Leadership and Management of Strategic Change - Research Paper Example

 Leadership and Management of Strategic Change Introduction The success of organisations in the 21st century is influenced by its ability to adapt to the dynamic and robust business environment filled with competition. Different organisations have been forced out of operations due to their inability to cope with the changes and the pressures associated with the hostile business milieu. One of the approaches that winners have adopted, which has enabled them to remain in operation and to operate profitably, is through the development of strategic change management structures. Strategic change management is a process that involves the building of structures that are capable to adapt to the hostile business environment and enable consumers, stakeholders and the society to coexist in mutual relationship (Naranjo-Gil, Hartmann & Maas, 2008). Through the management of change, an organization develops the ability to handle different emerging situation within its internal operations and in the external environment responsible for its success (Naranjo-Gil, Hartmann & Maas, 2008). One such organization that has succeeded through the development of strategic change management approaches is apple; a Cupertino, California based Technology Company. Started at a time when IBM controlled the computer industry, apple has revolutionized to become a major player in computer, smartphone and home appliance market. The strategic change management approaches that were adopted under the leadership of Steve jobs have been attributed to the great image and performance that the company has enjoyed in the recent past (Wonglimpiyarat, 2012). In this paper, strategic change management approaches and creative leadership will be discussed in relation to apple Inc. the level of creativity, innovation and strategic change approaches adopted by the company in the face of the rising competition from other companies such as Samsung, nokia among others will also be discussed. Change management and leadership An organisation’s ability to effectively manage the changing dynamics within its own operations influences its ability to rise above the challenges and remain competitive. One approach that has been used in the process of managing the need for change is through the development of strong leadership and mentorship programs. Organisations must be able to develop structures that will enable the management of the organization to identify and respond to market challenges pro, kplty before they can affect the overall performance of the organization. Leadership is essential in the success of any organization and this is the motivation that Steve jobs provided to his employees during his time at the leadership of apple. The same model has been successfully adopted by tim cooks and this has enabled the company to survive the murky industry and remain a strong market brand. Leadership involves the ability of the organization top brass to do the rights things that aim at fulfilling the objective of the organization while meeting the needs of the employees and the customers. Management however involves the ability of the organization to do the right thing; a process that may go beyond the ethical roles of leadership and adopt the end justifies the means mentality. Therefore, the success of any organizational management process must seek to blend leadership with management to ensure that it succeeds and achieves the overall objectives (Wonglimpiyarat, 2012). In the management of strategic change, the company that will be analysed in this report has demonstrated different leadership approaches can be adopted as. Management theories have been developed to explain different approaches that have been employed in organisations to enhance the performance of the employees and increase the possibility of achieving the organizational goals. Classical approaches of management and leadership has been employed with varying success in various organisations from time immemorial (Wonglimpiyarat, 2012). This was attributed to the benefits that this approach provided to the managers that enabled them to handle the customer’s demands without compromising their internal services to the employees. Under classical approach of management and leadership, the principle of coordination is employed and this creates a harmonious environment where all employees work towards the implementation of the organisation’s objectives. It also offers room for unity of action that is characterised by the respect for authority and use of disciplined approaches that applies to all employees and managers alike (Wonglimpiyarat, 2012). Classical approach of management of also applies the scalar principle that highlights the hierarchy of power and delegation of responsibilities to different employees in the organization. One of the mind-sets of the classical theory of management is the desire to increase productivity while maintaining employee satisfaction. As a result, organizational leaders who adopt this approach work towards develop a standard method of working towards organizational productivity and profitability. As a result, such managers develop an environment that enhances division of labour and equality in the treatment and handling of all employees. This theory focuses on the division of labour to enable an organization witness a smooth production process that guarantees productivity and profitability. Creative leadership of strategic change at apple In the 1990s, apple faced a bleak future with no possibility of succeeding in the tough technology market due to the entry of other well-oiled multinationals. To many analysts, the chances of the company to succeed were slim and this could have forced the company into a merger or even a takeover. However, Steve jobs introduced a new strategic management model that enabled the company to rebrand and change from a struggling California based company to a multinational with massive operation and productivity cost (Wonglimpiyarat, 2012). The 2014 global electronic consumer outlook report indicated that changes in the electronic market have resulted into suffering for a number of companies who cannot sustain