Environment and Corporate Culture in Apple Inc - Case Study Example

?Adaptive Culture Organization Introduction Today’s fast moving industry practices and trends cannot make an entrepreneur relaxed regarding the future of the business. New ideas, innovations, adoption of latest technologies, access to most current information are the most needed requirements of any business, which want to step forward with the global market practices. Organizations, which fail to fulfill the above-mentioned requirements, cannot even think their businesses after some specific point of time. Upon the adoption and fulfillment of these requirements, an organization is considered as the one, which has accepted the concept of adaptation in order to combat with the upcoming challenges to be faced by the organization. Proactive thinking and adaptive strategy buildings is core concepts which can help organizations implement a culture within an organization to cope up with the fast moving developments. Organization facing a turbulent environment must have an adaptive culture in order to keep pace with the changing conditions of market. It is essential for every organization to trace the changing condition and come up with back strategies if they wish to survive in the industry. There are number of products and services available in market, the one who comes up with innovative and adaptive strategies can survive the competition. Nowadays, there are number of consulting agencies, which are providing their services to organization. These agencies help organization in developing appropriate strategies and culture of themselves. Some of them include Toffler Associates, Bloom Institute Inc etc. Toffler Associates have prepared a benchmark criterion for companies so that they can initiate Adaptive Culture in their organization. This criterion emphasize primarily on five major areas. In order to make an organization adaptive, an organization needs to make changes in the following five areas: i. People ii. Process iii. Strategy iv. Structure v. Technology Any organization can tap these five areas in order to pursue the Adaptive Culture. The status at which a company needs to stand in order portray as an Adaptive Cultured organization has been clearly mentioned in the reports of Toffler Associates. In order to meet the global challenges of 21st century, every company has to possess some degree of adaption. In this paper, that company is going to be discussed which has now become very prominent due to its technological innovation and instant adaption. The name of this company is “Apple Inc.” Apple Inc has surpassed almost all the major technological oriented company when it comes to adaption and innovation. A detailed description of the adaption of Apple Inc has been mentioned in the subsequent sections of this paper. Adaptive Culture at Apple Inc Corporate culture defines the particular set of norms and values shared by people and groups of every organization. Every organization defines the goals that are to be achieved as well as the standards of behavior for accomplishing these goals. It is the responsibility of the management to define and communicate these goals organization-wide. By taking an example of Apple Inc, it can be stated that despite of number of changes in the chief executive level of the company, Apple Inc has maintained its corporate culture, which had been introduced when the company was founded in 1970s. By looking at the historical performance of the company, it can be said that the company has managed to keep a mix of two of the most important cultures: i. Innovative Culture ii. Adaptive Culture At the beginning, to certain extent, the culture of the company was Individualistic, which means that it put emphasis on the personal empowerment and creativity of individuals. Concerning to the challenges and situations of 21st century, the top management of the company has revised their strategies. Therefore, the initial rebellious, riotous and individualistic culture has been converted into emerging, innovative and adaptive culture. However, the core values of the company have stayed relatively the same. Therefore, the Apple’s culture today has become the one, which focuses more on creativity, innovation and has certainly become an adaptive culture. Apple has developed a culture, which encourages initiative, innovation, and adaption since the current environment absolutely requires the culture f adaption due to the rapid changes in the dynamic IT Industry. The subsequent sections of this paper highlight the five main areas where adaptive culture needs to be implemented in order to integrate the different units of organization in one coherent unit. People The people area refers to the human resource management and hiring practices. The human resource department of Apple Inc has stated its objective in the following mentioned statement: “Provide the company with the necessary personnel to assure superior performance. Employees should at all times, strive for the highest quality in all they do. Ensure proactive internal career progression.” Apple ensures that it employs the best available people so that the best quality products can be manufactured and delivered. Another reason which makes Apple focus on hiring the best people is empowerment. Employee empowerment is not possible when employees are new and inexperienced. Therefore, in order to empower employees there must be some exceptional skills and qualities in employees. Empowering inexperience employees can result in various mistake, errors and inefficiencies. Process This area refers to the operating procedures of the enterprise. As far as operations capabilities of Apple Inc are concerned, the company largely depends on various external vendors in United States, China, Taiwan, Netherlands, Korea and Czech Republic. Apple utilizes its manufacturing facilities just of the final assembly of the products. Due to the reasons that company possesses only few key suppliers for some of its components, there is a potential threat that company might not come up with excess demand in future. For example, just after the company introduced iMac, the sales reached so high that it was not possible for Apple to keep up, due to the shortages in some of the components, the demand consequently cooled off quickly. 