How Culture Is Expressed in Apple Inc - Case Study Example

Organisational Leadership and Performance: How Culture is expressed in an Organisation Name: University: Instructor: Course Title: Date: How Culture is expressed in an Organisation: A Case Study of Apple Inc. Introduction Each and every company has its own culture. According to Wooten (2010), an organisational culture entails “ the shared beliefs, principles, values, and assumptions that shape behaviour by building commitment, providing direction, establishing a collective identity, and creating a community” (p. 8). Thus, culture manifests itself in the overall behaviour of the company in order for the organisation to adapt to the environment it operates. Essentially, the culture holds the company strategy together. However, culture is only effective if the management is able to align it with values, resources, goals and the organisation’s environment. At Apple, the management has created a culture whose driving force is the desire to make great and unique products. Consequently, the key strategy of the company has been innovation and creativity. All employees are challenged and encouraged to take up this as they work towards producing unique products meeting the demands of consumers. This paper explores the concept of organisations culture and how this expression helps or hinders the organisation’s effectiveness using apple as a case study. Brief Historical Background Apple Inc. was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald G. Wayne. At that time, the company was referred to as Apple Computer Company. According to Iliev et al (2004), the three set their initial business goal that was to see the company grow to $500 million in a period of ten years. However, they were surprised when the company passed that target within a period of five years. By then, the microcomputer industry was only characterised by companies involved in “the manufacture and sale of small desktop computers” (p. 11). More so, the central processing units of these microcomputers were the microprocessors. The major players in the industry in the mid 1970’s were IBM (they were producing what was termed has the “industry benchmark”), Atari, HP (AT&T) and Commodore. Thus, Apple as a new entrant into the market faced a lot of competition. Furthermore, given that the company did not comply with standards of either manufacturing hardware or software, dealers, as well as consumers that only wanted to get one of these were confused. On the incorporation of Apple Computers Company, responsibilities were divided among the founders. Thus, Jobs took over marketing and engineering, Wozniak was in charge of engineering and Wayne was in charge of documentation and mechanical engineering. Both Jobs and Wozniak each owned 45%, whereas Wayne owned 10% of the company. Given that the company’s first product, the Apple I, did not raise the revenue as expected, the company found itself in financial trouble. Wayne had sold his 10% to the two and hence they needed to look for potential investors. Mike Markkula agreed to provide capital for the two. Iliev et al (2004) says “Luckily, they could raise venture capital provided by Mike Marrkula and moved to a new corporate HQ in Cupertino, California” (p. 12). According to Satariano (2012) of Bloomberg News, Apple is currently ranked as the most valuable company in the world. Currently, Apple Inc. is involved in the designing, manufacture, as well as the marketing of personal computers. According to Richey (2008), Apple Inc. is also involved in the sale of other related services, software, peripherals, as well as offering networking solutions to its consumers. Wall Street Journal (2012) also corroborates this statement. As a company, Apple is one of the leading asset management companies in the world. It is involved in the creation and management of both software and hardware (Digital Marketing, 2011). Bajarin (2011) notes that “Apple competitors delight in going head-to-head with Apple in hardware, because they can compete with them at this level. But it is the combinations of its hardware that is created specifically to be a vehicle for its software and the software itself that really sets Apple apart”. It means that companies are competing with Apple in hardware manufacture but what differentiates Apple from the rest is its ability to develop software for its products. For instance, if one acquired a Dell laptop, the operating system could be Windows 7 from Microsoft. On the other hand, Apple has its own software for its products. One such software from Apple is Panther (Hawn, 2004). Innovation and Unique Product Line Culture For over years, since the former CEO of Apple Inc. Steve Jobs took over the management of the company, the organisational culture has been defined by important values of creativity and innovation. Jobs did emphasize the importance of these two values by use of statements like “Innovate, that’s what we do” and “Apple is the most creative technology company out there” (Hawn, 2004). By valuing