosystem. They have to adopt measures by which any activity of their business could not impact on the sustainability of the marketplace. As it has been evaluated Apple Inc. has been concerned a lot on improving the living standards of local communities by conducting various CSR activities. But still, this company is required to perform in a consistent manner with expectations 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 enhancing the quality of life. Apple is required to make contributions in another field also by which development of society can be achieved. It includes investment in government and private projects for education-related programs; women empowerment and upliftment of societies. Along with this, Apple should be concerned on creating diversification in products. It needs to manufacture some more innovative products and adopt high distribution channels. It will help in grabbing the attention of more customers and enhancing sales volume as well.

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Conclusion

It has been concluded from this mentioned project that today every business entity is concerned with developing societies. They have made a large contribution in the development of society. They also use measures by which the ecosystem can be prevented from the 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 kinds of procedures by which a company can face major challenges like how to compete with rivalries, ways to overcome weaknesses and opportunities for enhancing future growth of the business are also explained in further parts of this assignment. So, it is necessary for organizations to obey such recommendations for enhancing profitability and revenues. It helps them make more contributions towards the enhancement of society and sustainable development.

Reference

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.
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