Introduction
The financial success of modern companies should be discussed in the context of the organization’s social performance because the firm’s profitability is directly associated with the corporate social responsibility. Apple Inc. is a US-based multinational corporation that is known as one of the leading manufacturers of smartphones, computer electronics, software, and electronic devices in the world.
The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976, and currently, Apple is characterized by the strong brand image and high customer loyalty (Bergvall-Kareborn & Howcroft, 2013). Products and services proposed by Apple are recognized all over the globe, and the company’s main competitors are Samsung and Nokia (Heracleous, 2013). The purpose of this paper is to discuss products of Apple, concentrate on external factors that influence the company’s progress, analyze the role of primary stakeholders in influencing the organization’s performance, and describe the corporate social responsibility issue associated with Apple.
Products of Apple and External Environment’s Factors
The nature of Apple’s business is the production of innovative electronic devices, including smartphones, portable devices, tablets, and computers. The focus is on proposing the most attractive and widely recognized products that are based on the advanced technologies. The successfulness of the business depends on the unique offer (Bergvall-Kareborn & Howcroft, 2013).
Thus, Apple provides consumers with the inimitable experience associated with the use of exclusive and premium devices based on the specific software. As a result, the structure and types of Apple products can be explained with reference to the idea that consumers receive the unique experience and innovative devices. Products and services proposed by Apple expand annually, and currently, the company offers laptops, iPhone, iPod, iPad, the operating system Macintosh to support Apple hardware and devices, Apple Watch, and Apple TV among other products (Apple: Investor news, 2016).
Two external environment’s factors that can influence the company’s development and progress are economic and technological ones. Thus, changes in the economic environment in the United States and globally influence the company’s sales directly. Apple’s pricing strategy is based on proposing premium prices for high-quality and recognizable products (Apple: Investor news, 2016). However, the increased rates of unemployment in the United States and other countries, as well as economic instability, can influence the buying power of potential consumers (Bergvall-Kareborn & Howcroft, 2013).
The technological factor is also influential because the Apple strategy is based on the implementation of the latest technologies and promotion of innovation (Heracleous, 2013). The development of information and communication technologies, as well as approaches to producing hardware and software, can influence Apple significantly, and the impact can be both positive and negative because the integration of new technologies in production will require the additional investment.
The Impact of Primary Stakeholders on Financial Performance
Primary stakeholders are actors that can influence the progress of the company directly (Zhong, Wang, & Yang, 2015). In Apple, primary stakeholders are investors, shareholders, customers, employees, suppliers, and communities. Each group of stakeholders can influence the company’s financial performance, and it is important to focus on the potential effects of these stakeholders’ activities on the organization’s development. First, it is important to note that investors and shareholders expect high profits, and their investments are determined with reference to the returns received during previous years (Apple: Investor news, 2016). Therefore, the financial performance of Apple is dependent on the balanced financial planning to avoid debts and guarantee payments to shareholders. Furthermore, when returns on investments increase, investors choose to provide more resources because of Apple’s high liquidity.
Customers can also influence the financial performance of Apple because sales depend on the consumers’ interest in products. If a product’s reputation is affected or its price is extremely high, customers will not buy this product, and sales will decrease significantly (Zhong et al., 2015). Employees also have the impact on Apple’s progress. Expenses associated with research and development increase when employees are oriented to developing new innovative products.
Still, when employees do not share the values of the company, costs associated with inventories and operations can increase significantly (Zhong et al., 2015). Suppliers can affect the financial performance of Apple if the provided materials are not of the high quality. As a result, the company can choose to withdraw the product and experience significant financial losses (Apple: Supplier responsibility, 2016). Finally, communities can directly influence Apple while supporting or opposing the construction of facilities in the certain area. As a result, the company can expect the increases or decreases in expenses associated with manufacturing Apple products.
Corporate Social Responsibility Concern
Companies pay much attention to developing their corporate social responsibility strategy in order to address the interests of the public and local communities. However, in spite of Apple’s attempts to develop the efficient corporate social responsibility strategy, there are issues that should be taken into account while discussing Apple’s experience in this area. The main concern that is widely discussed by the public and related to the sphere of social responsibility is tax avoidance. The problem is in the fact that analysts note that Apple chose to use tax avoidance strategies in order to decrease payments associated with company’s income taxes.
According to Lanis and Richardson (2015), Apple was “one of the first technology firms in the world to designate overseas salespeople in high-tax countries in such a way that allowed them to sell on behalf of low-tax subsidiaries on other continents, avoiding the payment of corporate taxes” (p. 443). In addition, the researchers state that Apple also used the “Double Irish Dutch Sandwich” technique to reduce taxes while operating in Ireland and the Netherlands (Lanis & Richardson, 2015, p. 443). Such tax avoidance practices are discussed as socially irresponsible because companies have the legal responsibility to pay income taxes and address the interests of communities. Thus, focusing on the strategy of tax avoidance, Apple seems to violate such principles of corporate social responsibility as integrity, legal and ethical responsibility, and honesty.
Conclusion
Apple is the multinational company which commercial success is based on its effective business and marketing strategy. While manufacturing unique premium products, the company attracts loyal consumers who are interested in the proposed services. Consumers represent the influential group of stakeholders along with investors, shareholders, suppliers, employees, and communities.
Still, although the company is focused on attracting customers and increasing their loyalty while using the principles of corporate social responsibility, there are concerns that can influence the company’s reputation and its image in communities. The problem of tax avoidance reported by some analysts is one of such concerns. From this point, Apple should pay more attention to developing its corporate social responsibility in order to address the tax avoidance issue and improve the social performance. These steps are important to attract more customers since the market of electronics is highly competitive.
References
Apple: Investor news. (2016). Web.
Apple: Supplier responsibility. (2016). Web.
Bergvall-Kareborn, B., & Howcroft, D. (2013). The Apple business model: Crowdsourcing mobile applications. Accounting Forum, 37(4), 280-289.
Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99.
Lanis, R., & Richardson, G. (2015). Is corporate social responsibility performance associated with tax avoidance? Journal of Business Ethics, 127(2), 439-457.
Zhong, N., Wang, S., & Yang, R. (2015). Does corporate governance enhance common interests of shareholders and primary stakeholders? Journal of Business Ethics, 4(8), 1-21.