the heat. Only two companies have remained steadfast that is Samsung electronics and apple Inc. that has been attributed to the organisations’ approach to strategic decision making. Samsung and apple today controls the lion share of the world’s electronic market, which has enabled them to grow their revenue base and increase their profitability. These companies are believed to have remained relevant in this dynamic market due to their abilities to blend talent, innovation and top of the class marketing and brand development strategies supported by clear mastery of the sector’s value chain and distribution processes. The position of the two companies and especially apple Inc has been attributed to changes, which have occurred in the electronic market which has given the organisations an age over other competitors in the market. One of the major changes that occurred in the electronic consumer was the introduction of an environment that encouraged the winner-takes-it-all notion thus making second placed companies to struggle for survival. The electronic consumer industry changed into a sector that favoured the top two placed companies and discouraged the growth of the rest. The companies that emerged into the first and second position were provided with enough market support that encouraged cut-throat competition between them that bordered on innovation, market control and strategic management coupled with proper marketing strategies (Poblador, 2014). The market has for long encouraged the growth of Samsung and apple and this explains the high competition characterised by patent lawsuits between the companies. It is this environment that apple under Steve jobs manipulated and strategically managed to cut a major role for itself in the global market. A comparison of the top two firms in terms of revenue-generated reveals the disparity and demonstrates the advantage that this natural corporate occurrence gives to the top two companies (Wonglimpiyarat, 2012). These companies generate revenues way much above the revenues of the other companies below them in the tier combined. In 2012, Samsung and apple had total revenue of 45% for apple and 22% for Samsung while the remaining was shared among the other companies. This shows the competitive advantage that apple has continued to enjoy despite the high number of traditional players in this sector who initially had consumers loyal to their brands. With the market advantage that enjoy, apple develop proper strategic plans that enabled it to remain at the top through the development of proper marketing and distribution channels. One of the strategic decisions and approaches made by apple to benefit from the changes in the environment is the development of profit pursuit. To avoid increasing its market presence without significant market control, apple changed from the tradition of increasing product brands into developing a single great brand at a time. This enabled it to increase its pool of loyal consumers as most of its products had special characteristics that made them favourable to the consumers. This also enabled the company to reduce the cost of operations but increase the research and development cost thus increasing innovation and development of new better consumer electronics (Poblador, 2014). Leadership of creativity at apple The success of apple at the beginning of the 21st century has been attributed to the leadership approach that its founder and former CEO Steve jobs adopted. Through his leadership, apple adopted a number of change management strategies that enabled it to sail through the murky waters of technology market and become one of the greatest computer companies in the United States. The approaches adopted by Steve jobs were also inherited by tim cooks who has managed to steer the company above the competition in a post job’s era. One of the greatest success of apple was the decision to diversify into other electronics apart from office and personal computers. Today, apple has specialised in the area of audio music, the production of sleek smartphones among other electronics. During Steve jobs reign as the chief executive officer of the apple Inc., the company posted significant progress and this enabled it to rise to the second position globally. Some of the corporate and strategic decisions implemented by the organisation involved the development of strong corporate brands that increased the base of loyal consumers, brand image and innovation and marketing and distribution strategies. It has been noted that no organisation in business history has posed indefinite increase in stock price as apple did under Steve jobs. The leadership skills of Steve jobs motivated the organisation and gave it the momentum to grow and increase its competitive strength by asserting its presence in the highly competitive market. His exceptional leadership abilities and skills are attributed to the current position of the company as many analysts argue that the company still uses his strategies and approaches of leadership and management. However, when Steve jobs died, pundits were first to predict the fall of apple as they believed no individual had the capabilities to develop an organisation with great abilities and innovative spirit as done by Steve jobs. Tim cook took over the mantle after Steve jobs and the in tray was definitely full not just with the assignments that involve raising the image of the organisation, but proving critics wrong. This is exactly what cook did because two years since the death of Steve jobs; apple has maintained its stream of innovative products and retained its market position. This success can be attributed to the continued adoption of the strategies developed by Steve jobs years before he died which included a roadmap for the organisation to the top position. During his reign as the CEO, Tim cook has overseen the growth of the company’s profits to $4 billion in the last quarter of 2012 (Poblador, 2014). At a time when other emerging companies were willing to enter into the audio music company stores due to the ease of entry and lack of barriers, apple has adopted a number of merger and acquisition strategies, which have been viewed as a way of protecting its