Features of Corporate Decision-Making - Essay Example

? Corporate Decision-Making (school) Table of Contents Introduction................................................................................................................. 4 Body............................................................................................................................ 4 Innovativeness................................................................................................ 4 Diversification................................................................................................ 5 Learning from mistakes................................................................................. 6 Cultural sensitivity........................................................................................ 7 Conclusion................................................................................................................ 9 References................................................................................................................ 10 Executive Summary Effective decision-making is based on several qualities. These qualities include: innovativeness, diversification, learning from mistakes, and cultural sensitivity. Innovativeness is based on the ability to come up with new products and to market these products successfully. Diversification is based on the ability of the company to market different products and not be concentrated on only one or a few products. Learning from mistakes is about making the adjustments after issues in application and decision making have been seen. Cultural sensitivity, on the other hand, is about considering the culture of the corporation and making decisions based on such culture. In relation to Apple Corporation, they were able to meet these elements when they established various innovations and were able to establish a diverse market. They also learned from their mistakes throughout the years and re-employed Steve Jobs to reinvigorate the company. As a result, they have risen among the ranks of the most profitable and powerful corporations in the world. Corporate Decision-making Introduction Successful and effective corporations have distinct qualities and decision-making processes which often help them occupy such positions of success. These features are often distinctive to each corporation, based on their goals, activities, marketing, as well as the qualities of their consumers. This essay shall evaluate literature in order to establish the key features of effective corporate decision-making and assess how well these are being applied in an organization I know well. It will first present several studies and literature on effective practices of corporations in their decision-making activities. It will then discuss the application of such practices to Apple Corporation. Lastly, a summary and conclusion will evaluate the different elements being discussed in this paper on corporate decision-making. This essay is being carried out in order to establish a clear and well supported assessment of corporate decision-making, including the qualities which make for successful practice. Body Innovativeness In the current age of high stakes competition among businesses, various strategies and features are apparent for corporations seeking and keeping success. One of the qualities seen among these successful corporations is that they are major innovators (Morris, Kuratko and Covin, 2010). Successful corporations are distinctly set apart because of the innovations they seem to constantly introduce into the market. In a paper by Uotila et al. (2009), they discuss that in order for corporations to be successful, they need to balance exploration and exploitation activities. In effect, as they explore and establish various innovations, they also need to temper their impact on society and on the environment. Their power to introduce new products and to explore new activities is at the very forefront of their success, and their ability to minimize their impact on the environment and on society is also a required element in their continued success (Uotila et al., 2009). In a study by Hayes (2005), it is discussed that successful businesses and corporations are those which consider themselves innovators. These innovators do not necessarily have to invent or be the first or the best ones in the innovation process; however, they have to be the first to disrupt the market in a substantial way, enough to promote changes in the behaviour of the consumers. These innovative corporations are also those that can establish designs which are easy to adopt (Hayes, 2005). In short, product leadership and innovation are a strong mark of successful corporations. Diversification Diversification is also an important quality of successful corporations. Diversification includes ventures into various products, within the same line as their main business or in related businesses (Silverman, 2002). Falling into the same type of business with hardly any other ventures or products to market is a major pitfall for failing corporations. In a paper by Kim et al. (2008), the authors discuss that corporate diversification as well as CEO duality help ensure corporate success. Based on data gathered from Fortune 1000 US corporations, CEO’s duality and their diversification in unrelated businesses was positively related to higher corporate success (Kim et al., 2008). In effect, with more unrelated diversification for corporations, the degree of success for these corporations has proven to be higher (Kim et al., 2008). Learning from Mistakes It is also important for successful corporations to note their mistakes (Stadler, 2011a). For successful corporations, it may be enjoyable to discuss success. These discussions are crucial in supporting and inspiring employees. However, what distinctly separates the successful companies from the failing ones is the former’s ability to remember its failings and mistakes (Stadler, 2011a). This can be seen in the case of Shell Corporation, after the Second World War under the leadership of Sir Henri Deterding. Under his leadership, the corporation gained much success; however, it also came very close to disaster when Deterding saw Hitler as a personality who could defend Europe against the communists (Stadler, 2011b). This company learned from this near disaster. In 1964, the company did not heed the advice of McKinsey & Company when they sought to appoint an American chief executive officer to helm the corporation (Stadler, 2011b). A committee was, however, appointed as its top executive with the chairman more or less serving the same functions as the other committee members. This type of committee leadership helped to support Shell’s success (Stadler, 2011b). In other words, it veered away from the dangers of single leadership as they discovered their vulnerabilities as a corporation managed by one CEO. Learning from their mistake allowed the corporation to evolve into a stronger and more enlightened corporation. Cultural Sensitivity Another quality of successful corporations is their ability to manage change in a culturally sensitive manner (Moran et al., 2010). Most successful corporations survive for many years because of their ability to adapt to major cultural changes and transformations. Change is not an easy task for corporations; however, better corporations are those which can effect change in culturally sensitive ways (Moran et al., 2010). Under these conditions, these corporations are able to adapt change by portraying significant respect and understanding of