Let’s send Freeman to Apple


For the purposes of class assignments and in preparation for his lecture, I lately have read a lot of Ed Freeman’s publications about stakeholder management. When I watched Bucknell’s adaptation of “The Agony and Ecstasy of Steve Jobs” with a filter of focusing my thoughts on the actual issue rather than the play itself or Mike Daisey’s indiscretions, I found myself believing more and more in the thought leadership of stakeholderism. If we consider this case through the lens of the stakeholderism vs. shareholderism debate, it becomes very clear to me that a different managerial mindset for Apple would amount to a tremendous amount of value creation and satisfaction to so many more people.

To first consider the other side, I don’t think Friedman would condemn what Apple is doing. He would see them as simply pursuing maximum labor efficiency so as to minimize production costs and increase profit for the firm and its shareholders. Alleviating pressure on the workers to work so quickly and for so many hours would mean it costs just as much to produce fewer devices in the same amount of time, and would therefore increase costs to produce the volume required to keep up with consumer demand. That leads me to believe that, were Friedman to weigh in, he would see Apple’s strategy as justified.

Freeman, on the other hand, womaxresdefaultuld identify this situation as the exemplification of the toxicity of shareholderism. A strategy so clearly geared towards the financial profitability of the company at the expense of ethics is clearly not one of mutual value creation. This is what might conventionally be labelled a “business decision” that is considered to be independent from the constraints of morality, abiding by the “Separation Theory.” Jobs says in an interview during one of the “interruptions” that Apple’s labor conditions are not worse than those of others in their industry, but this should not matter. This pattern of injustice is the result of a pattern of keeping conversations of business and ethics separate, and resolving this injustice must therefore require their integration. Whether you consider these workers to be employees or suppliers to Apple (since technically they work for FoxConn), they still have a huge stake in the operations and ultimately the success of the company. Continuing to ignore the interests of the workers prevents the best solution from being made and does nothing to bridge the conversation between business and ethics, so no precedent will be set for ethical decisions to be made in the future either.

Not only is Apple ignoring the interests of these stakeholders, but I would contend that he’s also underestimating the interests of the consumers as a stakeholder group. Of course one of our interests is getting these products as quickly and cheaply as possible, but reducing us to that sole interest is incredibly myopic. This again brings up one of Freeman’s points that stakeholders have a variety of interests that they are willing to call to the forefront at different times depending on the situation, such that an effective solution may create value for them in one way even if not in another. A major concern of the consumers (that has become particularly obvious to me in our recent blog discussions) is feeling comfortable with where our products come from. After hearing Mike Daisey’s monologue, many of us expressed discord between loving our Apple products and having tacit intentions to continue to purchase them while simultaneously knowing the inhumanities that are behind its production, and this discord may even be enough to cause some of us to refuse to continue purchasing from Apple. If this is the case, then Apple’s narrow understanding of consumer values would actually cause them to lose business. For these reasons, I think Apple needs a serious lesson from Freeman in stakeholder management.

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6 responses to “Let’s send Freeman to Apple

  1. Even if concerned or troubled consumers don’t immediately burn their phones in an act of profound solidarity, they are troubled, as you say. Hence, their willingness to switch brands, to no longer “worship” at the cult of Apple, or to otherwise identify less with Apple could have longer-term impacts.

    One result of the stakeholder mindset you describe is also not waiting for negative results, but looking for ways to increase value to multiple stakeholders because it is the right thing to do.

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    • Exactly. A major component of the stakeholder mindset is bringing business and ethics into the same conversation so that a firm can generate solutions that create value for a diverse array of stakeholder interests. Making this integrated conversation the “norm” for a company’s decision-making will furthermore ensure that a structure and precedent is set in the company for the future. Rather than having to restructure to placate complaints or address negative effects, being a firm that is strong on both business and moral grounds (and having that reputation in the market place) has tremendous value. The more proactive the firm can be about considering stakeholder interests and creating value for them, the more successful they will be.

      And in response to your first comment, I of course did not mean to imply that Apple products are cheap, nor do they pretend to be. I meant “as cheaply as possible” in a sort of relative way- because although they are not “cheap” to purchase, it is reasonable to assume that if they cost more to produce then they would cost even more than they already do to purchase. Hopefully that clarifies my language, but my point that Apple assuming and operating under only this interest of consumers is narrow-minded and will ultimately be destructive, remains the same.

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  2. I really like your last sentence, “I think Apple needs a serious lesson from Freeman in stakeholder management”. I agree. As you brought up the point that Apple clearly does not listen to the workers at Foxconn who make their products, I questioned if there were other stakeholders that they didn’t really listen to? My question is, do they listen to their customers? I have a hard time answering this question myself. After all the readings we have had, it seems that Apple does not base their new design decisions on the current owners of the previous version of the iPhone, for example. Is this simply Apple’s version of the classic “Ignore Your Customer” marketing article? Or do they take the ignore your customer concept too far?

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  3. I think that your point when talking about the stakeholder theory and how they are ignoring the consumers interests as well is very interesting. The assumption is that we only care about getting products quickly and cheaply, but we definitely have more interests then that. As we talked about in class, Apple product users tend to be very concerned with helping improve the world (which is why they assume that Apple is the same way). Because of this, I think that Apple is the perfect company to make a big change in terms of their manufacturing. They already have a consumer base that would support the change, so why not just do it?

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