Stakeholder analysis, Apple Inc

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Stakeholderanalysis, Apple Inc

Stakeholderanalysis, Apple Inc

AppleInc is arguably the most successful technology companies in theUnited States. The company specializes in the design, development andselling of computers, software, portable devices such as mobilephones and smart watches. The company also provides online servicessuch as iTunes, iClound, and App store. The company was establishedin the mid 1970 by Steve Jobs, together with Steve Wozniak and RonaldWayne. However, the over three decades of Apple’s operations hasnot been a walk in the park. The company has experienced severalfinancial and management challenges, just like any other corporateorganization (O`Grady, 2009). However, the launch of the iPhone, iPadand iPod in 2007 was an important breakthrough in the success AppleInc has enjoyed in the last few years. Apple Inc has been rated asthe largest phone manufacturer as well as largest technology companyin terms of revenue and asset. It is also considered to be thelargest public company by market capitalization, valued at over sevenhundred billion dollars. The company employs over one hundredthousand permanent employees and has about five hundred retail storesin over sixty nations around the world. Apple Inc has annual revenueof over two hundred and thirty billion dollars (Lusted, 2012). Thesuccess of Apple Inc has been attributed to the important role of allstakeholders. The company has a highly dedicated team of employeesand enjoys a significantly high brand loyalty and recognition. Somereports have rated Apple Inc brand as the most valuable brand in theworld. However, the company has experienced some challenges andcriticism, especially how it relates with some of its stakeholders.

Theoreticalmodel

Inany business organization, acknowledging individuals, groups ofindividual and entities that have an interest or investment in thebusiness organization operations is critical. This constitutes thestakeholders of the organization. Stakeholders are individuals,groups and entities who have a direct impact or are affected directlyby the operations of the organization (Avetisyan &amp Ferrary,2013). Apple Inc has been partly successful on how it has been ableto satisfy the needs and demand of its stakeholders. Due to itscorporate social responsibilities as well as relations with bothinternal and external stakeholders, Apple Inc can be considered to bea fairly good corporate citizen. Different groups of stakeholdershave diverse needs and demands that have direct impacts on thecorporate social responsibility and the overall operations of theorganization (Aguinis &amp Glavas, 2012). This has important impactson the performance of the organization. When the high value of AppleInc brand recognition and loyalty is considered, taking care of theinterests of all stakeholders that have a direct impacts on theoperations of the organization are important aspects of the corporatestrategies and policies formulation and implementation. Consequently,Apple Inc stakeholders concerns includes the quality and functioningof the products, sustainability of its business activities,employment and labor relations and the financial performance of theorganization.

Internalstakeholders

Internalstakeholders refer to all individuals and group of individuals whohave a direct impact on the business organization. For example,people who work or invest their resources for the success of theorganization can be considered to be internal stakeholders. Theyinclude owners and investors who are interested in earning incomefrom organization by maximizing the profits, as well as managers andemployees who work for the organization to earn an income in terms ofwages and salaries (Freeman, 2010).

Employees

Employeesare internal stakeholders because they work for the organization.Employees work at different levels. Although this is considered theresponsibility of managers and directors, some employees are a taskedwith the responsibility of making decisions that have a direct impacton the performance of the organization. Nonetheless, the action orinaction of every employee has an impact on the performance of thebusiness organization. There are specific needs, drivers andinterests that define the relationship between a businessorganization and its employees. Employees need fair wages andsalaries, job security, career development, recognition and asupportive working environment (Jonker, 2006). Employees also needsafe and healthy working environment and ethical treatment by theorganization. An organization that takes care of the welfare of itsemployees has a robust human resources management policy that ensuresthat the employees are proud to work for the organization. Forexample, ensuring that salaries and wages are competitive andindividual needs of the employees are met. Employees have a hugeinfluence on the success on a business organization. Human labor isone of the most important resources in an organization. Abnormallevels of employee turnover, especially if the affected employees arehighly skilled employees (Friedman &amp Miles, 2006).

