Creativity and innovation is a complex topic to define because it can be defined in so many ways from so many perspectives. Now with ethics be part of the discussion, creativity and innovation becomes more of a cultural and global issue.
Creativity and innovation of Apple and its business operations was discussed in the last blog. The last blog has inspired the group in a way that it has brought light into what processes Apple had in place for creativity and innovation, which compared to its competitors methods of inhibiting creativity and innovation. Our moral dilemma is the power struggle between the multinationals and apple, and whether this misalignment in power distribution in terms of market share had an influence on the processes of creativity and innovation of individuals and groups, whether todays businesses like apple can be considered as an ethical business.
Currently there is an unofficial media war between the 2 of the world’s most popular operating systems producers Apples Mac, and the Microsoft’s Windows family. Apple's popular commercials, launched in 2006, have painted the picture in stark terms: There are two types of people, Mac People and PC people.
According to their marketing strategies Mac users are positioned as trendy, modernized, casual dressed young people who use their computers for video chatting, music mash-ups and other cool, creative pursuits, while the PC is supposed to be used by more business suited users.
On the other hand Microsoft has also launched a similar advertising campaign, aiming on keeping its users share, and sending the message that you can use a Windows PC and still do cool and interesting things. Windows enthusiasts believe that Mac’s system is very limited in its abilities (Although, providing higher productivity due to the Windows overload with different types of useless programs), having a very user-unfriendly interface, and, one of the main problems by Mac unacceptance of the most of the programs, due to the fact that the overwhelming amount of new products is still written for the Windows interface; Therefore inability to do something serious on the computer. Hesseldahl, A(2009), Popular Mechanics (2009) & Intel (2009)
The funny fact is that both stereotypes are wrong. Throughout the last decade Mac Os has experienced a dramatically increase of its sales (Partially, due to the popularity of Apple in the other media related fields the IPod player, and the newly introduced Iphone) and gained a market share of over 7.5 percent. Hesseldahl, A(2009), Popular Mechanics (2009) & Intel (2009)
Apple is, in fact, the fourth largest computer manufacturer in the world. Macs are no longer just the computer choice of artists and unemployed writers. And now, more than ever, the guts of both platforms are remarkably similar. Intel processors are mainly used by the both of the machines manufacturers (although some PCs can be configured with processors from AMD). Memory, hard drives and graphics cards are purchased from the same small group of suppliers. Despite the fact that both operating systems are positioned as Yin and Yan, in terms of functionality they are extremely similar, offering the same range of built-in multimedia, Internet and productivity applications. Hesseldahl, A(2009), Popular Mechanics (2009) & Intel (2009)
However there are still a large of important factors to consider - Microsoft focuses the attention on the price of the computers with its OS, as well as well as being friendly with all types of machines, programs, and necessary devices. Apple, on the other hand, promotes the impressive productivity of its computers they are basically much faster and efficient than the computers with Windows, offering much more productive hardware, longer lasting batteries, and a better interface for creative users. Hesseldahl, A(2009), Popular Mechanics (2009) & Intel (2009)
Creativity is a very complex topic to define or discuss, because it can be talked about from so many perspectives and contexts. From a businesses point of view post industrial organisations today are knowledge based organisations and their success and survival depend on creativity, innovation, discovery and inventiveness. (Read, 1996). It changes the mindsets of individuals and their behaviours in a way that it is more of a tool for survival and existence, for innovative change. A company’s constant need for innovative change in this fast growing business environment has brought forward the importance of inheriting creativity in its employees.
Einstein writes “In my opinion, an autocratic system of coercion soon degenerates; force attracts men of low morality... The really valuable thing in the pageant of human life seems to me not the political state, but the creative, sentient individual, the personality; it alone creates the noble and the sublime,”
This is the foundation of our ethical dilemma in this blog. We want to analyse the creative and innovative abilities of apple and whether it’s systems or processes are ethical; Whether employees are forced to be creative and innovative, or if it was a natural process for the individuals. Whether the motivations behind being creative are ethical in sense that, trying to be creative to make products that makes money, is that ethical? Compared to being creative motivated by passion.
