Corporate Social Audit: The Apple Company, Essay Example

Introduction

Corporate social audit involves the assessment of the performance of a company as it takes care of the social responsibility. It involves the consideration and evaluation of the balance between environmental plea and the performance of the business. Ethical auditing, on the other hand studies the values linked to the approaches and measures employed in a business to meet the goals and expectation of major stakeholders. Companies had self-interests until the public, consumer, community, and employees demanded ethical and responsible behaviors from them. Corporate social audit evaluates the extent to which companies have provided and employed the ethical responsibilities demanded by non-stakeholders (Libby and Thorne 493). This paper aims at giving a report of the corporate social audit of the Apple Company.

Scope of the audit

Apple Company is a global technological firm that produces electronic gadgets and consumer electronics. It virtually serves everyone in the world as approximately 80% of the entire population in the world owns a phone, a computer, an iPod, or an iPad, all being products of the Apple Company. Being an outstanding company, flourishing, and with a share price above $339.87, Apple company is bound to challenges, especially from competitors. It is the one of the world’s most admired companies, thus many companies have reportedly tried copying their model. Competitor companies would wish to copy their products, customer and employee services, thus Apple has no choice but to sue them (Apple Inc. 2). Others companies could also file allegations against the company with the aim of bringing it down. We would like to assess the internal and external relationships, the level of truthfulness, care, honesty, loyalty, and integrity of the Apple Company. We would wish to discuss how employees at Apple Company regard themselves and how satisfied they are on the way they are treated. The company’s culture, ethical policy, and programs carefully studied, evaluated, and assessed to help in the corporate social Audit. Any court cases over ethical issues affecting the company now or previously viewed, and how the company dealt/ deals with the issue. In summary, this paper discusses the sustainability, employee rights and ethics, product liability, patent, privacy, and the legal issues affecting the Apple Company.

Discussion of results and findings

Apples ethics policy, programs, and culture

Apple ensures that all their employees display excellent conducts in all situations. To achieve this, they rely on four major principles of confidentiality, honesty, compliance, and respect. Apple has a code of business conduct that is applicable to all its business operations in the main branch and all other branches worldwide. Any person associated with Apple Company in one way or another can access the policies with regard to corporate governance, be it conflicts, or any form of questionable misconduct. Apple Company possesses a business conduct helpline, where employees report and mishandling or misconduct to their Audit and finance committee. Apple also has a Suppler Code of conduct that protects the suppliers from any harassment with respect to the cost of supplying products. It releases a supplier responsibility report annually that guides the suppliers on what expected of them. To embrace all these regulations, Apple Company has prewritten disciplinary actions against any company, factory, individual, and employees found guilty of violating its ethical policies (Libby and Thorne 488).

Apple Company has a unique culture based on corporate evangelists who promote their products. The evangelists advertise or rather ‘spread the message’ in favor of Apple as a company and its products at large (Nilofer Merchant 2). Out of this, customers are convinced to be loyal customers and eventually they become evangelists of the Apple Company.

Employee ethics

All employees of the apple company treated in a mannerism that makes them feel their importance to the company. Ideas from any employee regardless of the position he/ she holds debated until an agreement reached. This approach has enabled employees feel a sense of loyalty to the company. Apple Company offers a stable and comfortable working environment for its employees, where employees focus on doing things the right way. Employees do not necessarily adhere to the normal work environment where a worker’s aims at trading their time, they instead aim at trading their services to the success of the company (Apple Inc. 1).

Product liability and quality

Apple’s products have a brand image that assures product quality. With so many emerging companies trying to copy the model of the Apple products and electronics, the brand is what differentiates their products from rest. Upon purchasing an Apple product from their outlets, a customer allowed to test the working condition of the product. There is a special station where customers test and experiment their products. There are also specially trained personnel in those stations that give highlights to the customer on how to handle the equipment, how to use and maintain it. These employees trained mainly as sales person with the convincing power. They can answer all the customer questions intelligently and influence the served customer have a reason to come back again On top of it, all Apple Company products accompanied with a warrant of a specified period.

Patent

Again, for security purposes, Apple Company makes its activities confidential. It protects its technology and innovation from theft. Patent protection has led apple to file laws suits against companies as Samsung and HTC Corporation. These and several other companies sued for copying the physical or internal features from the Apple Company.

Sustainability

Apple has positive reports of concern for the environment. They ensure their products are free from cathode ray tubes with lead, which present an environmental hazard. Their products made with non-toxic chemicals, for example, the iPods made from LEDs that do not contain mercury, instead of fluorescent lambs. The company has also identified the issue that people have in upgrading their systems, once a new technology enters the market. Disposing off the old equipment leads to environmental pollution. They have thus developed a way of coming up with recyclable materials. In fact, they have a program where people trade off their old mobile phones, iPods, and computers and other electronics. They then obtain a 10% discount on their new products. Some receive gift cards in return. Despite that, many consumers throw away their old equipment’s since they feel the incentives Apple Company offers are not worthy.

Court cases over ethical issues of the Apple Company

For an intellectual company as Apple, the issue of other companies desiring to steal their ideas is at hand. A case arose between Apple Company and Franklin Computer Corporation in 1982. Apple Company sued Franklin Computer Corporation for formatting the ROM and operating systems of Apple II to run on their computers. This is illegal, but at first, Franklin computer corporation lawyer won the case as he argued that computer programs had no copyright law. Later on Apple Company won the case when the courts identified that the copyright law protected programs and codes.

Microsoft marks another great competitor of Apple Company. The Apple Company licensed an agreement with Microsoft to release windows 1.0. However, Microsoft went ahead and released windows 2.0. Apple Company alleged that the agreement only covered the release of windows 1.0 and not windows 2.0. Apple Company lost the case as the court said that Microsoft did not go against the copyright law.

