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Coporate Responsibilities

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Assignment 1: Apple Analysis: Corporate Responsibility and Marketing Strategies
BUS 508 – Contemporary Business
Strayer University

Provide a Brief Description of Apple Corporation. Apple Inc. started on April 1, 1976 by Steven Wozniak and Steven Jobs. They had both been interested in electronics and both worked for technical firms in Silicon Valley. After Steven Wozniak came up with a design for a computer, Jobs thought of ways to market this new design. This begins the long dynasty of Apple Computers. Apple Inc. is now an American corporation that designs, develops, and sells computer electrons, software and personal computers. It is the second largest technology company worldwide.
Examine Apple’s position on ethical and social responsibilities and determine if they have met these responsibilities. Provide two reasons that support your position.

Apple Inc. like most companies has become more socially responsible regarding the environment and it workers. They are concern for society’s welfare and all their workers according to their Code of Ethics. Apple is geared to build not just better products, but smaller, thinner and lighter, which means less carbon dioxide emission. Apple engineers ensure all their products are as energy efficient as possible, receiving an ENERGY STAR certified rating. This means money saved by the consumer and less emissions in the environment, which is a win-win situation for us all. Apple also recycles in 95% of the cities they retail to, which calculates to 130 million pounds of waste reduction in our cities landfills. The company’s culture, and mission remains center around innovation and conservation. They want to build the most energy efficient products that will make the biggest impact on society without harming the environment. It’s because of their socially and ethically awareness that Apple is sometimes referred to as the GREEN APPLE.
Determine the impact that the publication of ethics and social responsibilities violations made by Apple’s suppliers has had on Apple’s reputation. Support your response with examples.

Apple Inc. Code of Ethics also places emphasize on the safety and well-being of both workers and suppliers, but in January of 2012, 150 workers at Foxcomm, the world’s largest electronics manufacturer, threaten to commit suicide by leaping from their factory roof in protest at their unfair working conditions. (Leaderswedeserve.wordpress.com/2012/01/31/ apples-new-leader). In recent news the Fair Labor Association (FLA) released the results of an independent investigation of Apple’s Foxconn supplier based in China. There were over 50 findings of either a violation of the law or the code, and just poor management in some cases. The report found the violation of worker’s health and safety, worker integration, wages, and working hours. (ABCNEWS.GO/Tech/apple-foxconn-production-lines-china-FLA). There were overtime issues reported at three of Apple’s Foxconn factories in Guanian, Longhua, and Chengdu. Employees there would work more than seven days in a row without the required minimum 24 hour break. This poses a health and safety issues for all the workers. It was discovered that 14 percent of workers did not receive compensation to which they were entitled for overtime. Bad publicity can drive a company to its breaking point. Apple is more than capable of influencing improvement conditions at the Foxconn labor sites. Although Apple assures its commitment to high standards of social responsibility, its Foxconn employees are seriously disturbed with working situation. A negative public perception of any company can cause the overall stock to go down. The company may see a decline in the purchase of its product as consumers choose another brand. This has not been the case for Apple Inc. Apple had a lackluster stock performance in the past year falling 11 percent but, Apple is such a well-known company that its stock performance reflects on its brand. Apple is dragging down the tech sector’s overall earnings growth by releasing competitive prices. They have a strong ability to create or remake new technology categories, which they are relying on. Apple is sure to come out with the next BIG THING in technology. The concern is not so much on aggressively growing profits. The company’s focus is on strategies that will keep them strong in older markets and position them for new ones. (Kelleher, K. (2013). Apple Is Showing the World Two Different Faces) Despite all the news about Apple’s labor violation, Apple released the iPhone 5S, and the lower-cost 5C and it still manages to turn a profit with recent record sales of its iPad; three million were sold in the first weekend, however Foxconn has raised the wages of workers by 25 percent. Both Apple and Foxconn have agreed to pay workers retroactively, if they didn’t receive the correct overtime wages.
Suggest two (2) methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward. Justify your response.

The actions taken to correct ethical and social violations in a company greatly depend on the nature of the violations, the appearance of violation complacency among management, and the degree in which the violations are made public. Stakeholders prefer to support companies with strong ethical practices for personal and financial reason. It is in the interest of the companies to adhere to the federal guidelines put forth by the Federal Labor Association (FLA). Unethical practices can be viewed as being untrustworthy and may ruin public relations with stakeholders and investors. This could also have similar results with consumers purchasing less of that product based on bad perceptions. Apple’s new CEO Tim Cook has to lead by examples in response to the outside pressure. Apple cannot continue to assure that they are committed to the highest standards of social responsibility when evidence speaks otherwise. There are a few things that Apple Inc. can do to ensure suppliers adhere to wage and benefits standards. Since Apple is an American Corporation, they could require Foxconn to adhere to The Fair Labor Standards Act (FLSA) of the United States, which prescribes standards for the basic minimum wage and overtime pay. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. There have been allegations of unfair treatment of Farsi speaking customers. There is also talk of unfair treatment of woman within most of these labor facilities, so an investigation by the Equal Employment Opportunity Commission into discrimination complaints would be in order. (International Business, T. (6). Is Apple Rotten To Its Core Without Jobs?) Second, certify payroll reporting requirements, which may be overwhelming for the suppliers, their office staff, and the accounting professionals who support them, but Payroll reporting would require suppliers to submit a payroll report verifying the actual number of employees and capped wages for that period. It is a tool to ensure compliance with government and federal regulations. These steps may be costly implementations, but regardless the cost, it would ensure the fair treatment and wages that Apple employees are entitled too. Apple could also allow more labor rights advocates, environmental groups and American labor rights agencies to monitor its suppliers’ factories. These step would ensure compliance to the high ethically and social responsibility that Tim Cook assures there supply chains are committed to. There should always be a means to regulate the fair treatment and ethical rights of all human beings. It doesn’t matter if cooperation’s operate within the limits of this country or abroad. If we allow companies like Apple to continue to side step the issues of human rights, then we continue to foster a society focused on profit gains, with no human compassion for others less fortunate.
Do I believe Apple’s customers would be will to pay more for its products if Apple had to increase the selling prices in order to provide better wages and benefits for suppliers’ workers? Provide a rationale for your position.

