Creating Value in Times of Change - Assignment Example

Creating Value in Times of Change In contemporary world, the power of certain business corporations is tremendous. For instance, it is already hard to think of Apple as a fruit rather than a company. In this context, the extent of influence conducted by Apple Corporation goes beyond the national borders of USA and covers almost all the contemporary world. However, it is evident that with the rise of profits the level of social and ethical responsibility rises at the same time in contemporary world. Thus, in order to keep the privileged position as one of the most successful global businesses, Apple is certainly preoccupied with the task of maintaining their customers and partners. In other words, in contemporary world issues of reputation and strategy arise as crucial elements of corporate success. Therefore, the given essay presents the analysis of attitude demonstrated by Apple Corporation towards its ethical obligations for the society while possessing its marketing strategy nowadays. In this context, it is evident that corporation needs to ensure its corporate social responsibility conduct to Asian outsourcing companies and accumulate already gained innovative potential in its marketing strategy. Within its inner structure, Apple Inc. is a unique example of vertically integrated four-in-one company; in particular, it presents a complex conglomerate of hardware workers, software specialists, services equipment creators, and retail representatives (Vergara, 2012, p. 78). In this context, Apple is an unusual enterprise in its sector, as it is “opposed to other computer, tablet or smartphone companies that only design or make the hardware, and rely on other suppliers to supple the operating system and related applications (or apps), and to sell the product” (Vergara, 2012, p. 78). In other words, the comprehensive internal structure of Apple fully satisfies all its needs connected with innovations, production, and sales. In addition, it enlarges the number of personnel. At the same time, it means the greater responsibility and obligations of corporative management. Even though “Apple is not a manufacturing firm” and “it outsources its production to other electronic firms” (Vergara, 2012, p. 78), this fact does not change the essential obligation this company has for their employees. In Urakami’s (2012) opinion, “any company who places an order with a supplier must remember that this is a part of corporate responsibilities to make sure that outsourced business can be completed though due process of business ethics” (p. 3). Moreover, on its corporate site Apple Corporation states, “all over the world, we’re expanding opportunities for workers and ensuring that they are treated with respect and dignity” (Apple Inc., 2015). Thus, it is evident that company managers articulate their awareness of the need to provide a comprehensive social responsibility over Apple stuff all over the world. Nevertheless, the style of vertical integration this company currently applies enables its concentration solely “on their core competencies” (Vergara, 2012, p. 79). Consequently, the very organizational structure of Apple Corporation leads to the situation when managers underestimate their outsourced personnel. In this context, there appeared a publication on blaming Apple for being not humanistic and environment-friendly in its activity in China in 2011. Throughout the content, it provides a detailed and structured view on Apple’s insincere corporate social responsibility. In essence, there appeared strong critics of the real actions of this corporation. To put it in the authors’ words, “at the same time that Apple has been breaking sales records, workers making its products have been harmed by toxic chemicals” (Friends of Nature, IPE, and Green Beagle, 2011, p. 3). In order to support this accusation, it presents the shocking fact that twelve workers of Foxconn (largest Apple supplier) committed a suicide by jumping from the roof (Friends of Nature, IPE, and Green Beagle, 2011, p. 3). In this context, manifestations of human rights violations in Chinese factories go beyond this example and include strikes and female body inspections in other factories too (Friends of Nature, IPE, and Green Beagle, 2011, p. 16-18). In addition, Lian Jian Technology in Suzhou Industrial Park used poisonous but highly effective n-hexane cleaner in their everyday working day, which led to the appearance of hundreds injured and unprotected people (Friends of Nature, IPE, and Green Beagle, 2011, p. 6). Furthermore, great number of Apple suppliers produces emissions in tremendous amounts (Friends of Nature, IPE, and Green Beagle, 2011, p. 13-14). In general, all these evidences doubt the real existence of corporate social responsibility for outsourced Apple workers. In response, Apple did not react at all. Thus, the authors created the second part of the report; there, they discuss cases of Foxconn, Ibiden Electronics, Meiko Electronics, Kaeder Electronic and Unimicron Electronics solely in the dimension of environmental problems (Urakami, 2012, p. 4). After the second report, Apple Corporation finally realized the influence of these