Apple is an American technology company that was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. Apple is known for designing, manufacturing, and marketing of personal computers, software, mobile phones, portable digital music players, media communication devices. They also offer networking solutions and sell third-party digital music and application (Apple Inc, 2015). In summary, Apple’s business nature is manufacturing technology devices, software and providing various services to clients. Apple’s hardware products include Apple TV, iPhone, iPod, and iPad. The software applications offered by the company include OSX and iOS operating systems. Apple also sells their digital content and applications through Apple store, Mac App, iTunes Store and iBook stores.
Apple Company has a collaborative organizational structure. Different departments like the hardware and software departments work together to achieve certain goals. Additionally, each senior vice president is in charge of a specific business function. For example, there is a senior vice president for marketing, senior vice president for retail and a senior vice president for industrial design. Under the senior vice presidents, there are also numerous vice presidents for various product and outputs such as a vice president for consumer apps, a vice president iOS apps, and a vice president for iPads.
Apple is a multinational company that sells its products worldwide and manufactures most of its products in the Asian countries as it is more cost effective (Khan, Alam, & Alam, 2015). Any political instability from one of the countries where Apple is based could threaten the success of the company. The political pressure is not only based on the overseas countries it can also come from the host country as was witnessed in 2010 when some of the parts used to make the iPhone were banned from importation to the United States by the United States government (Apple, 10-k).
Economic uncertainty is also a major factor that can affect the success of the company. For example, the global recession in 2012 really affected the revenue of Apple Company as advanced economies like Europe, Japan and America were greatly affected (IMF 2013). Fluctuating foreign exchange rates and change in taxation rates can also affect the success of the company as the company may incur higher costs. To counter the high costs the company might be forced to raise the prices of its products and services making Apple products to be quite expensive and as a result, consumers may end up buying fewer products.
Apple’s stakeholders that influence the company’s financial performance are the suppliers, customers, Top management, shareholders, and government. Customers are the key stakeholders as the business cannot be successful without their support. Apple products have a higher price range compared to alternatives but consumers are comfortable with the price range of products. The customer’s main concern is that Apple sells products that are effective and efficient. Apple management is aware of this demand and ensures that they provide quality products to meet consumers demand.
Suppliers can also influence Apple’s financial performance in that a company’s bad reputation can trickle down to Apple and cause a scandal that affects their sales. For example, labor laws in the United States clearly define that workers who work overtime should be paid their overtime dues. If Apple gets supplies from a company that violates this law the company might get into trouble and by extension, Apple might be pulled into this issue (Christina et al, 2012). Apple being aware of this has a Supplier Code of Conduct. Suppliers are meant to adhere to it as Apple only does business with the companies that are compliant.
Top management plays a major role in affecting the organization’s financial performance. Top management is the key decision maker, therefore, any decision made will affect the overall business performance. For example, Apple top management decided to outsource some of their services by manufacturing some of their products in the Asian markets as they could higher cheap labor and save on costs. This, in turn, proved profitable as they reduced the costs of production but still maintained quality on their product.
Shareholders are important stakeholders to any business as they invest their money into the company, therefore, owning a percentage of the business. Shareholders, therefore, have a say in how a business is run as a company gets income to run their daily operations from these investments. To ensure that they get more investments, Apple has to keep their shareholders happy by operating in a manner that is acceptable to the shareholders and also makes profits so that the shareholders can gain on their investments. If the shareholders decide not to renew their investments an organization financial performance will be negatively affected as the company will not have enough capital to run its operations comfortably.
The Government is a major stakeholder in a multinational business like Apple. The government benefits in taxes when the company makes more profits. However, the government can affect the financial performance of the company if the government decides to reduce or increase the national minimum wage. This would determine the number of people who have enough disposable income to afford to buy Apple luxury products. The government can also increase taxation which will affect a company’s costs and therefore affect the company’s financial performance. Therefore, the government is an important stakeholder as they hold the power to change things very quickly and affect how a business is run (Zu, 2009).
Corporate social responsibility is the obligation of a company to exercise a positive impact on the society and the environment. Apple is the largest and most profitable technology company in the world. It is, therefore, important for the company to meet its corporate social responsibilities as it is ethical. However, there are times when Apple has been caught up in controversies over their Corporate Social Responsibility despite showing commitment to practice ethical standards by having a Supplier Code of Conduct in place. An example is Foxconn, a Chinese factory that employs more than nine hundred thousand workers with whom more than four hundred thousand work at the Shenzen plant. There are fifteen factories at the Shenzen plant, including restaurants, grocery stores, banks, hospitals, and dormitories. Foxconn manufactures iPhones and iPods amongst other dealings with companies like Sony and Dell.
In 2010 it was linked to so much controversy as there had been thirteen suicidal cases reported. Other issues included hiring underage workers, employees being harshly ridiculed by their managers in public, staff working long hours, and employees not being paid their overtime dues. There had also been riots and explosions at two Foxconn plants. It was a big blow to Apple as Foxconn manufactures its iPhones. Apple addressed the issue by hiring auditors to assess the situation at the factory. Investigations carried out by Zhu Guangbing showed that the suicides had been mainly as a result of internal management. The managers exercised a military-style management and workers were not allowed to interact with each other while working. Workers found in violation of the rules were fined and scorned by their managers. Foxconn has good recreation facilities such as a tennis court and a swimming pool which workers could not enjoy as they worked long hours. Foxconn released a statement declaring that they had addressed the issues as they had hired mental health professionals and expanded on the employee welfare programs. They also declared that they had reduced the working hours and were keeping track to ensure that employees work a maximum of sixty hours a week as declared in the code of conduct (Christina et al, 2012). All in all, Apple maintained that they are committed to high standards of Corporate social responsibility across all their supply chains.
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Apple Inc., (2013). Form 10-K. Cupertino, CA, United States of America: Apple Inc.
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