the practices within organizations. This can be easily seen in the case of Siemens which underwent restructuring in the 1960s. During such restructuring, they left various traditional practices which had been in place for as long as 20 years (Hossenlopp, 2010). AEG, on the other hand, applied a less sensitive approach to change (Stadler, 2011a). Change was first seen with the designation of Hans Heyne in the early 1960s. Heyne immediately established a culture where managers could not carry out actual responsibilities. As a result, a culture of fear became dominant (Stadler, 2011a). Various managers left the company, unable to stand the changes being implemented. The few left were nothing more than followers of Heyne, blindly obedient to his whims. The actions of this corporation caused the loss of valuable talent, significantly affecting their efficacy in adapting change. This situation indicates the importance of corporations implementing change while still considering the corporate culture and the will of their employees (Armstrong, 1996). Successful corporations are those that listen to their employees, communicate their plans and implement change during the final stage (Marchington and Wilkinson, 2005). In following such process, it is possible for corporations to gain more substantive change and to secure success in the long run (Stadler, 2011b). Apple Corporation The current success of Apple Corporation demonstrates the various qualities as described above. First and foremost, Apple Corporation is considered a major innovator in computer and information technology. More so, under the leadership of the late Steve Jobs, this corporation introduced major innovations in computer and communication technology (Young and Simon, 2005). In recent years, it has been considered a major success in its introduction of various technologies, including the portable media player (iPod), smartphones (iPhone), and the tablet computer (iPad). Other corporations have attempted to replicate these innovations; however, Apple has already been the first to gain major success in these ventures (Young and Simon, 2005). Other corporations are experiencing difficulties in gaining the same success and innovations which Apple has managed to achieve in recent years. In fact, any attempt to replicate its innovations has recently been deemed as copyright infringement (Slind-Flor, 2012). Such innovative leadership has, therefore, ensured that Apple can dominate in the use of these products. This can only mean more success for the corporation. Diversification is also a quality which Apple Corporation possesses. Apple has mostly been known as a computer technology corporation, but its products have not been focused on computers alone (Daft and Lane, 2008). Its venture towards portable media players, televisions, and smartphones has significantly increased its profitability. Its computer and electronic applications have also diversified to encompass photos, videos, video games, and a variety of computer software (operating systems, iTunes, iCloud, Quicktime, etc) (Daft and Lane, 2008). The corporation did not concentrate on computer technology alone, but it diversified into other related products; in the process, it has managed to gain significant growth as a corporation. Another quality of the corporation which has managed to ensure its success is that it has managed to learn from its mistakes throughout the years. A major mistake of the corporation was to push away one of its major innovators, Steve Jobs. He was muscled out of the corporation in the early 1980s when the corporation decided to move towards a direction different from what Steve Jobs envisioned (Gillam, 2008). Significant changes in the corporate management were seen throughout the years; however, no significant success was seen with these changes (Gillam, 2008). The corporation, however, eventually learned its lesson and invited Steve Jobs back as interim CEO to assist in the restructuring of the corporation (Gillam, 2008). With the changes and innovations which Steve Jobs introduced, the corporation slowly gained the success it has long been seeking throughout the years. Conclusion Successful corporate decision-making is based on distinct qualities mostly founded on strong corporate management techniques. These qualities include: innovation, diversification, learning from mistakes, and cultural sensitivity in applying change. Being an innovator or a technology leader is an important quality for corporations. It is a means of primarily dominating the corporate scene and increasing profitability. Diversification is also a means of cornering the market on various products. Learning from mistakes allows corporations to rise after every fall, making the necessary adjustments to avoid the same mistakes. Finally, cultural sensitivity in applying change allows for corporations to listen to their employees and valuing their contributions to the corporation. These elements were seen in Apple Corporation. It became a major innovator in computer technology and related devices. It diversified its products, establishing a bigger and wider control of computer and communication technology. It learned from its mistakes and appointed Steve Jobs as its CEO. These qualities in its corporate decision-making have successfully established it as one of the strongest and most profitable corporations in the world. As it continues to make these corporate decision, Apple will undoubtedly retain its profitability and sustainability as a corporate leader. References Armstrong, M., 1996. A handbook of personnel management practice. London: Kogan Page. Daft, R. and Lane, P., 2008. The leadership experience. London: Cengage Learning. Gillam, S., 2008. Steve Jobs: Apple & Ipod Wizard. Minnesota: ABDO. Hayes, N., 2005. The winner takes it all. IEEE Explore, 84(5), pp. 32–35. Hossenlopp, R., 2010. Organizational project management: linking strategy and projects. London: Management Concepts. Kim, K., Al-Shammari, H., Kim, B. and Lee, S., 2008. CEO duality leadership and corporate diversification behaviour. J Bus Res, pp. 1–8. Marchington, M. and Wilkinson, A., 2005. Human resource management at work. London: CIPD Publishing. Moran, R., Harris, P. and Moran, S., 2010. Managing cultural differences: global leadership strategies for cross-cultural business success. London: Routledge. Morris, M., Kuratko, D. and Covin, J., 2010. Corporate entrepreneurship & innovation. London: Cengage Learning. Silverman, B., 2002. Technological resources and the logic of corporate diversification. London: Taylor & Francis. Slind-Flor, V., 2012. Samsung, LG, North Face: intellectual property. Bloomberg. [Online] Available at: http://www.bloomberg.com/news/2012-10-12/samsung-lg-north-face-intellectual-property.html [Accessed 13 October 2012]. Stadler, C., 2011a. How to make your company an enduring success. Warwick Business School. [Online] Available at: http://www2.warwick.ac.uk/knowledge/business/centurychampions/ [Accessed 12 October 2012]. Stadler, C., 2011b. Enduring success: what we can learn from the history of outstanding corporations. California: Stanford University Press. Sull, D., 2005. Why good companies go bad and how great managers remake them. Massachusetts: Harvard Business Press. Uotila, J., Maula, M., Keill, T. and Zahra, S., 2008. Exploration, exploitation, and financial performance: analysis of S&P 500 corporations. Strategic Management Journal, 30(2), pp. 221–231. Young, J. and Simon, W., 2005. iCon Steve Jobs: the greatest second act in the history of business. London: John Wiley & Sons. Read More