Another incidence of lawsuit occurred when Cisco systems sued Apple Company for infringing into their iPhone trademark in 2007. Cisco systems were the legal owners of the trademark as they had used it since 2000. Apple Company had interests in using the trademark and had earlier requested Cisco for the same, but before an agreement arrived at, Apple Company went ahead and used the trademark. This marked a deceptive and controversial approach by Apple. The lawsuit ended where Apple Company and Cisco agreed to use the iPhone name.

The other case that ended up favored Apple Company unfairly involved the domain name iTune.co.uk. Ben Cohen had registered the name in 2000 to redirect users to other sites, and eventually to Napster site, which was a competitor of Apple Company. Apple felt unsafe and thus tried to purchase the domain name unsuccessfully, thus appealed to the UK registry. For unknown reasons, the case favored Apple Company and accused Ben Cohen of abusing registration rights and taking advantage of the Apple Company. This clearly showed how Apple Company gained favors against small companies. In the real sense, since Ben Cohen registered the domain name first, he has rights to it.

Comparing the Internal corporate audit and external corporate audit

The internal corporate audit form part of the Apple Company employee. They have reportedly given biased results of the corporate social audits of the Apple Company. They always give the positive side of the report i.e. the culture, employee rights, product liability, and the sustainability while not mentioning the negative side of it to the public. The external auditors also have positive results regarding Apple Company; however, in addition, they have the negative side of it. The court issues and the way Apple Company gains favors in court are still at question. The allegation regarding the domain name iTune.co.uk that rendered Ben Cohen guilty of abusing registrations rights stills have questions among the outside world. Those affected directly or indirectly do not take the other allegation regarding Cisco iPhone trademark lightly. There is also a privacy issue raised by the government regarding the phones that Apple Company manufactured. They possessed a feature that could collect information and data from their location. Upon the raising the issue, Apple Company argued that owners could disable the feature from their phones. However, this was their data collection mechanism since some of the phones still collected data after the disablement of the features.

Recommendations

It is not fair at all when a big company as Apple goes against an individual’s invention. Due to its power and fame, it takes advantage of Ben Cohen, for example, and wins a lawsuit against him for a domain name. Apple Company itself has filed laws suits against Samsung for copying the iPhone and iPod design. It has also sued HTC Corporation, which is a Smartphone manufacturer for replicating features protected under its patent. It is not ethically right for Apple to take its monopolistic, power and competitive advantage to step on the heads of other small companies or individuals who try to come up. It should instead help these persons and companies rise up to advantage the entire information and communication technology worldwide.

Apple Company should take the privacy issue seriously. If the customers were not satisfied with the technology then the ethical approach to the problem would be abolishment of those phones. It is not ethical to infringe into private matters in the name of collecting data. The Apple Company would rather find other suitable methods to collect any relevant data of their interested. It should not necessarily wait for the government to pass legislations on phone privacy.

The courts need be fair in passing judgments. They ought to call a spade a spade. It is an ethical misconduct to judge unfairly simply because one side is loaded with power. These judgments ‘kills’ the morale of the researchers down there who would wish to invent some technology. A less powerful person would prefer to remain underground and burry his/ her intelligent brains instead of coming up, only to end up ‘fighting’ with Apple Company and loose the battle.

Apple is trying to reach its sustainability with regard to the environment, which is recommendable. However, it reported that a greater percentage of persons prefer to dispose off their old equipment rather than taking the agony of transporting them all the way to the site of the Apple Company recycling Program site. Probably the incentives 10% discount of new purchases or gift vouchers) are not pleasing. The Apple company could increase their incentives or find newer ways to reward their loyal customer who ‘move’ with technology.

Conclusions

Corporate social audit is a very important procedure for any company in evaluating its ethical performance. Social auditing procedures offer a company with results helping them makes strategic planning and management. The company’s weakness as identified by the external corporate audit results enable the top management team to views the company image from the public and the employees (Guy, Carmichael, and Lach, 89). It identifies what the public expects of the company in terms of its economy, legal issues, ethical issues, social, and philanthropic responsibilities. Problems to do with communication and employee relationship easily identified, then ways to solve them employed. The company is able to assess the effectiveness of their programs, poles, and policies. It is in a position to identify potential risks with respect to the law, competitors, and thus develop approaches to the same just in case they arise. The Apple Company, in this case will have to find ways to deal with its monopolistic and power advantage that domineers and extends to the courts.

Every company ought to carry out a corporate social audit at least once in a year. Corporate social auditing is a practice that is just as important as any other procedure that runs towards the success of the company. Without it, a company could end up collapsing without having a second chance of improving on its weakness, which possibly was solvable.

Work Cited

Apple Inc., Business Conduct: The way we do business worldwide, 2010, 7 June 2011. <http://files.shareholder.com/downloads/AAPL/1283312876x0x443008/5f38b1e6-2f9c-4518-b691-13a29ac90501/business_conduct_policy.pdf.>.

Guy, D. M., Carmichael, D. R. & Lach, L. A., The CPA Guide to Professional Ethics, New York: John Wiley & Sons, 2001.

Libby, T. & Thorne, L., ‘The Identification and Categorization of Auditors Virtues’, Business Ethics Quarterly, vol. 14 (3) (2004): pp. 479-98.

Marguerite Reardon &Tom Krazit, “Cisco sues Apple over use of iPhone trademark,” CNET News, 10 January 2007. 8 June 2011. <http://news.cnet.com/Cisco-sues-Apple-over-use-of-iPhone-trademark/2100-1047_3-6149285.html >.

Nilofer Merchant, “Apple’s Startup Culture,” Bloomberg Businessweek, 24 June 2010. 6 June, 2011. <http://www.businessweek.com/innovate/content/jun2010/id20100610_525759.htm>.