CorporateSocial Responsibility abbreviated as CSR is a phenomena that hasgained global attention besides achieving new resonance in the modernworld economy. Growing interest in CSR in the modern business worldhas its roots in the dawning of worldwide trade and globalizationwhich has been echoed in the increasing business complication andgrowing demands for enhanced intelligibility and corporatecitizenship (Kotler & Lee, 2011). Furthermore, while politicalgovernments have basically taken the role for enhancement of theliving standards of its population, the societal needs have exceededthe government’s potential to satisfy them. As a result, attentionhas shifted to the role of corporate business in the society.
Variousscholars as well as institutions have defined the term CorporateSocial Responsibility (CSR) in different ways. One such institutionis the World Business Council for Sustainable Development (WBCSD)which defines CSR as the commitment of a business to participate insustainable economic development by working with its employees, theirkin and the local community as a whole (Jamali & Mirshak, 2007).In the same line, Kotler and Lee (2011) define CSR as a commitment bya business to augment community welfare through unlimited businessoperations and contributions of resources of the organization. In thelatter definition, the key word is ‘unlimited’ or unrestricted.This word entails that, CSR is not only confined to businessoperations that are guided by the law or are ethical or morallyacceptable, hence expected, but it is rather a commitment made by anorganization in choosing and executing these actions and making thesecontributions. Such a responsibility should therefore be done so asan organization is regarded socially responsible and will be shownthrough the employment of new business contributions and activitieswhether monetary or non monetary. In addition, the phrase ‘communitywelfare’ embedded in Kotler and Lees’s definition emphasizeshuman conditions as well as environmental concerns (Kotler & Lee,2011).
CorporateSocial Responsibility at
Appleis a giant electronic manufacturer based in the United States. It isfamed for making first class smart phones, the iPhone series, theiPad and Mackintosh personal computers and MacBooks. Just like othercompanies, Apple has a number of CSR programs. Even though during thetimes of its former CEO, the late Steve Jobs, Apple was not seen asparticipating in as much CSR as expected, things have changed. ItsCSR initiatives and programs are spearheaded by the Vice President ofthe Environmental Initiatives, Lisa Jackson who reports directly tothe Chief Executive Officer, Tim Cook. To show its dedication to CSR,the company releases environmental responsibility report whichincludes the specifics of CSR initiatives and programs by Apple.
Aspart of improving the welfare of communities, Apple has beenproactive in dealing with working conditions within their supplierfactories. The company introduced a Supplier Code of Conduct toensure that workers conditions of work are improved. Among themeasures taken include
Workerand manager training program whereby the company makes it mandatoryfor suppliers to train their managers regarding work practices,communication, harassment policies and most important workerprotection. On the other hand, workers are given informationregarding their rights, the local laws regarding work health andsafety and their rights as workers to void exploitation. This wasparticularly done to offset incidences of poor working conditions inits main supplier’s factories in China including Foxconn and Wintek(Backer,2013).Allegations that the company’s suppliers were practicing childlabor in China’s plants and use of hazardous materials likeN-hexane by Wintek, one of its touch screen makers prompted Apple towork towards elimination of health hazards, child labor as well asexcessive overtime that resulted many workers to commit suicide inChinese firms. Apple has trained several workers since then on safetymeasures and the use of safety equipment including chemical safetyand on control of dangerous energy stored in factory facilities.Besides, the company demands their suppliers to adopt the code ofconduct that requires 60 working hours a week and shun child labor.The suppliers must supply safety equipment to their workers andensure secure emergency exits that are unlocked throughout the day toensure workers’ safety. The company has a zero tolerance policy tochild labor. In the case of Yantai child labor, the victims wererescued and taken back to school (Backer,2013).
Toreinforce their efforts of ensuring ethical practices and successfulCSR, Apple has partnered with third party oversight organizationsincluding Fair Labor Association (FLA) which is a not for profit bodythat promotes the protection of the rights of workers. The companycarries out audits on its suppliers to ensure that workers aretreated as required. The information is published on FLA’s websiteso as to improve Apple’s transparency and maintain accountability(Backer,2013).
