Apple Company has encountered a myriad of ethical and corporate responsibility challenges throughout its history. The company endeavors to offer products and services that meet consumer needs. Falck and Heblich (2009) allege that one of Apple’s corporate responsibilities is to guarantee that suppliers offer quality products. In addition, Apple Company strives to comply with labor laws. The company is environmental conscious and encourages its suppliers to observe environmental regulations. According to Falck and Heblich (2009), Apple basis its success in “creating innovative, high-quality products and services and in demonstrating integrity in every business interaction” (p. 250).
The company relies on confidentiality, veracity, respect, and honesty to manage its daily operations. Apple manufactures a majority of its products overseas. Therefore, it is hard for the company to ensure that all suppliers observe labor standards. The company has come up with a supplier code of conduct to ensure that suppliers comply with labor standards. Every supplier is obliged to sign and observe the labor standards. Despite the current success, Apple is still grappling with ethical and corporate responsibility challenges. This paper will discuss the current position of the company on ethical and corporate social responsibilities. Besides, the paper will discuss the marketing strategies that Apple uses and give necessary recommendations.
Apple’s Current Position
Apple Company demonstrates its commitment to social responsibility in its website. It encourages all the suppliers to ensure that their employees work under good working conditions. The company holds that safe working conditions are paramount for the success of an organization. Apple Company initiated an investigation to determine the dangers of using minerals like tungsten, tantalum, tin, and gold on both the employees and environment as a measure to promote safe working conditions (Sawayda, 2014).
Today, the company works in partnership with smelters worldwide to guarantee the safety of miners. Apple Company has gone further to eliminate conflict minerals as a sign of its commitment to corporate responsibility. For instance, the company no longer sources tantalum, gold, tungsten, and tin from conflict-prone countries like Democratic Republic of Congo (DRC). In 2011, Apple Company started persuading suppliers to abide by Conflict-Free Smelter Program (Sawayda, 2014). The company continues to liaise with smelters to ensure that they comply with the program.
Apple Company requires its vendors to treat workers with dignity. The vendors are not allowed to hire teenagers or exploit foreign workers. Prior to these regulations, most foreign workers were forced to part with a colossal amount of money so as to get hired. Besides, some suppliers hired underage workers and paid them poorly. Currently, Apple Company monitors all its suppliers and business teams to make sure that they use reasonable hiring practices. Moreover, suppliers are not allowed to overwork the employees (Sawayda, 2014). Employees are supposed to work for at most 60 hours per week. Apple Company insists that employees should not be forced to participate in overtime jobs. In 2014, at least 94% of all the suppliers observed the 60-hour maximum rule.
Falck and Heblich (2009) aver that Apple Company requires suppliers to use manufacturing methods that are environmental friendly. It discourages the use of minerals and other production materials that contribute to environmental pollution. A review of the company’s supplier responsibility report indicates that Apple is stringent in its effort to curb unethical behaviors among the suppliers. The company suspended ten suppliers for hiring underage workers. In addition, it stopped working with two suppliers for failure to improve working conditions. Four suppliers were suspended for providing false information.
Despite the effort to curb unethical practices and enhance corporate responsibility, Apple Company is yet to achieve its objectives. Cases of suppliers violating labor laws are still common in China. For instance, in 2013, China Labor Watch (CLW) accused Foxconn of “violating labor and environmental laws” (Sawayda, 2014, p. 7). The China Labor Watch alleged that Foxconn was hiring underage workers.
Besides, Foxconn was blamed for poor working conditions. Indeed, there were multiple cases of Foxconn’s workers committing suicide. It was alleged that the employees worked under extremely demanding environment, and this led to some contemplating suicide. Moreover, Foxconn was accused of using toxic chemicals that exposed workers to health hazards. The company’s facilities were poorly ventilated subjecting workers to the risks of contracting airborne diseases. Apple Company is yet to ensure that suppliers do not hire underage employees. Suppliers like Pegatron Corporation still recruit minor workers in Taiwan.
Effects of Publication of Ethics and Social Responsibilities Violation
Aguilar (2011) alleges, “The publication of ethics and social responsibilities violations committed by Apple’s suppliers has had damaging effects on the company’s character” (p. 37). Initially, the public regarded Apple Company as a socially responsible entity that cared for the well-being of its workers and public at large. Nevertheless, after revelations of what was happening at Foxconn, Apple’s reputation changed.
The public started feeling that the company exhibited double standards. The company was blamed for using its market dominance to exploit workers (Aguilar, 2011). Many people believed that the company retained a huge share of its profit at the expense of workers. At some point, consumers felt the urge to boycott Apple Company as a way to pressurize it to improve working conditions. The revelations ruined Apple’s integrity.
