In this multi-post series, I’ll explore Apple and how they compare to Corporate Social Responsibility leaders like Unilever. In this first posting we’ll look at Apple’s key stakeholders and the relationships Apple maintains with them.
As an Apple shareholder I am one of their stakeholders. Six years ago I purchased stock in Apple at $50/share. With their stock over $700/share today, they have served me very well as a stockholder. There is no doubt that Apple excels in ensuring the health of their shareholders as their stock is up 73% in the last year alone and 400% in the last 5 years (Satariano & Faughnder, 2012). They are a profit-maximizing machine that continually reinvents themselves with the introduction of new and improved products. Some have projected that Apple stock prices will double by 2015 (Umiastowski, 2012) as the iPad replaces laptops, the demand for iPhones grows– especially in global areas where cellular connectivity was not an option, and through sales of multimedia products like AppleTV. The incredible success achieved by Apple in the economic sphere (Waddock, 2009) puts them under the microscope of many who will or do demand that they are equally successful in all other spheres of corporate citizenship.
The next stakeholder to be considered is the customer or consumer. Of all the stakeholders, I find this type to be the most fascinating. The reason being is that Apple consumers are unlike any other. They buy Apple products that are significantly more expensive than similar products from other vendors. They will discard fully functioning products to obtain a newer version of the same product as soon as it is available. Today, the iPhone 5 was officially released and it is estimated that three out of four iPhone 4 users will upgrade to the iPhone 5 (Whitney, 2012). Understanding how Apple maintains their following of consumers will be powerful information that can be applied to any corporation. It may also explain a little bit about me because as I look around my house, I see three iPads, three iPhones, one iTouch, one Mac Mini and one Mac Notebook Pro.
The next Apple stakeholder is the Apple employee. Working for such an innovative company has to have its challenges for the employee. One has to wonder how this stakeholder is valued and empowered in such a company where they are sworn to secrecy and their founder Steve Jobs was said to have practiced a Draconian management style (Camm-Jones, 2012). Apple has a domestic workforce of 43,000 with 30,000 of those employees working in their sales stores. Although Apple is reported to pay higher than other mall-based retailers, the average annual salary is $25,000 (Segal, 2012) but when the average annual revenue earned on an employee is $400,000 Apple staffers tend to feel unappreciated. One employee reported that over a 3 month period he sold $725,000 in Apple products while making a mere $11.25/hour (Segal, 2012). With employee retention rates dropping below 3 years, Apple is now increasing salaries across the board in their sales outlets.
The final stakeholder to be considered would be the government. Although government is typically considered a secondary stakeholder, in the case of Apple the government is very involved with pattern disputes and even more interested in Apple’s offshore workforce. Through their contractors, Apple uses an estimated 700,000 workers based in Asia and Europe (Duhigg & Bradsher, 2012). This has caused many challenges for government as this number of jobs coming back to the US would be big boom for the middle-class and the current party in office.
Grading Apple on how well they serve these 4 specific stakeholders yields a middle of the road C-grade. They receive high marks from their shareholders who continue to earn incredible returns on their investments and their consumers who continue to snap up any new products that hit the shelf. However, employee appreciation and value appears very low based upon how well the wealth is shared at Apple where the average employee is earning $25,000/year and CEO Tim Cooks’ total 2011 compensation package is now valued at over $570m (Segal, 2012). Apple also receives low grades on their working with the government as the number of jobs that exist overseas negatively impacts government, community and individuals.
Camm-Jones, B. (2012). Inside Apple reveals the life of an Apple employee. MacWorld. Retrieved from http://www.macworld.co.uk/apple-business/news/?newsid=3331145
Duhigg, C., & Bradsher, K. (2012). How the U.S. lost out on iPhone work. The New York Times. Retrieved from http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html
Segal, D. (2012). Apple’s retail army, long on loyalty but short on pay. The New York Times. Retrieved from http://www.nytimes.com/2012/06/24/business/apple-store-workers-loyal-but-short-on-pay.html?pagewanted=all&_moc.semityn.www
Satariano, A., & Faughnder, R. (2012). Apple shares reach $700 mark. The Washington Post. Retrieved from http://www.washingtonpost.com/business/apple-reaches-700-after-iphone-5-shatters-previous-sales-record/2012/09/18/fbb32f54-019c-11e2-bbf0-e33b4ee2f0e8_story.html
Umiastowski, C. (2012). At around $70, Apple stock is cheap. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/growth-investing/at-almost-700-apple-stock-is-cheap/article4550143/
Waddock, S. (2009). Leading Corporate Citizens: Vision, Values, Value Added. New York, NY: McGraw-Hill Irwin.
Whitney, L. (2012). iPhone 5 on shopping list of majority of iPhone 4 owners. CNET | News. Retrieved from http://news.cnet.com/8301-13579_3-57505661-37/iphone-5-on-shopping-list-of-majority-of-iphone-4-owners/
Worrel, J. (2012). Apple earns more revenue-per-employee than Exxon Mobil. FudZilla. Retrieved from http://www.fudzilla.com/home/item/25720-apple-earns-more-revenue-per-employee-than-exxon-mobil