Creativity and Innovation at Apple Company - Assignment Example

?Innovation - apple Table of Contents 0 Introduction 3 2.0 Literature review 3 2 Creativity and innovation 4 2 1 Creativity 5 2 2 Innovation 5 2.2 Organizational structure 6 2.2.1 Network 7 2.2.2 Team and teamwork 8 2.3 Organizational climate 9 2.3.1 Trust 9 2.4 Organizational culture 9 2.4.1 Self organizing 9 2.5 Leadership 10 2.6 Knowledge 10 2.7 Communication 10 2.8 Learning organization 11 2.9 Open innovation 11 2.10 Summary 12 Conclusion 12 Recommendations 13 Reference List 15 1.0 Introduction Apple is a highly successful company in the market for high technology devices and is considered one of the best performers in the industry. The company is powerful enough to act as the trend setter in the market for ultra modern gadgets. This market is highly competitive at the international level. Innovation is one of the key factors that drive organizational growth. In this era of globalization, the international business platform is becoming increasingly smaller and more closely knitted. Smooth and quick flow of information, rapid advancement of technology and highly customer centric behaviour of Apple makes it one of the most successful business organizations in the industry. Recently Apple has launched its new product, iPhone 5C and iPhone 5S. The company had to overcome their traditional box of ideas so as to come up with new developments. However, Apple’s CEO, Tim Cook, currently emphasises on the development of its existing products, instead of creating a whole new generation of ideas for innovating new products. In this paper, the context of creativity and innovation by Apple would be studied in detail to understand the factors that affect the level of market performance by the company. 2.0 Literature review Creativity and innovation are the most important buzz words in the current business world. Companies are trying to become more creative and improve their innovative ideas in order to maintain their competitive position in the market. However, these two concepts are not identical. They refer to different aspects of organizational development. Creativity refers to the capability of individuals to create new ideas or hypothesize new facts. This is the change in people’s “perception of reality” (Iny and Brabandere, 2013). Innovation, on the other hand, is the “change in reality” (Iny and Brabandere , 2013). In case of innovation, new ideas that have been created are taken up and worked upon to turn it into reality. For example, the idea of development of the idea of a new kind phone led to the creation of the first concept of iPhone. With this new idea, the iPhone has been created. Once the new iPhone is created, Apple could make various changes in the original product. The company has made different iterations of the iPhone by altering their own understanding of the product possibilities thereby changing the understanding of the customers regarding the facilities that can be offered by a mobile phone. Although this fundamental difference exists between creativity and innovation, these two concepts represent two very important facets of any organization. Creative thinking leads to an innovative product. Hence, it is not possible for any firm to move ahead by making innovative activities, if they lack creative talent amongst their employees. 2.1 Creativity and innovation Innovation is one of the key drivers of growth for any organization in the 21st century business world. Innovation allows the companies to invent new methods in which they might be able to grow in future. Innovation is not a skill that a company can develop within a short period of time through training. It has to have the knack, creative mind set of employees and risk taking attitude to invent new products, or strategies to serve its customer better. This in turn improves the company performance and its market share. This implies that, creativity and innovation is present within the organizational culture and is a part of its fundamental view towards growth. For an organization to be creative and innovative, it has to possess one very important characteristic. The company has to be open to modern advancements in technology and willing to communicate freely with all the level of organizational hierarchy. A process of innovation is cannot be fulfilled satisfactorily, until the process involves all the members of the organization. Hence, the process of communication should be open and flexible. All employees within the organization should have the opportunity to make their own decisions and express their own opinions in an un-intimidated manner. Through various research results, it has been revealed that when power is concentrated the hands of only a few individuals within the organization, birth of creative ideas become restricted and innovation is driven by only the criteria set by a few individuals handling the position of power. 2.1.1 Creativity Some organizations can consistently make new innovations and adapt to this process of innovation. However, some other firms do not accept the change holistically or are unable to readily adapt to this change. The second category of firms faces the problem of inconsistency in market performance and is often found to be unable to keep up with the competition it faces in the market. The business environment in the modern world is complex and is evolving rapidly. Hence, it is imperative for organizations to be highly adaptive of the events occurring in the external environment (Morris, n.d.). Successful business leaders are the creators of unique ideas that lead their company to the pinnacle of success in the contemporary period. However, every ingenious idea is time bound, after which either they are modified or are replaced with further innovative ideas. Apple is one company that has brought a revolution in the field of high technology gadgets. Not only in the field of mobile phones, but also in the field of electronic accessories. 