Functions and Management Issues in Global Business - Apple - Essay Example

and Section # of Apple Introduction: Multinationals such as McDonalds and Nokia, have revolutionized the way business was conducted in the earlier days. While working in an international business, there are certain critical factors that the organization should have complete command over, so that they are able to reap bottom line profitability from the effort across borders. These may be the legal system, quality control across borders, labor standards and supply, demand of the product, management of the processes, financing etc. The parameters of all the critical factors of an organization change as it enters the international market; organizations who have championed such changes are now multinational brands. Such a brand is Apple, which has been successful in building a brand name across the world. Leadership is another critical factor that can drive any drowning organization to the shore. All across the world, there are countless examples of leaders as being the drivers of change and ultimately success in organizations, in countries, in politics and in normal day lives. Therefore, leadership also plays an important role in the effectiveness and success of an organization. This paper will first highlight the important areas of management that are critical to the success and effectiveness of an organization operating in a global world. The organization that has been used as an example is Apple Inc. Apple has seen phenomenal growth in the past few years for its record breaking products such as the iPhone and the iPod and now the iPad. They have revolutionized the lifestyles of millions and this is their philosophy. To follow such a critically different path, it is important to keep in all areas of the business working in cohesion to that a synergy creates, giving extra value to the organization. While working in such a diverse and huge geographical environment, Apple also needs to set up risk management procedures and practices throughout its organization; these will also be discussed. The latter part of the paper will discuss the magnetic personality of the CEO of Apple, Mr. Steve Jobs, who has been leading the corporation from the front to success. The role of leadership in such an environment and the success that the company has seen will also be measured (Donald, 2006). Loyalty – an intangible factor critical to company’s success in an international environment: The international environment makes decision making more complicated, as more controllable and uncontrollable factors enter the overall environment of the organization. In such a time, managing the loyalty of the staff as well as the customers is an equally daunting task. Loyalty from the staff results in products which are competitively better than other entities in the market, these results in a better response and demand for the product. On the other hand, this also develops loyalty on the part of customers as well. Hence, loyalty on the part of the employees generates a chain of loyalties that translates into value for the organization. Loyalty from customers results in repeated purchases from the same brand, for different product categories as well. If an organization is able to generate loyalty from the customers, word-of-mouth marketing helps the organization generate cost-less marketing. Loyalty also provides the company from the cushion as customers is ready to give the organization a benefit of doubt if the company makes a mistake (Gary, 2007). Apple, in this scenario, has been a clear winner. The success of iPod was a pre-requisite for the phenomenal success of iPhone all over the world. This scenario continued when Apple released the iPad. This recent product of Apple was able to generate 2.5 million pre-orders; a sign that brand loyalty in customers for Apple is staggering. Apple has been successful in introducing and then maintaining the brand loyalty in its customers. Thousands of blogs and review websites have users of Apple products vouching for their quality, their cost effectiveness and brand promise fulfillment; word-of-mouth marketing at its peak. This was the reason iPad was welcomed with open arms by customers and non-customers all over the world. Even if the iPad is not able to deliver up to the extent of its predecessor, customers still will forgive Apple and continue to ask for their products as they keep coming (Laura, 2010). Statistics reveal that customers who are loyal to your organization are bound to spend 33% more than other customers. Referrals amongst the loyal repeating customers are 107% more than the people who are not your customers. These two minute details tell us wonders about the importance of customer loyalty and its critical nature to an organization’s success and effectiveness. Some of the factors that can create a pull towards the product and generate loyalty are excellent support services, customer services, technology, product design, delivery and price of the product (Adriana, 2010). Apple is the jack of all; the product design in unbeatable, the technology is smooth and patented, the customer service is good and the price reasonable. Management Functions: The management functions of HR, marketing, finance, operations etc., pose different kind of problems when operating in an international environment, compared to when a company is working domestically. The biggest issues are making the organizational culture appreciate diversity and use it to the benefit of the organization. Today, businesses are globalized to such an extent that the product, whose parts are manufactured in China, is assembled in US and marketed all over the world. Therefore, the key management functions need to adapt themselves to the international environment (Peter, 1999). When it comes to marketing, Apple has been known the guru of marketing its products. The success of iPhone in a saturated phone market speaks wonders about the marketing strategies that Apple is implementing in its organization. Since the market was already saturated, they had to come up with an exceptional quality that their product would have, that would make the customer buy it over other competitors. The biggest reason for its success was the sleek style and its capabilities that no other phone is providing today. You can customize your product in any way possible, adding and deleting applications at will. This is the power of the iPhone. iPhone is effectively about five years ahead of its competitors, no one has come even close to the iPhone experience even today. To keep their competitive advantage and keep the revenues flowing, they have restricted the application download. Their strategy of using the online Apple store as the only place to download applications has won them millions in the after sales services and products. Another example is that of the iPod. When the iPod was launched in 2001, it was considered as absolute flop; sales were so low that they weren’t even covering the product research and developmental costs. One of the biggest reasons stated for this is the fact that the product was ahead of its time. However, the sales growth increases in 2004, owing to improving marketing communication strategy and also increasing the compatibility of the iPod to other Operating systems and not just the Mac (Steve, 2010). The marketing advertisements are based on the fact that people