innovation so much, Apple Inc. has been first in launching products that have come to be used as benchmarks in the technology industry. For instance, the 2003 launches included the G5 desktop, the iTunes, a 15-inch laptop that had an ambient-lit keyboard (could be used in darkness), wireless mouse and Panther (operating system). Thus, innovation is the cornerstone to Apple Inc.’s organisational culture giving it a competitive advantage over its rivals. However, in order to sustain this competitive advantage, the management of Apple Inc. has a strict policy where employees are restricted from talking about future products. Apple management has been able to spur the company to greater heights because of giving priority to innovation to drive their products. By embracing technology, the company has been a pace setter in the industry by being the first in developing new and unique products, as well as services. According to Modi et al. (2010), these products include the Mac, iPhone, iPod and Apple TV. These products have an elegant design and good quality compared to what is offered by the rivals in the industry. The company realised that diversification does not ensure increasing the market share. It only means that a company tries to come up with what rivals are already doing. As such, Apple has identified its niche market and given it the most attention it deserves. The company has specialised in the Smartphone market where it is currently ranked the best. This has seen the company try and improve on its existing products to ensure that customer needs are fully met. Apple Insider (2012) reported “The latest research from Strategy Analytics pegged Apple as the "star performer" among mobile phone makers last quarter”. In many business organisations, there is a division of the products into different categories. “Almost all consumers electronic companies are organized in Business Units which tend to be fully integrated with their own R&D and P&L” (Ragnetti, 2011). As a result, the created units end up competing among each other/ cannibalising other line of products from the same company. This leads to inconveniences. However, this is not the case with Apple. The company is organised in terms of managing products and not categories. It has one R&D base that applies to all its products and locks at one P&L despite its huge turnover. This organisational strategy has led to the company’s products being compatible with one another, and accessories marching on its multiple products thus enhancing fan among consumer when using the products. Besides enjoying in the course of using Apple products, the unique organisational strategy has also lead to incredible trust among its consumers. Apple has for a long time, especially under the late CEO, Steve Jobs, pursued the innovation and creativity as the core competencies of the organisation. However, despite all the innovation, the company was ranked lowly ninth in terms of its financial muscle. This was in comparison to its competitors as per the financial year which ended September 27, 2003. Much revenue for the company came from the sale of personal computers. Although the company was a pacesetter in terms of innovation, it could not just match the revenues of its competitors like Dell, HP, IBM and Acer. It was so ironical given that the Time magazine had named the iTunes as the “Coolest invention of 2003” (Hawn, 2004). This then underlines the weakness in the company culture of pursuing innovation at expense of other integral factors. Human Resource Centred Organisation & Leadership Centred Management Culture Just like in any organisation, the human resource management department at Apple Inc. has recognized the critical role played by the organisational structure and the people that build it. The strategy of the department has been to practically respond to the competence, creativity, as well as employees, working as individuals and teams, go through. According to Iliev et al. (2004), it is the human resources in Apple Inc. that is the source of all value enhancing tasks relating to efficiency, innovation, quality and responsiveness. For instance, for over years, Apple Inc.’s human resource department objective has been to ensure that it provides qualified personnel to the company in order to assure the customers of superior performance. One of the objectives reads “Employees should at all times strive for the highest quality in all they do” (p. 89). This is in terms of the products that are offered on the market. A report by the United States Securities and Exchange Commission (2011, pp. 9) shows that Apple Inc. had approximately 60,400 permanent employees and 2,900 employees who were on A contract basis. To show that the company has the best products on the market, courtesy of its employees, a survey was carried out in the US among technology professionals in 2004. From the survey, one of the primary reasons as to why people work for Apple Inc. is because of the admiration that they have for the products and services it offers. Of those interviewed, 45% said their motivation to work in Apple is because they actually admire their products. Additionally, 15% said they are motivated to work for the company because of the cutting-edge technology adopted by the company. A further 15% said Apple Inc. offers a challenging, as well as interesting work and it is good to work in such an environment. Moreover, 6% of technology professionals in the US believe that Apple Inc. provides a great working environment. This is in terms of the career progression opportunities, as well as the organisational culture that has been put in place by the management. 