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Apple Inc Business

Apple Inc Business

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Apple Computer Inc. or Apple Corporation is a multinational company founded in America. Headquarters of the company are situated in Cupertino, California. Apple focuses on producing computers and software of good quality; the company works on designs and other developments; it also sells personal computers, consumer electronics, and computer software. The most popular products of the Apple Inc. are its line of Mac computers, iPhone, iPod, and iPad. As for the software, the most popular ones of the Apple production are the iTunes, the OS X browser, and the iOS operating system. Steve Jobs, Steve Wozniak, and Ronald Wayne founded the company in 1976, 1 April. Later in 1977, 3 January, it was registered as Apple Computer. At the beginning, the main intention was to produce computers. The first personal computer without programming language at all was developed exactly by Apple Corporation in 1984 and got a name the Macintosh. Later in 2007, the company made an intention to produce smart-phones; thus, the word computer was taken off from the name of the company. Those smart-phones were named iPhones and have become the most popular brand of cell phones nowadays. After Samsung Electronics, Apple Inc. is now the second biggest IT company in the world by the revenue. Till the end of 2012, Apple had approximately 400 retail stores in 14 countries. In 2013, the company was estimated to be worth 414 bln USD. In September 2012, the total number of full-time employees was 72,800.

Apple’s Compensation Strategy

Apple has a special agency, which is responsible for all the concerns regarding compensations. This agency is called the Compensation Committee and is constituted as a board of directors. Generally, the Committee consists of three members for now they are Messrs. Campbell, Drexler, and Gore. In should be noted that the company tries to be clear in the compensation plan. The Report of the Compensation Committee of the Board of Directors on Executive Compensation is in the free access so that everybody can get familiar with many details about the certain area of a companys work. All members of the Committee sign the agreement, which forbids them to deal with any members of other companies from the similar committee. It was observed that in the Chinese branch of Apple, employees work in a very hard regime (Chamberlain, 2011). This wording addresses the fact that some employees work even up to 98 hours a week, which is, of course, inappropriate. Still, there are many young people looking for a job in the company just because Apple is a well-known brand in the whole world. It is considered to be cool to work there.

It is known that Apple is the first company, which was recognized as a Fair Labor Association all over the world. It is considered that Apple deserves that honor because of its compensation policy and other concerns of its workers. The following facts serve in support of this claim:

All employees have a right to buy (as well as sell) company stock

Those employees who want to buy some Apple products will get a discount

The salary in the company is always above the minimum

The company provides good benefits for retailers (Segal, 2012)

Apples Best Practices

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Apple sticks to a rule to respect employees, customers, suppliers, and others; the company has made it the basic principle to respect laws, regulations, and honesty in all cases. Apple has the best external and internal practices. The formers are not using one’s position at the company for the benefit of oneself, family members or significant relation because it may lead to the conflict of interests. It is prohibited for all workers to use any invention of the company with the intention to get profit of it. Also, they are not allowed to be in charge outside the business. The information about stock selling and buying is secret, and no employee has a right to publicize it. The company also controls all cases related to all kinds of abuse such as discrimination based on skin color, ethnicity, and gender as much as it can be possible. If any party gets some information about money laundering in the company, it should report about it to the supervisor or legal department of Apple.

The Apple Inc. is known to be not tolerant at all towards any kinds of corruption. Due to the policy of external communication, the company bans any gifts from the outside, both giving and receiving, no matter whether it is an official gift from the government or the gift for a special flavor. Apple has an Anti-Corruption Policy in order to prevent any forbidden actions. In case the company has any deal with the government, it has to be done only in the presence of the legal department of the company. The company also provided The Apple Workplace Violence Policy, which includes all requirements and recommendations of how to make a workplace comfortable, healthy, and safe for employees as much as possible. The company motivates its workers to take part in charity through the Apple matching program to bring in non-profit organization of their choice. In addition, the company sticks to the laws and suggests all employees to behave in a manner that can bring a benefit for the community.

