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Apple’s Relationships

Focusing on the primary stakeholders of Owners, Employees, Customers and Suppliers as defined by Waddock (Waddock, 2009, p. 187 – 197) it appears that Apple only involves stakeholders when legally required to (e.g. shareholders), when they can provide valuable input on future products (e.g. customers) or not at all (employees and suppliers). The group afforded the most involvement in the decision making process is the owners, or Apple shareholders, which as owners of the corporation have legal rights to vote. Shareholders convene annually at Apple headquarters to vote on items primarily brought forward by different shareholders or shareholder groups (e.g. mutual funds). For the most part, shareholders follow Apple’s recommendations on how to vote although in the past two years shareholders have voted differently, sending a message to Apple about such things as Steve Job’s succession plan (Holt, 2011) and that newly appointed directors receive majority-share voted before being appointed (Randewich, 2012). As a shareholder, although I have the opportunity to vote, my feeling is that the ability to make a difference is significantly low given the voting power of such institutions as Fidelity and Vanguard. It should be noted that this group which has invested money into Apple is less likely to address topical issues such as manufacturers’ employee work conditions or the demand for cheaper products to support education because bad press on these issues will drive down stock prices and their investment value.

Although Apple touts creativity on their website displaying there is “creativity in every corner” (“Jobs at Apple”, 2012) implying that employees do have some input in the decision making process recent information from former employees paints a different picture where “good ideas occasionally get stolen and are attributed to others at the company”. Other employees have stated that “Good ideas are always welcome, but don’t act surprised when yours are put down at first and later get presented by somebody else than you, in a meeting where you are not invited” (Fiegerman, 2012). These examples cement the belief that for the majority of employees they have little input into the decision making process.

The customers’ ability to be involved in decision making is only truly possible in providing input to how products and services can be delivered. As previously mentioned, Apple customers are the most desired customers in the world for a couple different reasons. They require every new product released by Apple, sometimes waiting hours in line to purchase these new products and very willing to discard currently working products in order to attain the newest version. Secondly, they are willing to pay more for Apple products versus similar products from other vendors. These customers are also better educated than their PC-using counterpart (Fried, 2002) which implies that they are more likely to submit product feed to Apple. However, from a public perspective, customers may feel that Apple has very limited interesting in receiving unsolicited ideas as outlined on their website “Apple or any of its employees do not accept or consider unsolicited ideas, including ideas for new advertising campaigns, new promotions, new or improved products or technologies, product enhancements, processes, materials, marketing plans or new product names. Please do not submit any unsolicited ideas, original creative artwork, suggestions or other works (“submissions”) in any form to Apple or any of its employees.” (“Apple’s Unsolicited Idea Submission Policy”, 2012).

What customers may not know is that Apple is very active in collecting feedback from its Apple store customers. In fact, according to Steve Denning, “listening to customers is at the center of Apple’s business processes” and they use a Net Promoter Score (NPS) system to manage and react to customer feedback. Denning goes onto explain how Apple has integrated NPS into their daily activities “Comments from customers help store managers prepare for service recovery calls with detractors to close the feedback loop. The outcomes of these calls, together with the customer comments, provide important coaching and feedback messages that are passed along to employees” (Denning, 2011).

Of all the major stakeholders, suppliers (in this case manufacturers) have the least involvement in the decision making process. Employees of the manufacturers are just “one of the millions of human cogs powering the largest, fastest and most sophisticated manufacturing system on earth” and “cogs” never have any input into a decision making process at companies like Apple. Apple would not ask for supplier input because they have so little respect for the suppliers, not even enough respect to improve the atrocious work conditions. A former Apple executive confirms this lack of respect for suppliers and Apple’s ability to make them jump when needed by saying “We’ve known about labor abuses in some factories for four years, and they’re still going on. Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice”.  In an effort to improve supplier worker conditions, Apple has created a supplier code of conduct. However, since its creation in 2007, half of Apple suppliers fail at least one section of the code each year (Duhigg & Barboza, 2012).

My observation, based upon the information cited in this blog, is that Apple manages opposing stakeholder views by either siding with the shareholders or in the case of the other three stakeholders, ignoring their interests and focusing on the best interest of the company. A perfect example of this is the poor worker conditions faced in China. With the $400,000 earned by each US-based employee and with over $100 billion in cash reserves, there is no doubt that Apple could provide significant funding to these manufacturers to immediately improve conditions. However, Apple choose to instead update its supplier code of conduct policy and have an agency report on the conditions versus immediately engaging the Apple machine that has never faced failure to improve these conditions today.

As reported in an earlier blog posting (Apple’s Organizational Vision), Apple does not publicly distribute their values or vision statements. The closest statements available to a values/vision statement is their mission statement which only describes their focus on products and their Customer Focus commitment from their Business Conduct Policy which states “Every product we make and every service we provide is for our customers. Focus on providing innovative, high-quality products and services and on demonstrating integrity in every business interaction. Always apply Apple’s principles of business conduct” (“Apple’s Business Conduct Policy”, 2012). It is this commitment to the customer that ultimately drives all decisions made by Apple in their interactions with owners, employees, customers and suppliers.

References

Apple’s Business Conduct Policy. (2012). Retrieved from http://files.shareholder.com/downloads/AAPL/2120696327x0x443008/5f38b1e6-2f9c-4518-b691-13a29ac90501/business_conduct_policy.pdf

Apple’s Unsolicited Idea Submission Policy. (2012). Retrieved fromhttp://www.apple.com/legal/policies/ideas.html

Denning, S. (2011). Another myth bites the dust: How Apple listens to its customers. Forbes. Retrieved from http://www.forbes.com/sites/stevedenning/2011/08/26/another-myth-bites-the-dust-how-apple-listens-to-its-customers/

Duhigg, C. & Barboza, D. (2012). In China, human costs are built into an iPad. NY Times. Retrieved from http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all

Fiegerman, S. (2012). Actually, sometimes it sucks to work at Apple – here’s why. Business Insider. Retrieved from http://www.businessinsider.com/the-biggest-complaints-employees-have-about-working-at-apple-2012-6?op=1

Fried, I. (2002). Are Mac users smarter? C|Net. Retrieved from http://news.cnet.com/2100-1040-943519.html

Jobs at Apple. (2012). Retrieved from http://www.apple.com/jobs/us/. Accessed on October 15, 2012.

Keizer, I. (2012). Apple’s biggest fans are older consumers. ComputerWorld. Retrieved from http://www.computerworld.com/s/article/9230179/Apple_s_biggest_fans_are_older_consumers

Holt, C. (2011). Apple shareholders reject succession plan proposal. MacWorld. Retrieved from http://www.macworld.com/article/1158119/apple_shareholders_meeting_2011.html

Randewich, N. (2012). Apple ponders cash, caves on board-vote proposal. Reuters. Retrieved from http://www.reuters.com/article/2012/02/23/us-apple-idUSTRE81M1PW20120223

Waddock, S. (2009). Leading Corporate Citizens: Vision, Values, Value Added. New York, NY: McGraw-Hill Irwin.

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