Managing Human Resources: Apple Inc.s Corporate Culture - Case Study Example

Managing Human Resources: Apple Inc.’s Corporate Culture Introduction According to Chronicle Staff Writer Kim (2010), Apple Inc, was able to surpass even Microsoft and attained second spot in the list of most valuable companies in United States after Exxon Mobil, as far as market capitalization is concerned. Moreover, it became the most valued technology company in the world at present (Kim, 2010). Apple Inc and its capabilities are well known to the world and they need no introduction at all in the international market. Surpassing Microsoft in market capitalization is not a simple achievement. Apart from the computer and operating system market, Apple started diversification of their product portfolios with the help of ipods, iphones, mobile phones and different kinds of portable electronic devices which helped them to achieve dividends in the international market. Even though Apple excels in international market, many people believe that their organizational culture needs drastic changes in order to retain their top spots in the market. There are many allegations against Apple Company with respect to their poor HR management practices. Apple failed to improve teamwork even though they have given opportunity for the fresh employees to work with experienced and talented people. Even though Apple is offering a competitive salary package to its employees, the lengthy work schedules of 60 to 70 hours per week is too much for the employees. Many employees in Apple believe that the promotions in the company are motivated by biases and prejudices of the top management. Moreover, top level managers in Apple were accused of keeping dictatorship in their approach. In short, Apple’s HR strategies are a blend of good and evil things. Apple needs more comprehensive human resource policies to meet the challenges of the current globalized business environment. This paper briefly analyses what is good and what is detrimental to the organisational culture in terms of HR strategies and practices in Apple Inc Pros of Apple’s HR strategy Olaniyan & Okemakinde, (2008) have mentioned the importance of human capital theory in deriving the best out of an employee. In their opinion, human capital theory refers to the increase in productivity and efficiency of workers by increasing the level of cognitive stock of economically productive human capability which is a product of innate abilities and investment in human beings (Olaniyan & Okemakinde, 2008, p. 158). Innate abilities of an employee will come out in its full dimension only if the investments made on the employee by the organization are adequate. These investments can be adequate facilities, compensations, rewards positive work environments etc. In other words, if a company failed to treat the employees properly, they will never work hard for the company. Efficiency and productivity of an employee depends on many factors and among them, the right attitude of the worker seems to be the vital one. Attitude of a worker can be modified in favor of the organization only by offering good working environment and benefits to the employee. According to Qumer, (2009), Apple provides good compensation, benefits, perks, vacation time, health care, training course, brown bag launches with executives and casual dress codes on the job etc to its employees in order to bring out the bests from the employees (Qumer, 2009, p.3). In other words, Apple is providing everything possible to motivate the employees based on the human capital theory. The knowledge acquired by previous generation has a significant role in shaping the knowledge of new generation (Olaniyan & Okemakinde, 2008, p. 158). It is impossible for an organization to operate successfully if it is filled with only fresh employees. A successful organization will always keeps a blend of fresh and experienced employees. Fresh employees may bring new ideas, but they need the assistance of the experienced ones in shaping the new ideas useful to the organization. Moreover the assistance from the experienced employees will help the fresh employees to know more about the organization, its work philosophies, the do’s and don’ts of the organization etc. It is because of the above logic, Apple provides opportunities to their employees to work with experienced and talented people (Qumer, 2009, p.3). McClelland’s theory of human motivation, argues that an employee can be motivated if his need for achievement (N-Ach), the need for power (N-Pow) and the need for affiliation (N-Affil) are fulfilled (McClelland, n. d). “In 1995, Apple created the Apple Fellows Program in order to recognize its best employees who had made extraordinary contributions to the company” (Qumer, 2009, p.9). Apple has realized that the psychological needs of the employees are as important as the physical needs. The above program was incorporated to ensure that the outstanding performances should not be gone unnoticed and it should be recognized and rewarded properly in order to motivate the employees psychologically. Moreover, the winners of the above award will get more power in the organization and they will become more attached to the organization. In short, the need for achievement, need for power and need for affiliation of an employee can be fulfilled through Apple Fellows Program. According to Herzberg's Motivation-Hygiene Theory, “we have basic needs (hygiene needs) which, when not met, cause us to be dissatisfied. Meeting these needs does not make us satisfied -- it merely prevents us from becoming dissatisfied” (Herzberg's Motivation-Hygiene Theory, 2010). Qumer, (2009) has mentioned that Funny, brilliant, relaxed co-workers and modern spacious