2.1.2 Innovation There is a strong debate on the issue whether the firms that have good track record of innovation depends on their discipline regarding the innovation process or on the knowledge base present within the human resource of the organization. The opinions proposed by various scholars and researchers, emphasize upon one fact. The companies that can make innovations and launch them in the market successfully, they have the determination to develop an organizational culture in which creativity is highly encouraged. In these organizations, innovation is made through the combined effect of maintaining discipline as well as holding the employee base at a very high value (Usheproduction, n.d.). Another factor that affects the level of innovation is the extent to which a firm is willing to accept risk in their path of future development. Firms that risk averse do not enjoy the facility to accept challenging situations, which might take the firm ahead to a more profitable position. In this context, it has to be mentioned that the Apple is one of the most innovative companies in the present business world. Apple values the opinions of all its employees and encourages them to think in a creative manner. They are encouraged to make innovative activities even though some of them might yield wrong results. In Apple, the organizational structure is such that innovative employees are encouraged with greater enthusiasm than those employees that play a safe game by following the traditional established routes (Lombardo and Roddy, 2010). 2.2 Organizational structure Organizational structure is the pattern in which the various tasks of an organization are performed. Every organization has a structure that is followed while allocating different responsibilities to different departments. Within the organizational structure, it is determined whether a particular responsibility would be shared by some department or a group or would be handled by a single individual. 2.2.1 Network Networking is one of the important factors that play a very important role in the current business performance of international corporations. In the current business environment, maintaining smooth communication with customers, suppliers and business partners is imperative for all organizations. Apple is one top rank holder in the industry for high technology products. Therefore, it has a wide connection with various other market agents. Simultaneously, it is important to have good inter-organization networking within the firm. In Apple Inc. the organizational structure adopts a spherical structure. The organizational structure of apple is illustrated below. Figure: Organizational structure (Source: Dediu, 2013) The CEO is in the centre and the rest of the departments are controlled directly by the CEO. This was the case when Steve Jobs was the founder and CEO of Apple. After the demise of the legendary CEO of Apple, the structure has gradually changed. This organizational structure is undergoing certain changes, as the company is gradually shifting from the centrally governed approach to a more collaborative approach. It would be highly interesting to see how the company adapts to this new organizational structure and modifies itself so as to deliver the best performance according to market situations (Yarow, 2013). 2.2.2 Team and teamwork Growth oriented organizations depend on teamwork to a large extent. The legendary belated leader of Apple, Steve Jobs, always encouraged teamwork within his organization. He took interest into every activity in the organization and took note of minute details. He motivated the employees to collaborate with one another and work as a part of a team with full commitment and mutual cooperation. This legacy has been maintained after the demise of Jobs. The organizational structure has been made more collaborative. At present, every unit in the organization is placed in charge of some particular individual that would be handling the activities of the unit as the head. Each of these departmental heads would report to the CEO, but, each department would not be directly overseen by the CEO himself. The responsibilities are collaboratively distributed. For example, the erstwhile head of the hardware department has been put in charge of the hardware as well as the software departments. This would take more time for the person to understand the operational and business activities of the department. Some industry experts claim that this change might lead to delay in the delivery of various activities. However, researchers and market observers are eager to watch the way in which the company would fare in the long run. 2.3 Organizational climate Organizational climate describes the environment in which the members of the organization operate. Therefore, Organizational climate is an important determinant in the performance meter of the employees and the overall performance of the company in the long run. 2.3.1 Trust Trust is an important parameter that affects the organisational climate. Trust is the value that affects the employees as well as management in the activities. The factors that create trust within the organization climate of Apple are effectiveness of the team leaders and managers, sharing of common goals and values, openness of leaders, honesty and sincerity among co workers, concern among employees, tolerance among the employees, safety measures and reliability on the leaders as well as employees. Employees are empowered to make decision and higher management display considerable faith on their decisions. 