Case study: Apple Inc. and the challenge of a social responsible management

Nowadays, one of the main objectives for most of worldwide companies is to be recognized for its responsible management and ethical performance. On the one hand, citizenship seems to demand more from the private sector in terms of their responsibility to society. On the other, the globalization of information, supported on the development of new ways of communication, allows to know rapidly and without geographical limit.

In this sense, the achievement of a responsible management should be understood more as a process than as a result. Integrate CSR into the strategy of a business, requires a never-ending process of understanding, improvement, and monitoring (as in every strategic issue). And here is where not only companies fail, also society do.

Sometimes company’s just look for the result, it means to be recognized for its CSR (awards, reports, participation of indexes, standards, etc.) and sometimes society just look to specific problem (resulting from a business operation) asking for specific (sometimes simplistic) solutions.

I said all this to point out the complexity that, a case as Apple, brings when analyzing its performance in a doing good business perspective.

Apple is one of the most important worldwide companies; not only due to size (market, assets, etc.), but mainly because its contribution to the creation of a whole new industry with new products and services. Innovation is the biggest assets that Apple has and gives to society. It is the driver for the sector development and the basis for the economic development.

Furthermore, Apple created last year around 514.000 jobs in the US (1) , jobs that could be created in a different place under cheaper costs. This is a huge commitment to the local economy.

Because of its particular business model (the whole production is outsource) and the characteristic of its products, the main material issues for Apple could be summarized in two categories: environmental impact and supply chain management. These two issues are the focus of Apple’s efforts (and reports) and seems the base for the understanding in terms of CSR.

The environmental impact of their products is measured, managed and reported. Carbon footprint is the main tool used to identify where are major sources of emission in product’s life cycle and what actions should be taken, in order to improve efficiency, reduce cost and minimize negative impact. This is how a carbon footprint becomes a management tool for companies.

Moreover, the products are design to minimize its environmental impact, such as less energy consumption, small packages, recycling, etc. However, the responsible selection materials even it is state as a very important issue in which Apple is hardly working, there are many critics related not only to the danger of some materials used for iPads or iPhones, but also to the risk (and environmental and social impacts associated) to the extraction of raw materials use for the production. In this regard, Apple doesn’t mention anything.

In relation to supply chain, the challenge is huge. Apple has everything very well in paper. Their policies towards an ethical performance along the whole supply chain are very well explained, but less effectively achieve. The concerns go further the Foxconn scandal. The lack of good governance and strong institutions in where their operate added to the difficulty of control thousands of suppliers, relies high risk for Apple in terms of abusive labour practices and non compliance with law (the minimum).

It is true and fair to recognize the actions taken, such as trainings and audits, most of them done by a third-party (the Fair Labour Association) for the identification of gaps and comply with their policy. Nevertheless, there is too much work to do, especially in relation to the commitment and empowerment of the problem, reflected in a better management system for the supply chain.

Apple has the policies (the frameworks), the information and comprehension about their impact on society. The main challenge (to not say problem) relies in the management of that impact. Using Porter’s definitions, Apple seems to have a “responsive CSR”; it means, “acting as a good corporate citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities” (2 ). In fact, Apple’s initiatives concerning the supply chain obey to the high-risk associate to its operation and also to the scandals and problems that the lacks of management result in. And this is essential for a responsible business.

Apple could have integrated CSR into its strategy. They are working on it (they are in the process), under this understating. It doesn’t mean that there are no challenges and things to improve.

In fact, they don’t seem to have CSR as add on, in the sense that they don’t develop any “social or environmental programme” outside from their business.
In this point, and before finishing, I want to point out a difference (appropriate to the case) between having CSR integrated into the strategy and strategic CSR.

There are many other issues outside the spectrum presented by Apple. For example, what is Apple’s social purpose? What makes Apple different from the other competitors besides very good-looking products and creative design? Integrating CSR into the strategy require not only a comprehensive and integral management perspective, also entails doing things different from competitors and create social value (strategic CSR). Maybe Apple gains in the product (result) differentiation (what we could see), but still be the same in the “hidden part” (social value of the product) than the rest of actors.

How to potentiate Apple’s products to promote social change? I mean to give to an iPad, for example, a different value, besides being a good for consumption. Technology is a vital tool for social change, for education and empowerment. What Apple can do about it? How to integrate these issues into their core strategy? Is it possible? Absolutely! If they could address this kind of questions; they could really make a revolution in the “CSR” arena as they did in the “consumption” arena. And here sleeps their main challenge and opportunity.

footnotes:
(1) Source Apple’s web page: www.apple.com/about/job-creation/
(2) Porter & Kramer. “Strategy and Society. The Link Between Competitive Advantage and Corporate Social Responsibility”. Harvard Business Review. December 2006.


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