beautiful offices filled with comfortable equipments etc are some of the major benefits of working in Apple Company (Qumer, 2009, p.8). Beautiful offices and spacious buildings alone may not directly motivate the employees much. But indirectly all these elements can contribute heavily in preventing employee dissatisfaction. Most of the employees always like to work in beautiful and spacious offices as they may derive proud out of it. An employee may not be satisfied fully even if he was paid well, but the working environments were poor. Some employees like good working environments more than the salaries they receive. Apple has concentrated more in fulfilling such indirect needs of the employees in order to prevent their dissatisfaction. “Employees of Apple are working in a challenging and creative environment which helps them, to explore new ways of performing common tasks” (Qumer, 2009, p.9). It is a fact that when everything goes on smoothly, the employees might be tempted to become lazy. The employees will be active only when they face some challenges. The challenges will force them for critical and creative thinking which will result in the development of new ideas and strategies. Apple always provides challenges and opportunities to the employees in order to make them active all the time. “Apple workforce includes diverse employees from different countries which enable them to utilize the expertise from different regions. It provides equal opportunities to its diverse employees irrespective of their ethnic background” (Qumer, 2009, p.9). Apple has realized that the business environment is rapidly changing because of the globalization and liberalization policies. Outsourcing and offshoring are some of the major business strategies adopted by international companies to exploit the current liberalized business world. Diverse workforce is essential for exploiting the global business opportunities. For example, India, China, Brazil etc are some of the rapidly developing countries in the world at present and it is difficult for Apple to compete effectively in those countries with the help of Americans alone. It is necessary for Apple to utilize the local knowledge in these countries for exploring the possibilities more effectively. Since Apple Company has employed many Indians and Chinese, before starting an operation in these countries, it can utilize the knowledge of these people. In short, the diverse workforce is always an asset for Apple for its future ambitions of expansion of business. Cons of Apple’s HR strategy Apple maintained an organizational culture which was sometimes opaque to even its employees. Secrecy has given more importance in Apple’s work culture and the violators were severely punished (Qumer, 2009, p.3). Apple never allowed its employees to disclose their corporate secrets to others. The employees of Apple don’t have the right to reveal anything about the company or its products either in printed or electronic media. Apple keeps a totalitarian approach in this regard. It is difficult for some employees to accept such work culture since Apple consists of diverse employees who have experiences in working with different organizations at different countries. For example, a Chinese employee working in Apple may not surprise much when he faces such barriers of freedom of expression in Apple. But an Indian working in Apple might be surprised to see such restrictions in an American company like Apple. In short, Apple’s strategy of keeping everything secret or not taking the employees in confidence is definitely causing dissatisfaction among employees. “Apple’s recent performances were attributed to a one man show of its charismatic leader Steve Jobs. If Steve leaves apple, probably the stocks of Apple may down by 25%”(Qumer, 2009, p.4). It is impossible for an organization to formulate long term business strategies depending heavily on a single person. In Apple’s case, most of the organizational strategies and growth prospects are revolving around the leader Steve Jobs at present which is not desirable. Apple did nothing so far to raise some talents from the middle management levels to assist Steve or to take the place of Steve when he plans to retire. Nobody can predict what will happen to Apple after the Steve era is over. But everybody accepts the fact that Apple should find one or more substitutes for Steve in near future itself. “The work culture in Apple is demanding and the employees forced to work for 60-70 hours per week. In other words, in Apple there was always more work to do than the employees and hence Apple encourages workaholics” (Qumer, 2009, p.7) Apple employees always have complaints about lack of leisure time for spending with the families and the friends. Apple asks their employees to work for 10-12 hours per day which is more than the accepted international standards of 8 hours duty per day. “When Apple was in a survival mode, almost everything controversial was excused as necessary for ensuring the survival of the company” (The Apple Corporate Culture, 2005). But the growth statistics showed that Apple was never in survival mode and its profits are growing more and more. As mentioned at the beginning of this paper, Apple was able to defeat even Microsoft in market capitalization which clearly indicates the huge growth phase Apple is going through currently. Under such circumstances, it is difficult for the employees to digest the Apple’s work philosophy of 60-70 hours per week Vroom’s expectancy theory suggests that an individual will not be motivated if his increased effort will not increase his performance, if his increased performance will not increase his rewards and if he doesn’t value the rewards on offer (Expectancy Theory of