1. Outsourcing As mentioned earlier, large numbers of Apple’s products are produced in part of in whole by third-party producers. Moreover, much of the logistics management and transportation has been outsourced. While outsourcing lowers the fixed cost, it also diminishes the direct control of the company over the integral departments such as manufacturing and transportation. This can have adverse affect on the quantity and quality of the products manufactures and can harm the flexibility to respond to the dynamic conditions of market. Strategy This area comprises of the management theories and leadership practices, which drive the operations of the company. The corporate level strategy of a company defines the possibilities where a company can invest it resources and probable opportunities for contracting or expanding. Apple has been involved in diversification, horizontal integration, vertical integration and strategic outsourcing. A brief detail of all of these strategies has been mentioned below. i. Diversification In diversification, new businesses are added into the company, which are distinct and totally unrelated from those of the established ones. Apple has recently engaged in the business of digital music players which is distinct from the business of traditional personal computer. Therefore, it can be termed as a diversification activity. Apple has transferred its distinctive competencies to the music player diversification, which includes quality, creativity and technological innovation. Apple’s diversification strategy has not failed because there were not any problems related to commercialization, scale of entry and R&D activities. ii. Horizontal Integration Horizontal integration occurs when industry competitors agrees to merge or acquire another company in order to acquire long run profitability. Even though, there are two possible ways of implementing horizontal integration, Apple currently engages in acquisition only and certainly does not plan for a merger at this point of time. Apple has acquired and continues to acquire those companies that possess products, services, technologies and personnel, which complement Apple’s product portfolio as well as strategic direction. Some of the recent acquisitions of Apple include PowerSchool and Emagic. iii. Vertical Integration Vertical integration refers to when company expands its operations either forward or backward or in other words, it makes an agreement with its suppliers or distribution channels. Apple has been regarded as the one doing forward integration, which means that it has gained control over its distribution channels. Apple’s stores are located all over the U.S, as well as in other major countries such as Germany, U.K, Australia and France. Its online store allows the user to locate Apple’s product from anywhere in the world. iv. Strategic Outsourcing It refers to segregating some of the value creation activity of the company and allowing it to run as a separate and independent entity. Apple has outsourced various activities such as transportation and assembly of products. It lowers the fixed cost but at the same time reduces the direct control from these departments. Structure Structure is the most important component of adaptive cultured organization. It refers to how different departments and areas work together in an organization. Structure in an adaptive cultured organization groups people based on common experience or expertise. It enables people to learn from each other and become more productive and specialized workforce. The above-mentioned diagram depicts the structure of Apple Inc. This structure enables the company to perform efficient activities and effective monitoring which consistently lowers the costs and boosts the operational flexibility. In Apple’s case, we can see that the structure of executive management team corresponds to this structure. If the structure is functional, it gives managers greater control over all the activities of the organization. This structure suits Apple because it elements all the unnecessary levels of hierarchy and making it too tall. Apple has kept its structure a centralized authority. It is relatively a flat structure where the greater control and authority is in the hand of top management. Despite of that, Apple encourages it lower leveled managers to initiate and strengthen the company’s core value, which includes engineering excellence, innovation and marketing skills. At the lower level, the company’s structure is decentralized and all the lower leveled staff has to report the head of the department. Such decentralization improves the decision-making, planning and control process due to better availability of information. Technology This area refers to how the organization utilizes communication systems, information systems and other tools to facilitate the operations of business. When it comes to technology, Apple Inc has been very efficient, innovative and adaptive. It has tapped the latent demands of the customers. It has provided number of innovative ideas as well as innovative products, which have now become an essential of everyone’s lifestyle these days. In some European countries, it is not possible to go around without having an iPhone. The company has largely focused in bringing new features, applications, software and tools that facilitate the users in number of ways. For a user who is using Apple products, it is very unlikely to switch to any other product. Despite of charging premium prices, the company has rendered exceptional products and services that after receiving such quality of services the distress of paying a large sum of money lowers down to a great extent. Apple has now become world’s most valuable technology company. According to New York Times, Apple has recently surpassed Microsoft due to its exceptional innovation. According to a co-founder of PayPal, “Apple is a bet on technology and Apple beating Microsoft is a very significant thing.” Recently, Apple was valued at $222.12 billion by Wall Street whereas Microsoft was valued at $219.18 billion. The primary reasons which has caused Apple Inc. to generate such revenue and market capitalization lies behind its technological innovation. The idea can be taken from it that it has surpassed the biggest giant of technological industry. Conclusion The example of Apple Inc clearly states the fact that in today’s fast changing business environment, it is essential to be adaptive to the changing behavior of market. The one, who fails to do so, fails to survive in the market. Adaption is the key to succeed and therefore every other company needs to learn the basic principles of adaption in order to run their businesses successfully. Works Cited Apple Developer, (n.d.), , . Available from :  https://developer.apple.com/technologies/ [Accessed: Nov 10, 2012]. 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