For instance, some people started questioning the company’s effort to compensate workers who die or get permanently disabled working for the company. Aguilar (2011) alleges that much of Apple’s success “rests on its reputation for “cool” among hip urban professionals and a positive corporate image” (p. 35). However, the allegations of employee abuse tarnished this reputation. Customers could no longer trust in its commitment to improving working conditions and ensuring that suppliers adopt environmental friendly operations.
Methods to Ensure that Suppliers Adhere to Wage and Benefits Standards
Apple Company has created a supplier code of conduct that requires vendors to ensure that they offer wages, which correspond to the work of the individual employee. To ensure that suppliers adhere to the standards enshrined in the code of conduct, Apple should come up stringent measures. For instance, the company should not only stop working with suppliers who violate the standards, but also impose hefty penalties.
The aim of the suppliers is to benefit from the relationship with Apple Company (Aguilar, 2011). Consequently, imposing sanctions would make them abide by the standards in a bid to safeguard their interests. Apart from imposing penalties, Apple should also instruct all the suppliers to allow their workers to join trade unions. The unions would pressure the suppliers to adhere to benefits and wage standards failure to which they would face industrial action.
Paying More for Products
Today, most customers purchase products due to their quality. Consumers are willing to buy expensive products as long as they are of superior quality. Apple Company uses a pricing strategy that is value-driven. One believes that clients would be willing to pay more for the company’s products. Apple is at liberty to increase the prices of its products as long as they meet customer needs. According to Aguilar (2011), clients are keen to buy expensive products if their prices are in proportion to the perceived value.
Apple’s Marketing Strategy
Apple Company uses the theory of ‘less is more’ to market its products. Competition in electronics industry requires companies to use simple marketing strategies that capitalize on consumers’ interests. Douglas, Craig and Nijssen (2010) argue that Apple’s marketing strategy relies on intuitiveness and simplicity. They allege that Apple’s marketing strategy seeks to inform customers about how the company’s products differ from others. For instance, the MacBook versus Personal Computer advertisement is intended to show customers the advantages of MacBook over personal computers. The ad is straightforward and easy to understand and recall. Consequently, it draws the attention of most customers and lures them to purchase MacBook (Douglas et al., 2010).
Lately, Apple’s marketing strategy has lost its gleam. Besides, the company’s iconic image has faded due to competition in the technological market. One wonders if Apple Company will ever regain the glory it enjoyed during Steve Job’s tenure. The company has not been aggressive in its marketing strategy. Apple should be aggressive in its marketing strategy. The company should increase the number of advertisements it runs per month. The reason why Samsung is dominating the Smartphone market is because of its aggressiveness (Sims, 2010). The company runs multiple publications that enable it to reach customers and remind them about its products.
Apple Company should focus on high-end customers since they buy the highest percentage of its products. Sims (2010) argues that instead of spending a lot of time trying to create a rapport with every client, an organization needs to work on consolidating its relationship with high-end customers. For instance, Apple should regularly update its high-end customers about novel products or services. Sims (2010) maintains that companies should ensure that their regular customers are always happy. Toyota Company has succeeded in the motor industry due to its ability to focus on high-end customers. It structures its marketing strategy in such a way that it appeals to the high-end customers.
Apple Company is committed to ensuring that suppliers abide by ethical and social responsibilities. The company demands that suppliers do not use chemicals that might expose workers to health hazards. In addition, suppliers are supposed to ensure that employees work under secure working conditions. Nevertheless, the company has encountered many challenges in dealing with suppliers. It has not managed to ensure that all suppliers observe the established code of conduct.
For instance, some suppliers like Foxconn continue to exploit their workers. The revelations of breach of ethics and social responsibilities by suppliers related to Apple Company have had adverse effects on the company’s reputation. Some customers view it as a company that is determined to boost its sales at the expense of consumers. To the contrary, Apple is keen to offer quality products to customers as demonstrated by its determination to implement the supplier code of conduct. Most customers purchase Apple’s product due to their quality. To increase its sales volume, the company should change its marketing strategy and focus on high-end customers.
Aguilar, F. (2011). Managing corporate ethics: Learning from America’s ethical companies how to supercharge business performance. Oxford: Oxford University Press. Web.
Douglas, S., Craig, S., & Nijssen, E. (2010). Integrating branding strategy across markets: Building international brand architecture. Journal of International Marketing, 9(2), 97-114. Web.
Falck, O., & Heblich, S. (2009). Corporate social responsibility: Doing well by doing good. Business Horizons, 50(3), 247-254. Web.
Sawayda, J. (2014). Apple Inc.’s ethical success and challenges. Web.
Sims, R. (2010). Ethics and corporate social responsibility: Why giants fall. Westport, CT: Praeger Publishers. Web.