2.4 Organizational culture Organizational culture varies from company to company. Different companies have different organizational culture depending on their objectives, vision and leadership qualities. 2.4.1 Self organizing In case of Apple, the organizational culture displays high respect to the members of all echelons within the company. The opinions made by the members of the organization are considered seriously by the senior management. The members are self organized according to the organizational values and common goals. Such an organizational culture is beneficial for the development of trust and confidence among the employees. This in turn improves productivity of workers. Decisions are made mutually and not according to the sole decision of the management. 2.5 Leadership One of the exemplary leadership in the modern business era has been shown by Steve Jobs. He was the former CEO of Apple and the success of the organization has been attributed to the exceptional leadership skill of this personality. Since the beginning of the company’s operations, Jobs has maintained a classic leadership position in the company. This legacy is also maintained by the present CEO of Apple, Tim Cook. The leadership quality of both these leaders highlights one factor, they put significance emphasise on team work. Employees are encouraged to improve rapport within their teams and do their work collaboratively. This would lead to development of better ideas and open up new routes for future development. 2.6 Knowledge Knowledge is the capability of an individual or institution to understand a situation and assess it on the basis of appreciation of theory or practical context or both of these. From the perspective of organizations, organizational knowledge is the capability of the members of a company to understand their responsibility on the basis of the knowledge base possessed by the company and fulfil their responsibilities by utilising the most technologically advanced method implemented within the organization (Tsoukas and Vladimirou, 2001). Since Apple is highly advanced in technology and is one forerunner of innovation in the field of high tech electronic gadgets organizational learning in highly flexible in the company. 2.7 Communication The level of internal as well as external communication affects organizational operations in all companies. This is because internal communication determines the smoothness with which the internal operations of the firm might be conducted, while, the external communication determines the type of relationship that the firm maintains with the external factors, such as target customers, suppliers, business partners, public relations officers, government and other stakeholders. Free flow of communication is crucial for the elimination of misstatements of any kind and for maintaining transparency in the dealings of the organization (Mills, 2002). Efficiency of the communication network can be measured by the speed with which messages and other information flows between different partners. Higher the level of efficiency, higher would be the level of transparency in communications system and other transactions. Good networking channel is one of the positive advantages of Apple, which allows the company to maintain a very loyal fan base. It is even more important to note that the total number of loyal customers is increasing at an increasing rate. This is facilitated by a very good communication and networking process maintained by the organization (McMillan, 2010). 2.8 Learning organization The level of organizational learning is very high in Apple. They focus on adaptability of the organization and strive to keep their activities up-to-date with modern development. As a matter of fact, Apple is technologically more advanced than most of its rivals in the industry. This makes the knowledge base of the company rich and modern. 2.9 Open innovation Innovation is one of the key drivers of success and growth for any organization. With constant innovation, a company becomes capable of making its products and service offerings much advanced and it also makes its customers anticipate the arrival of new products at regular intervals. Apple is known all over the world for its innovativeness. It exhibits very high competency in the market for smart phone and mobile music players (VCCS, 2011). All its innovations are highly customer centric. The company invites its customers to post comments and participate in various discussions related to the products offered by the company. This would allow the company to improve its products according to the demands of the market. Apple listens to the comments of its customers and considers them while making new strategic decisions. 