There is an article written on Microsoft being on top of the CSR index by Peggy Connolly (2009), in one paragraph it wrote “A company’s reputation today goes beyond products, services, and financial performance. Organisations face increasingly higher expectations from the general public across the different aspects of their business”. This in turn influences the process and actions of a company; something called “ethical business” is becoming increasingly important. So does it means the higher you are on the CSR index, then you must be an ethical business?
This is where partly the foundation of our blogs ethical dilemma, is whether large multinationals with more power leverage and market share are really ethical in terms of their businesses operations and processes. When we talk about ethics, it can be discussed in a number of ways, utilitarian, cost-benefit, relativist etc which will be discussed further. But for now, from a rational perspective, to define ethical is to look at the primary intentions behind the actions.
The main reasons a company would finance or inject money into CSR are Ethical Consumerism, Globalisation and market forces, Social awareness, Laws & regulations and Crises & their consequences. Gray, Owen & Maunders (1987) states “Taking responsibility for its impact on society means in the first instance that a company accounts for its actions; Social accounting, a concept describing the communication of social and environmental effects of a company's economic actions to particular interest groups within society and to society at large, is thus an important element of CSR”. The CSR index (Connolly, 2009) as mentioned earlier is study conducted by a Consulting firm “Reputation institute”, a pioneer in the field of brand and reputation management. The report states that the company aims to “allow clients to create tangible value from intangible stakeholder feelings”.
When we look and this and really think about it, the intentions of CSR is for company’s to account for the effects that have on the social and environmental at large. But company’s primary intention with CSR is to build their branding and reputation, As mentioned previously, the main reasons companies invest in CSR; Their goal maybe to take responsibility for their actions but ultimately the business is made to maximize profit and that is what it is made to do. Is this how businesses should operate? How does this influence the creativity and innovation of smaller businesses? If a company has the money to invest in CSR thus putting them highly ranked on the index, does that mean they are an ethical business? Does it make it right? It depends on how you interpret the words ethical business.
In relation to our ethical dilemma, business ethics overlaps with the philosophy of business. If a company's main purpose is to maximize the returns to its shareholders, then it should be seen as unethical for a company to consider the interests and rights of anyone else (Freidman, 1970) If company’s main purpose is to maximize returns to shareholders, then CSR can only be seen as a way for it to maximize returns for it to be ethical. As mentioned earlier company’s intentions or reasons for financing projects for CSR are Ethical Consumerism, Globalisation and market forces, Social awareness, Laws & regulations and Crises & their consequences.
Ethical Consumerism refers to the growing awareness of consumers on the environmental and social implications on the everyday items, the growing population along with the lack of resources; Company’s are aware of this growing trend which is why there is a growing need for company to change its practices to conform to the demands of the markets. Globalizations and market forces are more to do with gaining or maintaining market share, through increasing its reputation and branding through CSR. Social awareness is concerned with the pressures of it’s markets, the Non-governmental organizations in particular are taking a role in leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior which forces company’s’ to act and change. (Roux 2007) An example would be GovHK (2009) which is a government organization aimed at facilitating and enforcing CSR, some of their operations involve
Corruption prevention publication
Corporate involvement in community
Companies and organizations to join the senior citizen card scheme
Community investment and inclusion fund
Cleaner protection
Environment guide
Are businesses bound by the idea of just operating for profit?
A company should be viewed much like an education system, it is this idea of having a social structure and system that influences national level creativity, focusing more on the creation/education of knowledge, rather then focusing on what will maximize the profits. In a research paper by Robert Westwood and David R low (2003) they knowledge social structural and institutional influences on creativity and innovation, also suggesting that social structure moderates the impact of culture on creative and innovative capacity.
Apple and Microsoft for example are in a competitive market environment, their main objectives are to maximize profits thus maximize market share. With this focus in mind, as a multinational organization, it changes the mindsets of doing business and in turn affects those who are working under the organization. If the social structure is based on maximizing profits and market share, what influence will that have on the creative capacity of its employees? It really comes down to the question of whether businesses are working for the good of the people or whether the people are working for the good of the business.