Applealso works towards educating and empowering its workers, not just toenhance their productivity, but to also improve their standards ofliving through increased income. Apple offers its education anddevelopment program to its workers free of charge and is currentlyoffered by 18 of its factories with more than 280,000 workers havingtaken different advanced courses since its inception (Dudovskiy,2016).
Besidesconcern for workers, Apple has shown concern on support of noblecourses in the community as well. In 2014, Apple announced itssupport towards an AIDS free generation. The effort was embedded in‘RED’ an App that was designed to help iPhone users, support thecourse of an AIDS free world during the World AIDS Day.
Asmentioned earlier, the modern population is conscious of climatechange. Apple realizes the importance of being environmentalconscious and safeguards the global society from the wrath of globalwarming. The company is known for producing the most power efficientproducts. The introduction of Mac mini which is the world’s mostpower efficient personal computer that uses 57% less energy ascompared to other computers is an example of the company’s concernfor the environment. According to Greenpeace’s Clicking CleanEnergy Report, Apple is actually the only company awarded with aClean Energy Index of 100% (Dudovskiy, 2016). As per 2014, all of theApple’s operations across the United States and 87 percent worldoperations were powered by green energy.
Stillon the efforts of conserving the environment, Apple has wellestablished recycling programs in about 99 percent of countries inwhich it operates (Dudovskiy, 2016). Since 2008, the company hassuccessfully diverted over 508 million pounds of its electronic wastefrom landfills. Similarly, the company seeks to reduce green houseemissions in its operations to protect the environment and hence thewelfare of communities. In 2014 alone, Apple employees took over110,312 trips on shared bicycle rides which is a 55 percent increaseover the 2013 period (Dudovskiy, 2016).
AppleEmployees and CSR
Itis not easy for a company to achieve sustainable CSR without engagingits employees. Apple realizes the importance of involving theiremployees in the development of CSR programs and participatingdirectly in these initiatives. Early 2015, Apple launched the GlobalVolunteer Program that is designed to encourage its employees tovolunteer in local communities. In this program, Apple offersemployees an opportunity to receive training and resources to enablethem create and publicize local volunteer community events to improvetheir immediate communities (MacRumours, 2015). This program isavailable in different countries including the United States, Corkand Sydney. Besides, it helps employees establish activities they canvolunteer for.
Thecurrent program is not the first one to enable employees engage incommunity programs. In fact, in 2011, Apple’s Matching GiftsProgram was introduced. In this program, the company matches themoney its employees spend on charities (to an annual $10,000 peremployee). The program also sees Apple match the time volunteered byindividual employees. Since 2014, the company donates $25 for everyhour its employee volunteers in a non-profit organization. Apple’semployees’ charitable efforts had raised an overwhelming $78million by 2015 for charities and non-profit organizations(MacRumours, 2015).
Importanceof Corporate Social Responsibility
Thereare different forms of CSR practiced by businesses across the worldand include ethical CSR, philanthropic/humanitarian CSR, andstrategic CSR. Essentially, CSR is very important for any business.In fact, all successful businesses in the world market todayincluding Apple Inc. are champions of CSR operations.
CSRis an ingredient for success of any business. Most businessrecognizes that it is difficult to do business with a populationfacing social problems hence it’s critical to help in solvingtheir problems. Besides, CSR helps organizations to be innovative inaddressing the demands of their customers, social issues, welfare ofemployees and stakeholders.
Bypracticing CSR, companies reap several benefits. Through CSR, acompany is able to protect its brand image. CSR helps a company gainconsumer trust and confidence with their brand. The modern world isseriously concerned with the phenomenon of global warming and whencompanies do not show concern over the environment, its brand maylose consumer confidence.
Inengaging in CSR, companies are able to reduce and avoid litigation.When a business focuses on morally acceptable and ethical activitiesincluding but not limited to respect for human rights, good workingenvironment for its employees and environmental friendly practicesmeans that the organization is compliant to the laws whetherknowingly or unknowingly. This saves the business unnecessary courtcases which are expensive and destroy the reputation of the company.