traditional market. For example, the recent announcement by the company of planned major takeover of Beats, a company that specialises in audio music and music accessories, indicated its willingness to diversify into other sectors of the industry to protect its market performance. This has been attributed to strategic creativity and innovations at the company spearheaded by the chief executive in conjunction with other staff members (Zhang & Rajagopalan, 2010). Successful practises at apple Apple as it is known today can be attributed to the successful change practises that it adopted in the face of the rough and unpromising market. The identification of these changes and the practises adopted to make them a success will be discussed from a dimensional strategic analysis of the company and its financial strengths. Three-dimensional strategic analyses involve the analysis of an organisation’s financial strength in relation to other competitors, the overall market share controlled by the company and the relative market strength. Apple has remained a major market player since Steve jobs reinvented apple and introduced new ways of doing business, developing new products and marketing. His approaches have enabled the business to remain afloat despite the challenges that other market players have continued to face due to stiff competition and a large number of market players (Poblador, 2014). On the background of statements like ‘apple is richer than the united states government’ lies the financial strength of the computer and phone giant apple. The company has grown to increase its financial strength significantly and is today considered as one of the richest American companies. When Steve jobs died aged 58, he left a company that was second largest in market capitalisation, second only to ExxonMobil. However, under the leadership of the able Tim cook, apple has grown and is today the richest company in the united states and holds a major role in the global business (Zhang & Rajagopalan, 2010). Apple remains of the most profitable businesses in the world currently holding the 8th position in terms of annual profits raked by the business on an annual basis. One of the advantages attributed to the massive strength of the company is its restricted product line that has over the years focused on iPods, iPhones and iPads among other specific product brands. The company sold over 20.34 million phones in the first quarter of 2013, which translates to 4.6% of all phones sold globally and 9.7% in the United States. A comparison of apple’s performance since 2009 to 2011 with other companies including HP and dell shows that the company’s sales, income, ratios have been improving on the background of increased competition. In 2011, apple led in terms of overall sales by posting over $26 billion dollars followed distantly be HP and Dell. The operating profits margin of the company has also remained relatively high as compared to the two other companies with apples value significantly increasing within the three years (Zhang & Rajagopalan, 2010). Apart from financial ability and power, apple has continued to control a significant proportion of the electronic, computer and phone market, wrestling the dominance of the market from other players like Nokia, Panasonic and Samsung. In 2013, consumer score survey noted that over 192 million people in the united states owned apple smartphones in October, a figure that represented an increase from the July report. The company has thus remained the undisputed market kings controlling over 40% of the United States market and increasing its global share by 1.3% in October 2013 (Cui, Calantone & Griffith, 2011). As apple dominance continue to grow in the international market as smartphone manufacturer and seller, other traditional companies who have over the years controlled the market like HTC and LG continue to go down. Apart from the smartphones, apple has also strategically positioned its mobile operating system in order to wrestle the market dominance of other companies like Google’s android operating system that currently controls the market. Android is used by over 52% of smartphone users in the United States while the remaining percentage shared by apple and blackberry operating systems. The introduction of Microsoft operating systems for mobile phones continues to threaten the dominance of android and the infiltration of the market by apple. Microsoft launched its mobile windows 8 operating system by collaborating with major companies like Nokia Inc and HTC. This approach has continued to impact on the aggressive campaign by the apple to increase the dominance of its mobile operating system in the market of smartphones (Zhang & Rajagopalan, 2010). Despite the low presence of its operating system, the introduction of more mobile phone designs into the market has enabled the company to grow in market capitalisation and overall control. The company released its iPhone 5S, iPhone 5C and the iPad mini with retina display which has fared tremendously well in the market in global markets including japan and china. The apple market strength has received mixed reviews from different market analysts with a significant number of analysts believing that the dominance of the company has slipped significantly and is currently controlled by Samsung. However, apple has had significant market presence in other countries especially in japan, china and the Middle East. The iPhone market in japan and china has increased significantly with the company moving towards controlling over 50% of the smartphone market. The logo of apple has become a much known and common brand in japan and china and the company continues to increase the base of loyal consumers in the region. The white headphones and earphones associated with apple iPad is growing common in the two countries with majority of the youths developing more taste for the product (Cui, Calantone & Griffith, 2011). However, the United States mobile market has continued to slip from the hands of apple and this has been attributed to the massive campaign launched by Google and Microsoft to sell their android and Microsoft software for mobile phones respectively. Google’s android software