AppleInc considered its employees as an important resource critical forsuccess. According to Apple Inc corporate social responsibilitystrategy, employees constitute the second priority. This group ofstakeholders constitutes all employees in Apple Inc facilities andretail stores country wide. The most important stakeholder interestis competitive compensation and career development. The ability ofApple Inc to innovate and develop products as well as sustain itsbusiness is directly influenced by human resources capabilities. As aresult, Apple Inc has one of the best human resources management andemployee compensation policies in Silicon Valley (Backer, 2013).However, there are some isolated cases of labor relations conflicts.For example, there have been some allegations that Apple Incfactories mainly in china have harsh and unhealthy workingconditions. However, it is important to note that majority of theseconcerns do not affect employees directly employed by Apple Inc butcompanies contracted by Apple Inc (Gillam, 2012).

Managers

Althoughmanagers are also considered to be employees, due to their role inthe decision making process, they have a different level of needs,interests as well as influence on the performance of theorganization. Like other employees, managers require goodremuneration, good working environment, job security, ethicaltreatment and career growth. They also need empowerment andauthority, flexible working environment and participative management.The needs of the management team are more critical because they havea higher impact on the performance of the organization. For example,a senior manager in research and development can have a criticalinfluence on future business in an organization. Thus, theprofitability, growth and survival of a business organization aredependent on how it deals with this group of internal stakeholders.They are tasked with fulfilling the objectives and projects in theorganization. Their level of motivation influences how the businessorganization relates with other stakeholders. Apple Inc is able toattract and retail top executives and managers in the technologyindustry, mainly due to the pride and satisfaction associated withleading a successful organization. Additionally, the companyrecognizes the important role of this important group of stakeholdersand thus ensures that they enjoy working for Apple Inc (Isaacson,2011).

Owners

Theowners are also important internal stakeholders. They are internalstakeholders because they own the business organization and havedirect influence on all decisions and the relationships between otherstakeholders and the business organization. The owners oforganization main needs include good reputation and profitability ofthe business (Roeder, 2013). Apple Inc is a public owned company.Being a largely profitable organization, the organization has beenable to effectively meet the needs of the owners.

Externalstakeholders

Externalstakeholders refer to individuals, groups of individuals and entitiesoutside the organization that have an influence or interest in thebusiness organization. Although are not directly involved in the dayto day running of the organization, they have an influence on howdecisions are made and the performance of the organization(Ditlev-Simonsen &amp Wenstop, 2013). Some of the most importantexternal stakeholders include customers, suppliers, immediatecommunity, government institutions, creditors and shareholders.

Customers

Customersare not involved in the day to day running of a businessorganization. Thus, they are external stakeholders. Customers referto individuals and entities that buy the organization’s products.Customers can either be intermediary customers or end customers.Intermediary customers assist the business organization in reachingthe end customers. They include agents, retail outlets anddistributors. Some of the needs and interests of intermediatecustomers includes efficient and ethical relationship and tradepractices, sales support (for example, reliable supply, promotionalsupport and product training) and mutually beneficial relationshipwhere both the producer and the middle man benefits. There areseveral benefits that an organization can derive from thesestakeholders. This includes good customer delivery systems, brand andproduct promotions and adequate channels for customer feedback. Theend customers refer to the final user of the organization product.The specific needs of these stakeholders include quality products andexperience and value for money. This group of stakeholders is themain focus of all business activities in an organization. They arethe source revenue through sales and their feedback is critical indevelopment of new products or improvement of existing products(Roeder, 2013).

AtApple Inc, all the organizational goals are geared towards meetingthe needs of its customers. Thus, the customers are the top priorityin Apple Inc corporate social responsibility policies and strategies.This group of stakeholders buys and uses Apple Inc products andtherefore directly impacts on its performance and revenues. The maininterest of Apple Inc customers is value for their money throughquality and effective products and reasonable prices. It is importantto note that Apple Inc products are relatively expensive, mainly dueto their quality and the targeted customers. However, due to factthat Apple Inc customers are able to get value for their money, thepremium price strategy has yielded good result. The value place oncustomers by Apple Inc is also manifested through the strong brandloyalty and recognition in the market. To effectively address theneeds of this important group of stakeholders, Apple Inc haseffective and efficient customer care centers which enhances theability of the organization to deal with customer feedbacks. SinceApple Inc sells its products mainly through its own retail outlets,it has limited issues related to intermediate customers. Nonetheless,efficient and effective coordination between different departments isessential for the proper functioning of the retail outlets, which actas intermediate customers and the contact between end customers andthe company (Lashinsky, 2012).