Motivation, 2006). Qumer, (2009) has mentioned that unfairness in promotions and overall treatment is a common complaint in Apple Company (Qumer, 2009, p.15). In short, Apple’s tactics/policies with respect to the promotions seem to be questionable according to the expectancy theory. An employee always works hard only if he expects something better from the organization. In other words, the chances of getting a reward or promotion will always encourage the employees to do their bests if they really respect or value the rewards. Apple managers often kept a blind eye towards the outstanding performances of the employees which forced the employees to take a passive approach in their jobs. Moreover, the offered rewards in Apple Company were not substantial enough to motivate the employees. In short, Apple employees failed to achieve right support from the superiors and moreover their hard work often left unnoticed, unrewarded or under-rewarded. According to Barnett (2010 Theory X and Theory Y can be used to represent two types of employees in an organization; one with negative attitude towards work (Theory X) and the one with positive attitude towards work (Theory Y). Theory X represents a negative view of human nature that assumes individuals generally dislike work, are irresponsible, and require close supervision to do their jobs whereas Theory Y denotes a positive view of human nature and assumes individuals are generally industrious, creative, and able to assume responsibility and exercise self-control in their jobs (Barnett, 2010). It is a fact that employees of an organization can be classified based on their attitude towards work. Some of them may have positive attitude whereas some others may have negative attitude. Apple managers failed to consider these attitude differences of the employees while managing them. Instead of different strategies for different individuals based on their work attitude, Apple managers adopted a standardized management policy for all. For example, totalitarian approach may be required to manage employees who dislike their work whereas such approaches might be suicidal for others. Democratic approaches might be useful for the employees who keep positive attitude towards work. Instead of using different strategies to different employees, the company tried to threaten all the employees by informing them that the company believes in employability security rather than employment security (Qumer, 2009, p.10). The above strategy put all the employees under pressure irrespective of those who possess positive or negative attitude towards work. In short, the above strategy demoralized the hardworking employees and they forced to work lengthy hours with an unpleasant mind to make the company happier. Mullins (2007) pointed out that group exists in all organizations and are essential for the efficient working and performances in the current organizations (Mullins, 2007, p.6). Team work is encouraged in most of the current organizations. In fact team work increases the overall productivity of the individuals and the organization. In a team each member will get assistance from other team members in executing their work successfully. The individuals in a team thus face less job related stress and the productivity of each team members will be increased immensely. Many business experts are of the opinion that that team work is the best way to increase the productivity and improve the performance of the employees, but Apple has other ideas. They have more faith in individual works rather than teamwork which is creating lot of problems to the employees and the organization. At present Apple employees were not informed about new product developments except the ones working on the project. Product development executives provide false facts to other employees with respect to the new product (Qumer, 2009, p.11-12). Creative suggestions from the employees for the new product development is absent in Apple Company because of the tight secrecy it keeps with respect to the new product development. Moreover, the employees may not develop much intimacy towards an organization if the organization tries to hide something from them. The relationships with the employer and the employee are important in sustaining organizational growth and such relationships are absent nowadays in Apple Company. Conclusions Even though Apple Inc was successful in making the company one of the most reputed and valuable companies in the world, some of its human resource management strategies seem to be strange. They were able to put even Microsoft behind at present as far as market capitalization is concerned, but in order to sustain their growth they need to close some of the loopholes in their human resource management strategies. Even though the employees of Apple are getting enough salaries and perks, they were forced to work lengthy hours in the office which is definitely creating dissatisfaction among them because of their inability to find enough time for leisure activities or family matters. Apple recognizes outstanding talents through the outstanding employee awards, but they failed to remove, prejudices and biases at the time of promoting the employees. Apple succeeded in providing beautiful and spacious offices for the employees, but they failed to provide enough support to the individual employees in their work. Instead of encouraging team work, Apple seems to be more confident in individual efforts. Apple was keen in maintaining a mixture of fresh and experienced employees in order to utilize the abilities of both. Moreover, they are keeping a diverse workforce which enabled them to explore the global market more comprehensively. The diverse workforce also helped Apple to bring