As for the corporate governance, due to the corporations policy, the majority of the board includes independent directors who meet or even exceed independent requirements of the National Association of Securities Dealers Automated Quotation (NASDAQ). The company has a rule according to which any director who is the CEO in the company cannot serve as a director in more than two other companies. All stakeholders constantly get relevant information. Directors are allowed to talk to all employees in order to receive additional information of a subject. The board of directors of the Compensation Committee estimates the performance of all executive officers. This includes the CEO directors as soon as their performance helps to review successful planning.


The company faces several challenges related to a compensation strategy. As stated earlier, the company sees its customers like kings and tries to fully satisfy their tastes for technology. At the same time, when the company focuses on its customers, it turns a blind eye on its employees. Running for the best customers reviews, the company does not try so hard to satisfy its workers; working in the uncomfortable environment, they bring a great revenue meanwhile their salary does not match that profit. This results in a massive turnover in the company. It was noted that while employees earn the possible minimum salary, the CEO gets a not comparable payment. The salary of employees is very low. Because of this, many employees quit working at the company. Still, many people, especially youth strive to get employed at the Apple Inc. because it is a cool thing to work there. It is ironic how the company spends a lot of money to replace and train new workers but pays such a low salary. Another challenge Apple faces is a depraved reputation. The company has undergone many investigations related to the compensation strategy. The bad thing is that those investigations were recognized as the truth. Earlier, the company was in the lawsuit for underpaying its employees (Liedttke, 2013).

Positive and Negative Impacts to the Apple Inc. and Its Stakeholders

The compensation policy of the company has both negative and positive impacts on its stakeholders. The main details of the great mechanism that brings such big revenue are Apples workers. That is why such participants as software engineers and top executives receive a nice salary. That negatively affects the rate of retention at the company. All listed workers have made the company a game changer since it provides better products. Customers get products and services which reflect almost all their expectations. The company feels confident with taking young employees. Most of these people do not have family responsibilities which is why they do not mind working for Apple for the low salary. Additionally, the youth considers that the name of the company in the resume can positively influence their career. That is another reason why more and more young, talented, and spirited people who bring generous profit to the company and its stakeholders are hired by Apple.

As for negative impacts of Apples compensation policy, there was a case when Apple has denied that one employee has made away with himself because he was forbidden to leave. The case took place at Fixlink, which is an Apple provider in China. The employee has been working for 15 hours, and the company was denying him to leave. Relatives received their compensation but it was smaller than they asked. This is one of many cases when the company uses compensation policy unfairly. On the whole, the company would be more successful if it takes its workers seriously and pays them fairly.

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Effects of Labor Laws and Market Factors

It was noted that Apple has violated laws of labor, mostly in continent China. In Foxconn Employees, Vereen reported the fact that they work for more than the specified 49 hours (2013). When this information got to the public, Apple has had to take the responsibility. Most of the companys employees have reported an increase in wages. That case has brought effective result.

Gupta (2011) stated that the workers union of the Apple Inc. is not official. It was brought to the public for a purpose of getting a better salary, but it failed because the case was not vocal or made official. However, one of Apple founders who have left the company later stated that the union was working effectively and helped to provide a better working environment and salary. Market factors had a much less influence on Apple. Company still enjoys a groundbreaking success. To remain a competitive company, Apple comes up with many technological innovations and changes to keep in line with times. However, the company puts to the highest priority to the questions of customers taste, industry rate, and the changes in payment. The company needs to provide the compensation policy that will comply with market factors. All giant industries attempt to make a minimum wage in the company just a little higher than the stipulated minimum. That is not an option for Apple.

Effectiveness of Traditional Bases for Pay

Due to the traditional conception of pay, the compensation is the base of the salary, and the bonuses are available only for executives. Apple provided a pay plan for all its employees based on the fixed benefits. Now, in addition to the fixed salary, executives can get different kinds of reward such as annual incentives and flexible benefits. Executives salary also depends on their knowledge and skills. All salary details are represented by the companys total rewards approach. This shows how the company improved the traditional pay system.


In conclusion, it is clearly evident that Apple is a revolutionary, not ordinary company. It has changed the worlds view on technologies. All evidence point to a bright future of the company. There is no doubt that its principles and policies are magnificent. However, there are several problems with their system of compensation and practices as it was shown above. The company should pay attention not only to developing, expanding, and raising profit. The most important parts of production are employees. In other words, Apple Inc. should retain employees for a long period and invest more into work force.

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