A statement made by Herbig and Dunphy (1998) stated democratic societies are deemed to allow individualism, difference and freedom to flourish – all vital to creativity. Which I absolutely disagree; firstly all cultures have different perceptions and interpretations of creativity which is why I argue that it not fair to say democratic societies have the characteristics of creativity, what is creativity really?
Infinite Innovations Ltd (2009) defines it as the bringing into being of something which did not exist before, either as a product, a process or a thought. Martins & Terblanche (2003) discusses that the values, norms and beliefs that play a role in creativity and innovation on organizations can either support or inhibit creativity and innovation, depending on how they influence the behavior of individuals and group; how they influence the behavior of the groups really comes down to the culture of the people.
As mentioned before, all cultures have different perceptions and Interpretations of creativity. Individualistic societies such as the US; the prevailing customs tend towards maximising differences, confrontation and compromise. Collectivist’s societies tend towards minimising differences, preserving harmony and reinforcing group loyalty. (Herbig & Jacobs, 1998) With that in mind, collectivistic societies tend to inhibit step by step innovations to flourish, also known as evolutionary innovation in contrast to individualistic societies, there is a higher degree of acceptance in being different, and there tends to be high levels of entrepreneurs; As a result there is a higher ratio of individuals in pursuit for radical innovations and new inventions. The two cultures shows difference approaches to generating innovation and different types of innovation being produced, and but both necessitate creativity for it to be possible.
Back to the main point of the blog, whether multinationals with the large market share and power leverage should be seen as ethical business, Apple compared to Microsoft are two major companies competing in the same market but at different levels. Microsoft, being the one that is view as being on top in terms of CSR, Apple, being viewed at the creative and innovative company but not so high on the CSR. A consultant company, BSR, is a good example of a company that works with company’s’ like Microsoft. BSR (2009) is a company with a mission to work with businesses to create a just and sustainable world, through corporate responsibility. The key idea here is that they help businesses develop strategies and solutions to become more sustainable, thus by taking on board corporate social responsibility. In other words, businesses approach BSR for strategies and solutions to becoming more sustainable by fostering CSR, in turn could be creating more awareness for their brand or reputation for example.
An essay on “in what ways should ethics come into creativity?” (leaderswedeserve, 2009) hits the centre of our discussion and ethical dilemma.
Artists take as a given that art stands above conventional morality. Many scientists still cling to the rationale that the pursuit of knowledge is morally neutral. Business leaders have favored the license to consider their only responsibility is to the financial health of their organizations
The production sector of businesses rarely examines the ethical considerations of why the products are being generated. Although companies are increasing taking into consideration the social and environmental effects of the products being generated, it is driven by external factors ie “resource depletion, extravagant consumption, market demands, reputation etc” just so they can maximize profits for the business. These traditional ideas still exist in todays business models.
The ethical dilemma is that companies today do not know what the right thing to do is; there is this misconception of what companies are for. Generally people will think company’s purpose is to make profit. If we look at Marxs theory on work, if we live in a world there only we are only producing products that will make money, it will reduce rather then express the producers humanity. We can take music for example to relate it to creativity, music should not be made in terms of how much money it can generate, instead should be made to develop a musical ear to appreciate music. One of things that companies do wrong in todays society is that it reduces the many faceted and diverse natures of the human senses to only focus on profit.
A quote made by Michael Kaufman and Vic Desotelle (2002) clarifies the point of this blog. It stated “ how do we do the right thing while at the same time balance the needs of all our stakeholders (investors, employees, customers and suppliers)? What is the right thing to do?
A parody on Apple: The idea behind it was to show how marketing for example has eluded the minds of people on how they percieve the things they buy. Apple uses exactly the same hardware as any other PC's in the mrket, same manufacturers and suppliers. Only differance is the shell and software in the system. So is this a percieved innovation and creativity cming from Apple or real innovation and creativity?
Click on link below to watch
http://www.youtube.com/watch?v=Xgls9IwWUyU
Human nature is inter-related to human culture. Different countries have different cultures which are contributed to the human nature of their citizens. In order to better estimate the human nature and make better assumptions, we apply Geert Hofstede™ Cultural Dimensions as tools of estimation.