6% are said to admire Apple Inc. because of the stability that exists within the organisation. Stability has been created at Apple Inc. because of the management strategy that is in place. However, 6% said that they are motivated to work at Apple Inc. because of some other reasons which are better known to themselves (Iliev et al., 2004, pp.89). Strategic Alignment Culture Strategic alignment refers to the capacity of an organisation to bring the activities of different departments and the human resources in line with the broader organisational objectives. This ensures that different divisions and employees work jointly to achieve stated company goals. At Apple, this has been embedded in the approach taken by former CEO, Steve Jobs. The approach, according to Wooten (2010, pp.2), is referred to as positive deviant performance. Essentially, Jobs has been able to align the different components of Apple to achieve what is beyond the expectations of the stakeholders, as well as outside observers. In order to achieve this, Jobs has built the company by seizing opportunities for innovation, good organisational culture and the core capabilities. Jobs once said “And we’ve got the technology” (Wooten, 2010, p. 8).This has resulted into attainment of company’s set goals. More so, the company has adopted a strategy which is results-oriented meaning that customer needs are met. By seizing opportunities in the external environment, Apple has been able to go beyond just production of personal computers to iPhones and iPods. This has differentiated the company from others who are in the software and hardware development field. Jobs had visualized the long term goals of Apple ensuring that the company seizes opportunities that come up. The core capability that has been core to the strategy of Apple is innovation. As a result, the company has gone beyond just developing software and hardware to products that “wow” consumers (Wooten, 2010, p. 6). For instance, Jobs once said “Let’s make a great phone that we fall in love with” (Wooten, 2010, p. 8). Conclusion Apple exhibits various organisational cultures in different angles. One thing that emerges is that the organisation culture of apple was well defined during Steve Job’s tenure. Job was able to align the organisational culture with other key components vital for success. By having a vision driven by innovation, creativity, risk-taking and encouraged experimentation among Apple employees. Finally, Jobs was on the fore front of ensuring that there is free sharing of organisation knowledge. Employees are encouraged to create, acquire, transfer and retain organisational knowledge in order to produce great results as a whole. He embraced teamwork from his words “We’re going to do it, let’s try” (Wooten, 2010, p. 8). References Apple Insider, 2012. Apple's iPhone believed to account for record 8% of global mobile phone market. [Online] Available at: . [Accessed on July 30, 2012]. Bajarin, T., 2011. How Apple Outsmarts Its Competitors. [Online] Available at: . [Accessed on July 30, 2012]. Digital Marketing, 2011. Apple’s 2011 competitors. [Online] Available at: . [Accessed on July 30, 2012]. Hawn, C., 2004. If He's So Smart...Steve Jobs, Apple, and the Limits of Innovation. [online] Available at: . [Accessed on July 30, 2012]. Iliev, V., Lindinger, A. & Poettler, G., 2004. Apple Computer Inc. Strategic Audit. [online] Available at: http://www.andreaslindinger.net/downloads/strategicmgmts- lindingeretal.pdf. [Accessed on July 30, 2012]. Modi et al, 2010. Software Engineering Team Project on Apple, Inc. [Online] Available at: http://www.cse.ohio-state.edu/~patali/files/Apple_Inc.pdf.> [Accessed on July 30, 2012]. Ragnetti, A., 2011. Innovation, Management, Simplicity. [Online] Available at: [Accessed on July 30, 2012]. Richey, J., 2008. Financial Analysis of Apple, Inc. [Online] Available at: http://cntb.express- files.com/?q=exploring+strategy+9th+edition+pdf&wmid=000&subwmid=352b&ca=eb6 4cb7bceb55cdb248b6a591e0b2fb4> [Accessed on July 30, 2012]. Satariano, A., 2012. Bloomberg News. Apple IPhone 5 May Debut in October, Analyst Munster Says. [Online] Available at: < http://www.businessweek.com/news/2012-04-19/apple- iphone-5-release-may-come-in-october-piper-jaffray-says> [Accessed on July 30, 2012]. Wooten, L. P., 2010. Building a Company the Steve Jobs’ Way: A Positive Deviance Approach to Strategy. [online] Available at: [Accessed on July 30, 2012]. Read More