accusations on company’s reputation. Precisely, Apple finally contacted directly with Chinese NGOs (Urakami, 2012, p. 6). Moreover, on corporate website there emerged evidence on company’s efforts towards environment and human rights guarantees for their workers. For instance, it states to have helped almost 300,000 people to get free education in 2013 (Apple Inc., 2015). Nevertheless, the public awareness in America is extremely low on corporate activity towards its Asian suppliers; in this context, widely known in China fact of Foxconn suicides did not cost Apple huge reputation losses on a global scale (Urakami, 2012, p. 8). In this context, even the critics of Apple keep sending these messages from their IPhones and admiring the personality of Steve Jobs (Friends of Nature, IPE, and Green Beagle, 2011). In addition, in 2012 (the next year after these publications) Apple owned record profits (Lazonick, Mazzucato, and Tulum, 2013, p. 1). All this mean that Apple’s reputation is strong enough to fix the current problem. Although, it does not mean that Western public opinion will close its eye if this evidence will appear once again. In this context, one of the methods Apple can utilize is to maintain Apple officials in Asia in order to guarantee the direct contact between suppliers and corporate representatives. In this context, one of the problems revealed by critical reports is that “during the workers’ long and arduous recovery period, Apple never communicated with or visited a single one of them” (Friends of Nature, IPE, and Green Beagle, 2011, p. 8). Hence, permanent existence of Apple office in the places where the largest outsourced suppliers work will ensure them that their employer is interested in their well-being. Another option is to provide more freedom to outsourced factories and communicate with them like with partners that are more independent. Currently, Chinese NGOs indicate that these plants simply cannot solve highlighted problems by themselves; consequently, Apple is responsible for all their pollutions and human rights violations (Friends of Nature, IPE, and Green Beagle, 2011, p. 29). Although, if Apple representatives leave more money in Asian outsourced factories, this fact will increase the level of Asian factories’ own corporate social responsibility. Nevertheless, potentially this method can make Apple unconfident about the stability of its hardware sector. The nature of innovative business as an unstable creature (Lazonick, Mazzucato, and Tulum, 2013) supplements this apprehension. In other words, this step requires the high level of philanthropy and structural arrangement within Apple management. Notwithstanding this, it will absolve this corporation from extra set of responsibilities. To date, the significant part of Apple’s marketing strategy includes relying on Asian region in its supply chain. In particular, Asian plants provide this corporation with exceptional speed and flexibility of Apple production (Urakami, 2012, p. 4). In other words, the cheap and fast Asian workforce if outsourced enabled the high profits of this company in the recent years. And so, if to manage problems with outsourced suppliers through encouraging of their persistency, apparent financial loses will appear. In this context, the problem of whether Apple customers will buy more expensive IPhones and IPads arises. As story of Apple shows, the corporation can handle this problem. Throughout the years, even Apple critics valued its products for being “a combination of style, design and innovative technology” (Friends of Nature, IPE, and Green Beagle, 2011, p. 3). In addition, the level of self-confidence founded by Steve Jobs is the very nature of Apple enabled the situation when public highly appreciates everything from this corporation and does not look at the price tags (Friends of Nature, IPE, and Green Beagle, 2011, p. 23). Thus, Apple products are hard to lose their current position of the devices that are popular, because they deserve any money they costs. Notwithstanding this, encouraging outsourced workers has a potential to damage the core marketing strategy of Apple sales. In this case, it ruins its current culture of ‘secrecy’ (Friends of Nature, IPE, and Green Beagle, 2011, p. 19). In fact, this convention explains low acknowledgment of this corporation of its supply chain managements in terms of high level of competiveness with other IT companies in the region. However, it is important to mention that current business model of Apple is not dependent solely on one division in its inner structure. Moreover, the innovation and simplicity are universal for all Apple products in any situation. In this context, corporation already pushed iTunes download business as the platform to reduce additional costs and simplify the access to music (Amit and Zott, 2010, p. 4). In business environment, Apple demonstrates the high level of awareness of mutual partnership benefits, as it cooperates with other companies on being the distribution device of their products (Amit and Zott, 2010, p. 13). In the context of its current marketing strategy, Apple paid out $2.5 billion dividends for stakeholders in 2012 (Lazonick, Mazzucato, and Tulum, 