has raked into the United States market and today controls over 79% of the total market compared to the 13.2% controlled by apple phone operating systems. The current trends post a worrying state for the company even as it continues to introduce more innovative products into the market using their traditional software platform (Cui, Calantone & Griffith, 2011). Mobile phones are based on platform markets that are very essential in the success of any company, new or old in this market. In the platform model of marketing, the use of third parties is so common and this is the approach that Samsung and Nokia have adopted by using Google’s android. In this situation, other companies like Google build products on top of those already constructed by a company like Nokia and this increases the popularity of such products. Apple however manufactures both its mobile phone gadgets plus the operating system upon which they operate. Despite android and apple looking like the dominant players in the global mobile market, apple’s grip is slowly fading and the decrease in relative market share significantly affects the company’s goal of increasing its market presence. While android posted total sales of over 75% of smartphone in the first quarter of 2013, apples sales remained at mere 15%. However, the company’s market share has remained relatively stable and has made significant progress since the beginning of the year (Poblador, 2014). As common in other industry, consumer electronic industry has distinct key success factors that influence the ability of a business to either succeed or fail. One of the major key success factors in consumer industry is the speed of decision and speed of action by the company. Technology is a dynamic area that embraces change on a daily basis and this change influences the ability of any industry player to remain relevant in the face of the stiff market competition and need for market control (Cui, Calantone & Griffith, 2011). Apple has for long mastered the art of speed in decision and action and this has been demonstrated by the ability of the management to move fast in introducing market specific products or correcting anomalies in their products or goods. When Tim cook appointed an operations manager and later realised the inefficiency that the appointed had created, he move so fast to eliminate office and this saved the organisation from further operational difficulties. Such speed in decision and actions was demonstrated in 2011 when apple withdraw an online application from the French market. This created widespread criticism from civil society and threatened to arm the company’s reputation in the country. However, to save face and in line with their understanding of the key success factors, the company withdraw the product and issued an apology to their French consumers (Poblador, 2014). Apart from decision making and action speed, the consumer electronic industry operates under a high-risk environment, which are encountered from different fronts. Inventory liabilities and shortages that have hit the company in the past have increased the volatility of the demand for any company in this industry. This has been the identity of apple for a long time since the company has been known for its ability to develop customer specific goods and customise them to meet the demands of different markets across the world (Cui, Calantone & Griffith, 2011). The final key success factor in the electronic consumer industry is the ability of a business to develop business insight and develop more than just quantitative data on how the business is operating and how it should actually operate. Proper business foresights enable a business to develop proper consumer satisfaction and increase operational efficiency of the company. Business insights borders on the creation of business intelligence and this has been the main pillar of apple as it has been able to forecast the demands of the consumers and any expected change in taste to develop specific taste-oriented products (Hopkins, Mallette & Hopkins, 2013). Comparison of apple success with other companies in the sector The success of the company cannot be analysed without providing the growth levels and successful operations of other companies in the sector. Apple adopted strategic leadership and change management approaches that enabled it to manage the highly competitive computer and consumer technology market with ease despite the high competition. Among the companies that have continued to exert pressure on the marketing approaches of the company are Dell, Samsung among other smartphone and computer manufacturers in the united states and beyond. Other microprocessor companies such as intel have also influenced the strategic decision making framework by apple as far as market diversification and change management is concerned. This section will discuss the levels of competition that apple has faced in the recent years with its major competitors within the technology industry (Naranjo-Gil, Hartmann & Maas, 2008). First mover is a marketing principle and tag assigned to organisations that move into a specific market segment first before any other competitor. A first market entrant enjoys specific advantages associated with the creation of consumer loyalty and the development of a strong consumer base. As a company that first developed the iPhone smartphone and introduced into the market, apple has continued to enjoy the first mover impacts against other companies like Google’s androids. When apple introduced the iPhone, a number of other companies began independent development of software application which could operate on the smartphone (Tamosiunas, 2010). Strategic management at Intel has been attributed to its massive growth and success despite the current competition and market volatility due to the development of substitute products. Investment in both capital and human resource has enhanced the capabilities of the company to grow despite the challenges created by the strong competition from its rivals. The development of heterogeneous resources has strengthened the capability of Intel to compete favourably with ADM as such resources cushion any losses arising from this. One