2.10 Summary Apple has a highly creative work force and the organizational culture is one in which innovation is fostered. The organisational structure of this company reveals that the CEO plays a key role, through which all other departments have to function. However, after Tim cook replaced Steve Jobs as the CEO, the organization structure is undergoing a change. The organization is becoming more collaborative in its operations and management procedure. Team work is highly encouraged and any activity by an individual or team that might boost up the efforts of the entire team is highly appreciated. There is an atmosphere of trust and fellow feeling. Leadership qualities play a very important role in this regard. However, the other factor that allows the employees to stay organized is that they are bound together by the organization vision and goals (Rufat-Latre, Muller and Jones, 2010). Conclusion However, apple maintains a niche market share with its innovative range of iPhones, iPads and iPods. The company has a loyal market share and it values its customers significantly. From extensive market research it has been found that the level of success enjoyed by the company is due to the fact that the company is highly sincere towards the likes and dislikes of its customers. Therefore, it puts significant emphasis on creating a genre of high end products so as to set customer desires at a level different from the general goods available in the market. One this desire is developed, Apple gets the space to satisfy the wants of customers by providing a range of innovative products, which the customers might choose from. This is further facilitated by the organizational knowledge sharing process, which is highly lucid. There is a well networked process of communication that helps the organization to maintain a good internal as well as external communication. It helps in organizational learning and further encourages the employees to update their knowledge level so as to keep them up to date with the present state of technological advancement. Good communication facilities allow Apple to include their customers in the process of idea creation and innovation. Open innovation is advantageous for the company since, it can develop such products that are highly anticipated by the target market and therefore, faces high level of acceptability. Recommendations The discussion presented above establishes the fact that Apple is one of the innovators in the market for modern gadgets. Apple is the first creator of the first smart phone, iPhone. However, the company should take care of several other aspects. At present, the company is at the pinnacle of the success. Being present at the top most position, the company faces step competition from its competitors. One drawback of Apple’s products is that they are considerably high priced than the other products. Therefore, in order to maintain its position in the industry, it should take care of the price of the products and make them comparatively closer to the price of products offered by other companies (Pearce, 2009). Besides, with advancement in technology, many firms can now access the modern facilities. Therefore, several variants of smart phones, portable music players and tablets are available in the market. Being the niche market, apple might soon get confined to a segment of customers beyond which the company’s products might lose its attractiveness. Lowering of price would reduce profitability for the company, which indicates that the company would have to make other strategic decisions to increase its global market share. Innovation should be made in such a way that it can provide the products at a price that is accessible by a bigger market. It is highly recommended that the company should modify its marketing techniques so as to bring a broader market share under its coverage. Reference List Dediu, H., 2013. Understanding Apple's Organizational Structure. [online] Available at: < http://www.asymco.com/2013/07/03/understanding-apples-organizational-structure/ > [Accessed 14 November 2013]. Iny, A. and Brabandere, L. C., 2013. Apple’s New iPhone 5C and 5S: The Results of Creativity or Innovation? [online] Available at: < http://blogs.hbr.org/2013/09/apples-new-iphone-5c-and-5s-th/ > [Accessed 14 November 2013]. Lombardo, B. J. and Roddy, D. J., 2010. Cultivating Organizational Creativity in an Age of Complexity. [pdf] IBM Institute for Business Value. Available at: < http://www.uni-gr.eu/uploads/media/ED_IBM_Creativite.pdf > [Accessed 14 November 2013]. McMillan, C., 2010. Five competitive forces of effective leadership and innovation. Journal of Business Strategy, 31(1), pp. 11–22. Mills, G., 2002. Retail pricing strategies & market power. Australia: Melbourne Univ. Publishing. Morris, W., n.d. Enhancing Organisational Creativity: A Literature Review. [pdf] Future Edge Limited. Available at: < http://www.future-edge.co.nz/Files/Organisational.pdf > [Accessed 14 November 2013]. Pearce, J. A., 2009. Strategic management. New York: Tata McGraw-Hill Education. Rufat-Latre, J., Muller, A. and Jones, D., 2010. Delivering on the promise of open innovation. Strategy & Leadership, 38 (6), pp. 23–28. Tsoukas, H. and Vladimirou, E., 2001. What is Organizational Knowledge? Journal of Management Studies, 38 (7), pp. 973–993. Usheproduction, n.d. Organizational Culture, Creativity, and Innovation. [pdf] n.p. Available at: < http://www.usheproduction.com/design/8020/downloads/5.pdf > [Accessed 14 November 2013]. VCCS, 2011. Apple Core Values. [online] Available at: < https://sites.google.com/a/email.vccs.edu/apple-computers/home/apple-core-values > [Accessed 14 November 2013]. Yarow, J., 2013. Apple's New Organizational Structure Could Help It Move Faster. [online] Available at: < http://www.businessinsider.in/Apples-New-Organizational-Structure-Could-Help-It-Move-Faster/articleshow/21141071.cms > [Accessed 14 November 2013]. Read More