sell and not the products. Therefore, the great interface of iPod is not shown; however, dancing energetic people with a white iPod are shown in the advertisements. Marketing is all about the complete package, therefore, Apple makes sure that the whole experience of using the product is so good that the customers keeps on wanting more. By focusing on the feel, the look, the packaging; all depicts style. Style is the language of Apple; evident in all its products (Steve, 2010). The human resource of an organization is the most important asset that is owns in today’s dynamic market environment. All other factors of productions can be replicated and bought at a cheaper price. The human resource is the extra something that provides the organization with ideas, innovations that can make or break the organization (Ernest, 1969). Apple Inc. is a US based consumer electronics company, which is known for its path-breaking innovative products. These products are only developed due to the nurturing environment that Apple provides to its innovators. The corporate culture at Apple is demanding, yet fun. Special attention is paid to meeting deadlines, although the environment is casual and relaxed. At Apple, the human resources are treated like its most important asset (Tom, 2007). Some experts argue related to the issue of a strict secrecy policy that Apple follows in the organization. In order to save the millions of dollars that they may lose in case of a leak regarding their strategic product to the competitor, the organization uses various tactics to keep the employees from talking and even sack them if a traitor is caught. This zero-tolerance policy towards the products is brutal for many; however, it enables Apple to make sure that there are no losses when it comes to information leaks. The policy of truth is the one that should be present in all organizations; this provides the organization with the competitive edge. Also, there are no reasons or explanations regarding leaking the information that could get your competitor to make money from your effort. The point is that there are mistakes being made all the time; however some mistakes have grave consequences for the organization. If it is such a mistake, as in the case with Apple, the consequences should be grave to. It is the job of the employees to safeguard and follow the company laws and regulations. Therefore, this stringent policy may be questioned by many, but works for Apple and should continue. The contribution of human resource is also measured at Apple. In the organization, a report is circulated to all senior managers, gauging the effectiveness of the HR function. In the world of HR, it is all about the productivity improvement, the effort of the human resource department should be measurable and it should add 10 to 15% value to an organization (John, 1997). Risk Management: When it comes to apple, the biggest risk that the company faces is the information leak regarding its path-breaking products to its competitors. This may result is lost sales and help the competitors develop the product way before the original time. Secrecy is an important element of the corporate culture of Apple, and rightly so. Their strategy to keep their mouth closed regarding new products developments, strategies and tactics is what keeps their competitors taken off-guard. An example would be that no other competitors have been able to develop and market a product that could challenge the marvels of iPhone. To ensure proper risk management, the organization keeps its secrets, strategies or any other information, which is in black and white, in safes and security locked rooms, the passwords of which keep on changing every few hours. A task force works 24/7 towards the implementation of no-speak policy being exercised by all employees; if this task force is able to find an offender of the law and regulation and is found, the person is sacked. This stringent risk management policy has been effective up till now, as the secrets of the business are kept until the last moment (Barry, 2007). The role of leadership: Leadership plays an important part in the success of every organization (Donald, 2006). The CEO and the secret behind the success of Apple, is Steve Jobs. No one can doubt his contribution towards the position Apple is today. He is a charismatic leader and under his supervision, the company has been able to produce phenomenal products. He has always spoken about focusing on the right idea at the right time. According to him, it is about saying no to the other hundred ideas that would be there and choosing the one that would sweep the world. According to him it is very important for a leader to have the eye or the ear to see or hear that one great idea. This is when Steve Jobs took the idea up of the famous iPod from a common man, who had previously gone to Microsoft and gotten rejection. The iPod didn’t even make enough money to cover basic research and development costs for the first three years, however, Steve saw something in it which other didn’t and sales picked up after the third year. Focus is critically important for effective leadership; to be able to focus on the key issues of the organization, it is important that you keep many others out of focus (George, 2008). Passion is another important ingredient that Steve Jobs has in excess for the products his organization produces. People who are full of passion always find a way to get things done and to make things happen, forgetting the challenges that come their way (Bernard, 2006). Conclusion: Apple and Steve Jobs have been the names of the new millennium, the way they have revolutionized music, connecting, lifestyles, is phenomenal. Objects which were just a mere imagination and seen in movies are now used by the common man due to the innovative thinking and mind set of Steve Jobs and the creative/technical team of Apple. iPhones and iPods are being used all over the world, with iPod leading the world of music. There are a number of reasons behind it. Apple has been successful in building a strong loyalty from its customers as well as its employees. The extent of this loyalty with the brand can be gauged from the fact that, almost 2.5 million pre-orders of the iPad were booked, showing the Apply product users religiously believe in the quality of the product and the services it will provide them. This shows that loyalty from the customers is critical for the overall effectiveness of an organization; on the other hand, the organization should deliver on its promise every time, through its products, so that this loyalty continues. The corporate culture of Apple is strict in terms of deadlines and secrecy; however, these two are the reasons for the ultimate success of the organization in the long run. Innovation, the capability of listening to a new idea and nurturing it is the prime aspects of the organizational success. The idea of iPod was originally rejected by Microsoft by an independent person and Apple was the one who made it a reality; a reality that has become a part of our lives. The charismatic Steve Jobs is another reason for the success of this organization; the leader of the ship is the driver of success through innovation (Peter, 2009). Works Cited 1. Northouse, P., Northouse, P. Leadership: Theory and Practice. SAGE Publication 2. Bass, B., Riggio, R. 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