of the major resources used by the organization to stamp its authority in the market is the Intel brand that has been in the microprocessor market for over 50 years. Within the United States and other major economies, microprocessor technology and microchip products have been associated with Intel despite the presence of strong competition (Hopkins, Mallette & Hopkins, 2013). The company has significantly used this in an effort to prevent the development of ADM as a competing brand despite offering substitute products to the market. As competition grows and other companies seek to enter markets previously dominated by Intel, the company has relied on its in-house technology and a pool of experienced and train microchip engineers to emerge top (Burrows, 2008). With a strong and reliable research and development unit in Hillsboro, Oregon, Intel has continued to stamp its authority in the market by producing technologically advanced chips and motherboards. This has continued to grant Intel competitive advantage over other market players and companies who have continued to produce and market substitute products (Cui, Calantone & Griffith, 2011). Developed in the 60s, Intel has amassed a large pool of resources that has conferred upon the company competitive advantage not enjoyed by other competitors. Based in Santa Clara California, Intel has massive physical asset investments that range from equipment and buildings. These have been used by the company for backup whenever faced with challenges in the market especially due to the actions of the competitors. Other intangible assets and resources controlled by the company include a globally known brand name, a constant market share in the United States and beyond (Tamosiunas, 2010). This created significant market presence and knowledge of their products and earned the first mover advantage. Apple has used the first mover advantage to continue spreading its presence in other economies including japan and china despite tough competition from Samsung. It is based on the first mover notion that the company sued Samsung for patent theft and ended up being paid by the company. As a first mover, the company controls a significant number of patents related to the shape, operations and features of smartphone. Most of the smartphones marketed by the company have similar features and operate on a similar platform thus increasing the loyalty base among the consumers (Burrows, 2008). Recommendations on how to improve the implementation of change Strategic change management is essential for the success of any company, domestic or multinational as it provides opportunities to respond to the dynamics within the market. Different organisations have adopted independent approaches towards the process of change and the success rate has varied based on the nature of the industry and the strength of the competitors. Apple has had a relatively successful episode since jobs adopted his market dependent change management and response approach (Hopkins, Mallette & Hopkins, 2013). However, the company under the leadership of Cook can still make strategic approaches in response to the market which may have changed as compared to the time of Steve jobs. In this section, recommendations will be provided on the strategic change management approaches that the company can adopt to enable it keep up its good performance in the face of new market entrants and emerging competitive forces (Tamosiunas, 2010). During the times of Steve jobs, the management of organisations were obsessed with the need to achieve organizational stability through a predictable growth pattern and stable earnings. This was possible due to the fact that the market was underdeveloped and competition was based on other factors apart from the need to attract and retain customers as is the case today (Shivakumar, 2014). The emergence of market transparency, increased labour mobility, emergence of multinationals which increased global capital flows and the development of more instant communication approaches upset this balance and led to the need for new change management approaches.to continue with its great performance, apple must embrace change management in a humanly manner to eliminate employee resistance. For example, changes, which may affect the job security of some of the employees, must be adopted in a well-calculated approach in order to prevent potential uncertainties and resistance. For example, the company should develop a formal change approach that follows a specific hierarchy, which involves the inclusion of the employees, the leadership and the stakeholders of the organization (Sahoo, 2012). This will not only increase the morale and motivation of the employees but also eliminate the possibility of resistance and uncertainties among the same staff members. Embracing and implementing change must begin from the top management level because all employees irrespective of their positions dread the possibility of change. As a result, the company must involve the top management and leadership of the organization immediately below cooks to embrace and support the changes (Tamosiunas, 2010). This will make it possible for the same to be accepted and embraced by other employees at the lowest management level and normal staff members. In the face of the tough economic times, any change approaches adopted must not increase the pressure on the employees that will only act to demotivate them and reduce their productivity (Hopkins, Mallette & Hopkins, 2013). Conclusion Apple is a perfect example of an organization that has weathered the storm and succeeded in an industry that has been characterized with stiff competition and negative business practices. Despite the presence of big multinationals like Dell, Nokia, and Samsung among others, apple worked its way up through the adoption of proper and strategic change management assisted with strong leadership capabilities (Shivakumar, 2014). Despite the success and the progress that the company has so far made, the leadership of cook must adopt proper approaches to manage the dynamics and the changes in the sector that have been witnessed in a post job’s era. 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