Our analysis is to determine the reason regarding the ethics of monopoly and market share between Microsoft and Apple, and how business is being done in terms of its purpose. Beforehand, we should first analyze some human nature, for example: the human nature of U.S. and France.
With reference to the Geert Hofstede™ Cultural Dimensions, it shown that American are most of masculinity, people with masculinity implies that there is high expectation towards men to pursue their career, and values like competitiveness, assertiveness, acquisitiveness, materialism. Therefore, if we assume people are with masculinity, those people are likely to be competative and aggressive in realistic vales sush as market share, monpoly power.
On the other hand, French are with femininity (opposite of masculinity). Those people are mostly relationship based and concern personal feeling. Therefore, if we assume people are with femininity, they are mosly caring, friendly and willingness to provide help. For example: to be more helpfulto csutomers, making products in a user friendly way.
Besides, American gets higher individualism score than French. People with high individualism score represents that there are loosen relationship between people, independent people focus on their own benefits in the most way. Therefore, if we assume people who are individual, those people are likely to be realistic and pursue personal value like their achievement and money.
While France with low individualism score represents collectivism, which means people are close together in groups. Therefore, if we assume people who are collective, those people are likely to shares their belonging. For example: provides helps to most customers need, and being customer oriented.
According to above assumptions of human nature, different assumptions would have different behaviours and thoughts. For example: realistic people are likely to pursue monetary value and achievements, which would result in different mindset regarding the ethics of monopoly and market share, like the Microsoft and Apple.
From individual to corporate aspect
Assumption of human nature would change the way to behave and their personality. This change would also be shown in corporate aspect. In this entry, we would like to analyze Apple as an example.
Assume Apple Inc. is moral or immoral company
The moral acts of a company can be contributed to the decision makers’ thought, mostly are the directors and CEO. If the decision makers are moral in nature, their behaviours can also be shown in their decision for the company. The most observable way would be the social responsibility program of the company. For a company which is moral, their social responsibility program would be more related to social and environment aspect. For example: reducing packaging, using recycle materials, provide social welfare to employees.
In the triple bottom line report of Apple Inc. , it shown that Apple Inc. has several policies which concern social and environmental impact, some of them are quite detail. For example: Apple Inc. decided to reduce the electronic port in the original package with only USB cable provided. This is to reduce materials used for port production, and therefore be environmental friendly. Therefore, if we assume human nature is moral, there will be more policies in addition to moral aspects of the company. Otherwise, if the Apple Inc. is immoral company, such practices will be reduced.
Assume Apple Inc. is amoral company
If Apple Inc is an amoral company, mostly the company would not have any caring and moral acts but just focus on the commercial aspect. That’s mean if Apple Inc. for example is an amoral company. The company would not create values in social and environmental aspects but only in their products, promotion and profit. There is a good example: Air pacific airline has less focus on society and environment (http://www.airpacific.com)
. Therefore, if we assume human nature is amoral, less or even no focus will be on the moral practices.
Assume Apple Inc. is realistic company
If Apple Inc. is realistic company, the company atmosphere would be more profit oriented, concentrated on market share and competitive. Microsoft is a good example. In order to pursue more market share and profitable strategy, Microsoft publish different version of same software in frequent period of time. For example: Window XP was published on 2005, Window Vista was published on 2007 and Window 7 was published in early 2009. These frequent changes generate effects to pursue market share, and therefore increase the profit of Microsoft. If Apple Inc. is a realistic company, Apple Inc. will have similar practices and strategies.
Business ethic is a complicated issue, its standard is various among different people. Ethical business decisions, therefore, have been supported and against. It is resulted from different ethical decision making approaches of every one. They are Utilitarian, Moral rights, Universalism, and Cost-benefit.