In order to best maximize their profits, most large companies have created their own profit systems. These systems allow the companies to maintain overall control of the product and give them a guaranteed rate of return, while at the same time allowing local owners to create a low-wage workforce best suited to local conditions. In order to reduce taxes and cut cost most big names build their products offshore, where they aren’t regulated under most federal labor laws. This system is almost like a franchise, perhaps a McDonald or a Burger King. However, big executives and owners, when workers demand better compensation, their excuse is they simply “don’t have money for raises and compensation”. This is all said while driving away in a Mercedes, to their multimillion dollar home in an exclusive neighborhood just north of the city. I don’t believe customers would be willing to pay more for Apple products if, Apple had to increase selling prices in order to provide better wages and benefits for suppliers’ workers. History has shown that most customers are looking to buy cheap, and normally look toward its competitors when a brands price becomes too high. I think this would be the case with Apple. There are a number of electronic and technology Companies that would be happy to seal Apple’s market if given the opportunity, but right now Apple continues to lead in sales, while lending an ear to a little bad publicity. I believe Apple is in a position to influence better working conditions to include increased wages from Foxconn, but why does it have to be at the price of the consumer? What would happen if CEO’s would take a salary cut to improve working wages for their employees? It was reported that Tim Cook earned $378m in 2011, and the company has a $90 billion dollar cash reserved, but there has been little improvement at one of its key suppliers, Foxconn.
Analyze Apple’s current overall marketing strategy. Recommend two (2) actions that Apple can take in order to improve its competitive advantage in the global marketplace. Support your response with examples of instances where your recommendations yield the desired results.

Apple has a very attractive marketing strategy. Where most companies like to keep their new innovation under wraps. Apple has a GO BIG OR GO HOME type of marketing strategy that takes the world by storm. When Apple first decided to engage the PC market, it aired a Super Bowl commercial directed by Ridley Scott. At the time, Scott had just finished directing “Blade Runner” and was considered a hot property. In the commercial, a young woman with a huge sledgehammer smashes it into a massive television screen, bathing the bald-headed drones mesmerized by the monitor in a brilliant white light. The commercial then announced the release data of the Macintosh computer. The commercial generated widespread buzz and was actually voted “Commercial of the Decade” by Ad Age (www.ehow.com/info-apple marketing strategy) This strategy continues with the arrival of the iPhone and the iPad, which also use proprietary software applications like iTunes to download music. Instead of completely ignoring their critics Apple is in the business of listening to their number one critics, their consumers. Apple builds beautiful products for loyal customers who love them. They equip their products with the best features and benefits that can’t be matched. Apple allows their developers to profit from their creation but still retains ultimate control of Apple standards, this way consumer gets the best their developers have to offer. Despite Apple’s recent short comings with ethical and social investigations at their facilities, it still creates a giant profit each year. Their marketing strategy is second to none, but since Apple has taken a black eye they may want to consider taking a lesson from BP. The BP oil spill of 2010 was one of the largest spills in U.S History. BP’s reputation was tarnished while environmentalist zoomed in to attack. BP responded quickly by forking over millions in support of the clean-up efforts and victims affected. They also advertise their effort in the form of commercial, which also spoke of their new energy conservation acts. Apple should commercialize how they recycle in 95% of the cities they retail to, saving millions of pounds of waste in our landfills making them a green cooperation; maybe it will overshadow their ethical dilemmas at Foxconn. If they commercialize their improvements at their FoxConn facilities offshore, maybe that will appeal to their consumers, showing a softer side of the tech giant. Regardless, of the marketing actions taken by Apple, I’m sure they will continue to be a global force.

Reference Page
Bassi L. J (2011) Good Company: Business Success In The Worthiness Era (e-book).San Francisco, CA: Berrett-Koehler Publishers.
Boone G. & Kurtz D. (2013) 15th Edition: Contemporary Business.
Bowie, N.E., &Schnider, M (2011). Business Ethics for Dummies.
Kelleher, K (2013) Apple is showing the World Two Different Faces-And That’s a Problem. Time.Com,1.
International Business, T. (6). Is Apple Rotten To Its Core Without Jobs? Alleged Discrimination Farsis Speakers Adds to Companys Image Problems. International Business Times
Leaders We Deserve. (http// www. Leaderswedeserve.wordpress.com/2012/01/31/ apples-new-leader).

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