Suppliers

Suppliersare also important external stakeholders in the operations of abusiness organization. They provide raw materials and other non humaninputs that are necessary for the effective functioning of theorganization. This group of stakeholders has a direct impact on theoperation and success of the organizations. For example, suppliershave an influence on the quality of raw materials and deliveryschedules. Some of the needs and interest of suppliers in a businessorganization includes clear and reliable orders and materialspecifications, timely payments, fair and ethical practices inawarding contracts, good working relationships and increased businessopportunities. The good relationship between Apple Inc and itssuppliers is one of the most important ingredients for success. Thisis based on the view that Apple Inc will not be able to provide itscustomers with quality products if the suppliers do not play theirroles. For example, ARM is the most important supplier in Apple Incsupply chain. The good relationship with the chips supplier has ahuge influence Apple Inc operations and success (Lashinsky, 2012).

Society

Anyorganization operates within a society, making it an importantcorporate member of the society. The immediate society in which anorganization operates has a huge influence on its operations. Therelations between the organization and this important stakeholdershould be ethical and guided by the moral principles within the givensociety. Some of the interests and needs of the society in a businessorganization includes access to products and services produced orsold by the organization and access to employment and economicopportunities (Greening et al, 2012). The organization should also beable to provide affordable goods and services to the community. Inthe modern business environment, the impacts of business activitieson the natural environment and ecosystems have become an importantconcern. A socially responsible corporate organization adoptsbusiness activities and strategies that minimize harm to theenvironment. For example adopting environmentally friendly sources ofenergy, use of biodegradable materials, and recycling packagingmaterials are some of sustainable practices that can be adopted by abusiness organization (Garriga &amp Mele, 2013).

AppleInc has expressed its commitment to the welfare of the society andcommunities in its operational areas. The company provides employmentto members of the society, directly or indirectly. The company isinvolved in a several charitable activities as part of its corporatesocial responsibility. The aims of these activities are giving backto the society. A good example is the partnership between Apple Incand Product RED camping in 2004, which was aimed at preventing motherto children transmission of HIV. Apple Inc also makes generousdonation to charitable organizations such as Red Cross towardshumanitarian aid. Additionally, in recent past, Apple Inc hasexpressed its commitment to environmentally friendly practices byadopting the use of 100 percent clean energy and elimination of PVCand BFRs in its electronics (Hasan, 2013).

Government

Thegovernment is another important stakeholder in the operations of abusiness organization. Usually, the government set the rules of thegame in the business environment. It ensures that all corporateorganizations operate within the set rules and regulations. There areseveral levels of government, mainly local or state government andfederal government. The government impacts on business activitiesthrough legal guidelines, statutory requirements and law enforcement.Some of the most important interests and needs of the government as astakeholder in business activities include corporate taxes, healtheconomic and business environment, compliance of the legal provisionsand regulations, annual returns and community support throughemployment and provision of goods and services. The government has ahuge influence on business operations through enforcement of the law,taxation and a strong bargaining power by the virtual of being alarge customer (Schibi, 2014). The government has a huge influence onthe business operations of Apple Inc. The fact that apple hasoperations in different nations means that the company operationshave to adhere to different levels of government regulations.

Creditors

Creditorsas stakeholders in business organization include financialinstitutions and lenders who provide credit to business organization.They have an important influence on the operation of businessorganization by enhancing the liquidity of the organization. Some ofthe needs and interests of this group of stakeholders includeinterest of credit, return on investment, financial stability andstrength to finance the credit, and mutually beneficial relationship.Creditors can influence business organizations operations byproviding short term and long term finances necessary for businessoperations and development (Cole, 2007).

Shareholders

Shareholderor investors are some of the most important most importantstakeholders in business operations. Shareholders invest theirresources in the organization, but may be directly involved in thebusiness operations or be an external stakeholder. The interest ofshareholders in the operations of a business organization is returnon their investments. Being the owners and financiers of theorganizations, they also have the right to demand for corporateaccountability and transparency in the organization. They also have adirect impact on strategic plans of the organization, includingdiversification, mergers and acquisitions (Schibi, 2014). Theinterests of investors and shareholders in Apple Inc are maximizationof profits. The company has been able to meet the needs of theshareholders by maintaining a strong financial performance over theyears. Apple Inc is the most profitable company in the world, whichgives the shareholders value for their investment (Isaacson, 2011).