During ethical decision making process, people with the utilitarian approach emphasized making the greatest benefits for the maximum amount of people. (Business Ethics: Approaches to Ethical Decision Making)Taking Apple as an example, it has sold third party accessories. For instance, it allowed Nikon and Canon to sell their Mac-compatible digital cameras and camcorders inside the store. It’s an ethical decision made under the utilitarian approach. (Wikipedia: Apple.Inc)The logic is that, cooperating with third parties is good for Apple’s users’ convenience, the third parties business, and its company’s reputation. Otherwise, if Apple monopoly its business and not being partners with others. Although it might have a greater sale of products of its stores, customers, other parties, and its reputation may suffered. To achieve a greatest good for greatest amount of peoples, the Apple chose to cooperate with others.
The moral rights approach focus on moral principles without consideration of the consequences. (Business Ethics: Approaches to Ethical Decision Making)Under this approach, some ethical decision would be considered as wrong or correct. For example, if monopoly is considered as immoral. Even not being the monopolist would cause competition or bankruptcy. The Apple should certainly not monopoly and keeps adopting with others parties.
Under the universalism approach, ethical decision making is merely based on a golden rule. (Business Ethics: Approaches to Ethical Decision Making)You first decided whether a particular decision made should be apply to all people under all circumstances. Then, determined if you’re willing others apply this rules on you. To be easier understood, consider the Apple decision. You ask yourself whether it’s acceptable for you and others that the Apple monopoly to retain its market share, protect its business and gain the maximum profits for its shareholders. If your answer is agreed, then the Apple might choose to monopoly rather than adopting with others.
The cost-benefit approach concerns the leverage between the cost and benefit of taking or not taking a particular action. (Business Ethics: Approaches to Ethical Decision Making)For instance, the Apple would weigh the cost of being monopolist or not, if the cost of monopoly is greater than the benefits of cooperates. The Apply would choose being monopolist as correct decision without considering if it’s ethical or not.
Organizations
Upper level management should take initiative and start changing their mindsets of what businesses are for. They motivate employees to be creative and innovative through passion, but not motivate by producing products which help earning profit; also making products that are beneficial to the development of human kind rather then reducing the creation of products to the criteria of profit. Make sure employees in the organization understand that products should not be created in terms of how much it will make, but how much it will be appreciated.
The organization is focus on changing the idea of people working for businesses to businesses working for people. If we are only producing products that will make money, it will reduce rather then express the producers’ humanity.
Join CSR if own organization commits to operating in an economically, socially and environmentally sustainable manner whilst balancing the interests of diverse stakeholders. Do not join it with the intention to increase company’s reputation by having good CSR index.
Government
Try to use all effective channels, like advertisements, seminars or exhibitions, to promote the concept that successful businesses do not focus on profitability only, but also the creation and knowledge establishment. It should not be the profitability guiding business decision, but the employee guide the business development with their creativity and innovative potential.
Promote and emphasize the importance of sustainability, such as cooperate with CSP, company account for the effects that have on the social and environmental at large. Do not only praise those big companies who have great financial contribution towards the business industry, but also those companies who have contributed a lot in human capital development.
Educate the public about the impact of solely focusing on profitability, gaining market share and building company goodwill is not an ethical way in doing business, not only inspire the existing business owner, but also the future and potential businessman.
Multinationals
Focus more on developing the technologies inside the borders of each of the countries rather then using the operation in various destinations as a way of maximizing profits by outsourcing and shifting production factories to areas with lower wages. Putting too much emphasis on making profit with globalization on a whole, it will not benefit the global economy, nor benefit the human capacity to grow.
Emphasize with the Head of each regional business that focusing on outsource and maximize profit, which in turn, humans are seen as a tool in terms of how much money they make which minimizes the opportunities for them to be creative. Lack of chances for them to develop does not help the organization to develop further.
United Nations
Focus projects more on the development of all nations rather then just the developed nations. Otherwise, it will only widen the gaps and create a capitalistic and exploitive (to the workers) world. The developed countries will be more and wealthier while those less developed or developing countries will suffer from it. Be responsible to protect the rights of every country, especially those small and being exploited countries.
Encourage the production sector of businesses to examine the ethical considerations of why the products are being generated, no matter in which countries and what types of business operation. This is better to be promoted globally, since everyone is unlikely to concern about the ethic aspect in production.
Reference list
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