responsibility conditions, Apple effectively satisfies the interests of investors as stakeholders.
Employees of Suppliers and Distributors. Workers in Apple’s supply chain are also significant considerations
in the company’s corporate social responsibility efforts. These workers are indirect stakeholders in Apple’s
business but determine the firm’s corporate social responsibilities. The main interest of this stakeholder group
is similar to the interests of Apple’s own employees, such as proper compensation and job security. Also, this
stakeholder group is interested in ethical employment practices. To address these interests, Apple has a
Supplier Code of Conduct. The company monitors and imposes requirements on the employment practices of
firms in its supply chain. Part of Apple’s policy is to terminate business relations with suppliers that continue
to fail or refuse to satisfy this Code of Conduct. Apple’s 2014 assessment of suppliers shows that 92% of
suppliers now comply with the 60-hour workweek rule
[6]
.
Sustainability is not an asset that can be bought or sold; rather it’s becoming an integral part of many a
company’s philosophy. Just as company management practices influence business value, so do sustainability
initiatives. Therefore, the question is: How does it create value?
incorporating sustainability as a business
practice will not only increase companies’ brand value, but also guarantee a long life for the business.
Let’s take a sector for which sustainability is a big issue: automotive. Companies such as Honda recognized
that mineral fuels are limited, and prices of petroleum are rising. This motivated it to adapt its product range to
fuel-efficient cars. Honda was one of the first movers in this direction and this is paying dividends today. It
was the only car manufacturer to report better US sales in June 2008 than in June 2007, credited to fuel-
efficient Civics and Fits. While reducing dependence of gas-guzzling cars and increasing the number of fuel-
efficient models became a “must do” in the automotive sector, Honda was first to differentiate and is ahead of
the debate. This leading behavior contributed to an increase of 28% in Honda’s brand value since 2004
[7]
.
G2:
Have these CSR problems at Apple had a meaningful impact on the bottom line?
Can you think of
other examples where it has?
What is the difference?
JUSTIFY YOUR ANSWER WITH DATA
CSR does not have much influence on Apple’s profits. From exhibit 1, Apple’s net sales kept yearly increase
during the period from 2008 to 2014, although net income slightly decreased in 2013. It ranked highly among
companies in recent years, and still has unshakable customer loyalty.
Table 1: Foxconn’s sales and gross profit, 2008-2016, in US$ millions
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
sales
4879
4847
4699
4338
4604
3172
2649
3026
2476
Gross
profit
412
401
510
389
482
404
482
497
451
Source: mergent online database
Compared to Apple, it seems Foxconn suffered much more from human rights violation. According to table 1
above, Foxconn’s sales met an obvious decline since the year 2013, and sales after the year 2012 is almost half
of the sales before the year 2012. CSR has had a meaningful impact on Foxconn’s bottom line.