Stakeholderanalysis

Powervs. interest matrix

Oneof the methods used in the in the analysis of organizationstakeholders is the power interests matrix. The matrix is used in thedevelopment of management and strategic plan to satisfy thestakeholders’ needs and interest and maximize the benefits to theorganization. Stakeholders placed in group A and group B are theeasiest to deal with because either they have low interest and lowpower or low power and high interests. The low power characteristicof these groups makes their influence on the organization relativelylow. However, groups with high power are more difficult to deal withbecause they have an influence on all aspects of the organization’soperations (Friedman and Miles, 2006). Examples of low powerstakeholders in the case of Apple Inc may include suppliers andlenders. Customers and the government have high level of interest butlow power. On the other hand, managers, employees and owners may havesignificant powers and interest and therefore more critical inmanaging their expectations.

Influencevs. importance matrix

Influencevs. importance matrix can also be used in the analysis ofstakeholders. Stakeholders in section A have more influence on theorganization and have importance in the success of the organization.In the case of Apple Inc, this may includes the managers andemployees in the organization. Stakeholders in section B areimportant for success but have less influence. This group may includecreditors and suppliers. Group C has high influence but have lowimportance. This may include some members of staff who goals are notaligned to organizational goals. Group D are low prioritystakeholders with low influence and low importance. This may includesome members of the society who are concerned with aspects that donot affect the organization directly (Michael and Don, 2005).

Stakeholders’expectations

Allstakeholders in an organization have expectations and needs.Depending on their influence and importance, the organization shouldalways strive to meet these needs. The effectiveness of anorganization to manage the expectations and needs of its stakeholdersdefines it success or failure (Davis, 2014). Management of theexpectation involves influencing the desires and negotiating withstakeholders to ensure that they conform to organizational goals. Forexample, providing critical information to the stakeholders increasedtheir level of positive influence and material or non materialsupport in the implementation of the program. Management ofstakeholders’ expectations and needs also involves resolving someof the conflicts that are likely to arise (Dhaliwal et al,2011).Apple Inc has done relatively well in the management ofstakeholders’ interest, expectations and needs. It is considered tobe one of the most successful companies in the world due to itsability to satisfy the needs of its stakeholders. The customers,owners, employees, managers, suppliers and the government aresatisfied with the performance of the company. However, there areopportunities for improvement in Apple Inc operations. One of theareas that may require some improvement is labor relations in AppleInc supply chain. Some of the suppliers and contractors associatedwith Apple Inc have been accused of bad labor practices resultinginto unmet expectation of the workers. Although Apple Inc does notemploy these workers directly, it has the power to impose high laborrelations standards in the supply chain (Zylla-Woellner, 2013).

Strategicimplementation

Usually,the role of management is narrowly interpreted to mean maximizingfinancial returns, higher divided and capital gain. The management,especially the board of directors has a legal responsibility ofrepresenting the interest of all stockholders mainly because theyprovide capital invest to the organization. Nonetheless,organizations have expanded the role of the management to include theinterest of other stakeholders such as the community, employees andthe environment. The stakeholders have specific interests andexpectations from the organization. Managing the relationship withthese stakeholders is as essential aspect of strategic management.This is because each stakeholder or group of stakeholders has animpact in the success of the organization. This means that theirexpectations, interests and influence have a direct or indirectimpact on the overall performance of the organization (Barnat, 2014).

Conclusion

Thesuccess of an organization is rated in terms of how it is able tomeet the interests of the different stakeholders and manage theirinfluences. This includes both internal stakeholders and externalstakeholders. While some stakeholders have huge influence and poweron the organization, others have are more important and interest inthe activities of the organization. Apple Inc is one of the largestcorporate organizations in the United States. Due to its relativesuccess, compared to other corporate organizations in the modern era,it can be argued that the company has been able to effectively handlethe expectations, interest and influences of different stakeholders.

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