CSRpromotes customer satisfactions as it moves towards improving theefficiency and effectiveness of its products. For example, throughits environmental concern effort where apple has decreased totalpower usage of its products by 57 percent and introduction of Macmini-the world’s most energy efficient personal computer whichsurpasses the guidelines provided by ENERGY STAR, customers benefitby getting power saving products (Backer,2013).CSR is not only beneficial to the company but also to itsstakeholders. Employees are motivated when the company practices CSR,leading to reduced absenteeism and ability to maintain the mostproductive team.
HowChanges in the Economy can Affect Apple Inc.
AppleInc. is among the world’s most visible and popular consumerelectronics brand. The company has become one of the most profitablecompanies in the world through the development of a wide range ofconsumer electronic devices mainly smartphones, tablets, and othermedia devices like the iPod. The company’s unique business model inwhich it writes and develops proprietary software together withembedded operating system for all its gadgets has made the company tobe successful in the consumer electronics industry.
Theconsumer electronic and especially the Smartphone market is one ofthe fastest growing markets in the world. Since introduction ofApple’s iPhone in 2007, the Smartphone industry has witnessedexponential growth. As noted by the International Data Corporation,global Smartphone shipment have surpassed that of regular mobilephones in the first quarter of 2013 with estimates that more than 722million smartphones were shipped during the year 2012 alone. Thisnumbers has been growing year in year out due to increasing demandfor the latest and improved phones by consumers world over. Thismeans that, Apple and other manufacturers in this industry arevulnerable to stiff competition. The companies must therefore worktowards remaining innovative and maintain high profit margins besidespracticing CSR. Changes in the economy can affect Apple Inc. due to anumber of reasons. Basically, the company outsources its productionto its suppliers in China and other developing economies where thereis cheap labor. Essentially, changes in these countries’ economy aswell as the economies of its major markets including the UnitedStates and Europe, can affect Apple Inc.
Currently,Apple Inc. enjoys low production costs and high profit margins thanksto the cheap labor in China-based factories. Increased labor costs inChina would therefore mean a reduced cost advantage of some ofproducts by Apple.
Inaddition, declining middle class incomes in certain developedcountries like the United States and Europe could significantlyshrink the potential market for premium consumer products marketed byApple. On the other hand, improved economies in the emerging marketslike Africa and Asia stand to boost Apple’s sales of high endproducts produced by the company.
Similarly,the U.S dollar may fluctuate or strengthen affecting the exchangerates in Apple’s key markets including China and Europe. If thedollar strengthens, the exchange rates would go high making itexpensive for the company to do business in these major markets.However, a decline in the dollar would lower exchange rates favoringthe company‘s operations abroad.
CorporateSocial Responsibility, CSR is a practice that has become popular inthe business world over the years. It is no longer business as usualfor organizations. The business of a business is not only to makeprofits, but to also contribute to the enhancement of the communitiesin which they do business with as well as employees, in what is knownas CSR. The current case on Apple Inc. shows clearly that engaging inCSR is critical for success. Customers build their trust andconfidence in businesses that are conscious of the rights of itsworkers as well as the welfare of the communities. Apple hasparticipated in a number of CSR projects aimed at protecting itsemployees’ interests, its customers, communities and mostimportantly the environment.
Backer,L. C. (2013). Transnational Corporations` Outward Expression ofInward Self-Constitution: The Enforcement of Human Rights by Apple,Inc. IndianaJournal of Global Legal Studies,20(2),805-879.
Dudovskiy,J. (2016 March, 7). AppleCorporate Social Responsibility (CSR).Retrievedhttp://research-methodology.net/apple-corporate-social-responsibility-csr/(Accessed July 7, 2016).
JamaliD. and Mirshak R. (2007). Corporate Social Responsibility (CSR):Theory and Practice in a Developing Country Context, Journalof Business Ethics72, pp.243–262.
Kotler,P. and Lee, N. (2011). CorporateSocial Responsibility: Doing the Most Good for Your Company and YourCause.New York: John Wiley & Sons.
MacRumours.(2015 March, 16). AppleLaunches `Global Volunteer Program` to Encourage Employees toVolunteer in Local Communities.Retrievedhttp://www.macrumors.com/2015/03/16/apple-launches-global-volunteer-program/(July 7, 2016).