the expertise of different countries under one umbrella. The diverse workforce is definitely an asset for Apple’s future expansion strategies, but biases, discriminations and prejudices often making the diverse workforce dissatisfied in their endeavours. The top level management especially the VP’s behaving like dictators in the organization which created lot of dissatisfaction among the employees. Apple managers were reluctant in assessing the employee performances for allotting promotions or rewards which created a mechanical feeling among them. Good and bad workers; all treated with almost same management styles in Apple Company. The company is trying to manage the employees using totalitarian approaches rather than the democratic approaches. Thus the Apple workers forced to concentrate more on safeguarding their interests at the expense of the Company’s interest. Apple Company is currently depending heavily on its charismatic leader Steve Jobs for everything. Nobody can predict the future of Apple Company once Steve decides to step down. Apple failed to raise some middle managers to follow the footsteps of Steve Jobs. Moreover the company failed to keep transparency in its dealings especially in the new product developments. Even the employees don’t have any idea about the new products except the team working on the development of the new product. In short, Apple is trying to swim against the flow of water. Team work, transparency in dealings, democratic means of management, collective decision making etc are not visible in Apple Company at present. The company seems to be having more faith in traditional business or management strategies rather than the advanced methods of business management or human resource management. But in my opinion, Apple should improve its human resource management practices very much in order to avoid future problems and to speed up the growth further. Recommendations Apple Company should develop a smart top level management team in order to follow the footsteps of Steve Jobs. They should exhibit more confidence upon the employees which will improve the employee-employer relationships in Apple Company. Apple should keep more transparency in their dealings which will help the employees to contribute more to the development of the company. Lengthy working hours should be avoided and they should realise that family life is as important as professional life for an employee. Only an employee with 100% peace of mind would be able to deliver 100% of his productivity and in order to ensure such peace of mind to the employees, Apple should reduce the working hours to 8 hours per day. Since Apple is currently growing heavily, there is no point in making life difficult for the employees in the organization. Apple should try to incorporate more leisure activities both within and outside the organization which will help the employees to stay fresh even amidst busy working hours. Training and development is an important aspect of Human resource management and Apple should provide more training to the employees in order to make them aware of the current business opportunities and challenges. They are currently providing fresh employees the opportunity to work with experienced and creative workforce. But that alone may not cater the needs of the fresh employees. Apple should communicate its business philosophies and organizational strategies more clearly to the employees and for that purpose proper training sessions are necessary. Apple should reduce the weekly working hours to 50 hours maximum instead of 60 to 70 hours. It should think of providing 2 days or at least 1.5 days weekly off to its workers in order to make them fresh and to provide them enough time for leisure activities. The current employees are facing tremendous stress in their professional and personal lives because of the increased commitments. Apple should realize such feelings and emotions of the employees and should take necessary actions to reduce it. It should devise long term strategies instead of concentrating on the short term goals. Teamwork is encouraged in almost all the organizations at present in order to increase the productivity of the workers. Apple should think in terms of such strategies in order to reduce the job stress and to increase the productivity of the employees. References 1. Barnett T (2010), Theory X and Theory Y, Retrieved on 30 June 2010 from http://www.enotes.com/management-encyclopedia/theory-x-theory-y 2. Expectancy Theory of Motivation, (2006) Retrieved on 30 June 2010 from http://www.arrod.co.uk/archive/concept_vroom.php 3. Herzberg's Motivation-Hygiene Theory (2010), Retrieved on 30 June 2010 from http://changingminds.org/explanations/needs/herzberg_needs.htm 4. Kim R (2010) Apple Passes Microsoft As Top Tech Company, Retrieved on 24 June 2010 from http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/05/26/BUDJ1DL0IU.DTL> 5. McClelland D (n. d), Human Motivation Theory Retrieved on 30 June 2010 from http://www.learnmanagement2.com/DavidMcClelland.htm 6. Mullins L J. (2007), Management & Organizational Behavior, Publisher: Financial Times Management; 8 Pap/Pas edition (September 28, 2007), 7. Olaniyan. D.A & Okemakinde. T (2008), Human Capital Theory: Implications for Educational Development, European Journal of Scientific Research, ISSN 1450-216X Vol.24 No.2 (2008), pp.157-162, Retrieved on 24 June 2010 from http://www.eurojournals.com/ejsr_24_2_01.pdf 8. Qumer S M, (2009), Apple Inc’s corporate culture: The good, the bad and the ugly, ICMR Center for Management research, www. Icmrindia.org 9. The Apple Corporate Culture, (2005), Retrieved on 24 June 2010 from http://viewfromthemountain.typepad.com/applepeels/2005/07/the_apple_corpo.html Read More