2013, p. 7). In general, these facts demonstrate corporation’s attentiveness to their business environment and American society. In other words, in American market Apple currently manages to demonstrate its ability to behave in the framework of corporate social responsibility and increase their profits at the same time. In this context, the emphasis on simplicity in the core reason of its corporate success (DeMers, 2014). In the given circumstances, the necessity to handle with violations on Asian outsourced fabrics seems like the only severe problem for Apple Corporation in the long-term perspective. In order to cover the losses on costs of increasing corporate social responsibility in Asia, one of possible actions is to enlarge the market of software sales. In this context, music downloads amount is not remarkable in the countries which prefer music piracy instead. In fact, the evidence of this step’s effectiveness Apple Corporation had already demonstrated by its own success. After entering market in 2001, Apple’s sales from its iTunes store increased on $14 billion in five years (Lazonick, Mazzucato, and Tulum, 2013, p. 6). In fact, Apple’s ability to sale innovations in the most successful manner proves the need to develop company’s achievements in this direction. In short, attraction of customers living in those countries where people generally already enjoy Apple’s hardware production but still do not use its services will increase overall corporative profits in the near future. Additionally, the extent of stakeholder value is dangerously high now. In fact, the major part of Apple’s contemporary enormous richness is spent on pay-offs (Lazonick, Mazzucato, and Tulum, 2013, p. 27). In this context, Lazonick, Mazzucato, and Tulum (2013) provide examples on dangers of this tendency; in fact, Intel, Microsoft, and Cisco had lost their willingness to innovate, once they became more dependent on their stakeholders. To put it in authors’ words, They eventually lose the ability to invest in innovation because they spend their time and effort thinking about extracting value that was created in the past rather than envisioning and implementing the innovative investment strategies that will create value in the future. (Lazonick, Mazzucato, and Tulum, 2013, p. 28) So, reducing pay-off will mean further concentration on innovations, which led Apple Corporation to its current financial success. In order to sum up, it is evident that on the current stage Apple Corporation experiences much severe problems in the context of its corporate social responsibility than in its marketing activity. On the one hand, the proclaimed by themselves conduct to corporative workers worldwide does not match the reality. As Chinese NGOs had revealed, Apple suppliers have no incentive and money to guarantee safe workplace for their local communities. In this context, it is hard to believe enlightened words on the corporate website these days. In the given essay, two incentives of fixing this mismatch are mentioned. In particular, bringing Apple official representatives into Asian environment and providing more independence to outsourced plants are important in order to guarantee the attention to the supplier by actions not words. On another hand, the current Apple marketing strategy has been demonstrating its winning for all the last years. In this context, emphasize on innovation and simplicity is crucial in it. Thus, actions, which this paper propose for the future, include both enlarging current customer base and maintaining its innovative nature. In this context, attracting hardware users to software Apple services and reducing stakeholder pay-offs have potential to reduce the costs of increasing the level of social responsibility in Asia. References Amit, R. and Zott, C. (2010). Business Model Innovation: Creating Value in Times of Change. Barcelona, Spain: University of Navarra. Apple, Inc. (2015). Supplier Responsibility. Apple.com. Retrieved from http://www.apple.com/supplier-responsibility/ Chan, J., Pun, N. and Selden, M. (2013) The politics of global production: Apple, Foxconn and China’s new working class. New Technology, Work and Employment, 28(2), 100-115. DeMers, J. (2014). Here’s the Simple Secret to Apple’s Marketing Success. Forbes. 7 August. Retrieved from http://www.forbes.com/sites/jaysondemers/2014/07/08/heres-the-simple-secret-to-apples-marketing-success/ Friends of Nature, IPE, and Green Beagle. (2011).The Other Side of Apple. Translated from Chinese. The Institute of Public and Environmental Affairs. Retrieved from http://www.ipe.org.cn/Upload/Report-IT-V-Apple-I-EN.pdf Lazonick, W., Mazzurato, M., and Tulum, O. (2013). Apple’s Changing Business Model: What Should World’s Richest Company Do with All Those Profits? Cambridge, Massachusetts: The Academic-Industry Research Network Vergara, R. A. (2012). Samsung Electronics and Apple, Inc.: A Study in Contrast in Vertical Integration in the 21st Century. American International Journal of Contemporary Research, 2(9), 77-81. Urakami, K., (2012). Outsourcing and corporate social responsibility: Apple in China. Urakami Asia Management Research. May. Retrieved from http://mpra.ub.uni-muenchen.de/38614/ Read More