Apple Inc. Company is an American based computer company with its headquarters at Santa Clara Valley, California; it has revolutionised personal computer industry, through its innovations of consumer-focused products.
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The success of the company is attributed to strategic decisions made by its management regarding developments, inventions, and innovations. However, the company has a major problem in that it C.E.O., Steve Jobs, is facing health problems and has resigned from duty. Jobs management style has turned around the company from a loss making company in the 1990s to a world leading electronic company.
A letter to Apple management and employees written by Steve Jobs on January 17, 2011, explained that the manager was under medical leave of absence; in his speech the same day, he explained that he wanted to focus on his health, thus he wanted to be relived official duties (Apple Inc, 2010). This paper addresses leadership problems facing the company as well as how it can solve the problem in the present and the future.
Diagnosis of the problem
Leader-managers are the think tanks of a company; the success of a business is dependent on the quality, timeliness and effectiveness of their management team decisions.
A chief executive officer creates the atmosphere for proper decision-making and pioneers the decisions made. He may not be the sole architect of the structure and policies to be implement but his input plays a major role shaping the direction of the firm.
Apple Inc has developed from a loss making to one of the best performing electronic companies in the world; the success can be attributed to a management team that is working together to develop an orchestrate company respected for its innovations. The situation as it is now is that the leader of the successful team is not to his best of health; the way forward is the problem of the company. The following are the questions that are lingering in the board of director’s minds:
- Who will be meet the standards set by Steve Jobs in his leadership
- Are the policies implemented by Jobs the best the company can have or the company should look for manager with a different approach?
- How long will the new manager take to adjust and perform in the organisation, will the transition period injure the company?
- Which is the best method of approach to get an international manager who can meet the demands of local and international electronic markets?
- How will the company adjust to changes expected to happen in the company?
- How much will be the manager cost (the salary that was given to Steve was only $1)
The problems must be addressed as soon as possible since a delay in operation in the fast changing computer world may mean that the company will lag behind its competitors. As much as there may be a manager mentored by Steve to undertake his role, it does not guarantee the company results so appropriate measures should be taken despite having such an individual.
History of the company
Apple Inc was incorporated on April 1 of 1979 (Apple Inc, 2010). After its registration, it started making single board monitor and keyboard-free personal computer, which were valued at $580. The response of the new product was massive that the company had to reinvent the same product and came up with a mouse, keyboard, and coloured monitor computer that were named as Apple 2.
In 1984, the company invented Macintosh model; they were silicon technology computers targeting learners and business customers. Since then, the company has been successful in the electronic industry (Apple Inc, 2010).
Born in February 24 1955; Steve Jobs with Steve Wozniak, Mike Markkula and other co-founded Apple Inc in 1970 however, power struggles in the company forced him out of the company management in 1984, he later formed a company called NEXT , which specialised with software’s.
He was married on March 1991 to Laurene Powell; they have three children. The aggressive manager was diagnosed with cancerous tumour in his pancreas in mid-2004. He made it clear to his juniors about his health problems; since then the manager has been fighting with the disease however in late 2010, the manager health problems accelerated that he is contemplating leaving his duties in the company. April 2009, Job underwent a liver transplant which greatly affected his efficiency and decisiveness was greatly affected (Apple Inc, 2010).
Past performance of Apple company without Steve Jobs
After the departure of Steve from the company, a door of problems opened; they faced lacklustre of problems between 1989 and 1997, where demand of its products reduced drastically. The main cause of the poor performance was poor strategic decisions made by the company’s then management.
The management decisions were not effective enough to remain competitive in the fast changing computer world; specifically, the company was facing competition from Intel and IBM whose technology was advanced; it could make cheap computers.
The company had no visionary strategy whereas other companies in the same industry were aggressively positioning themselves. It was operating so badly that three chief execute officers were not able to turn it around. In 1993, John Sculley, the then C.E.O. made alliances with IBM, Intel, and Novel; however the decision resulted to a further reduction of the company’s profit by a further 16%.
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Since the company’s incorporation to 1990’s, the company had embarked on strategic alliances. This had left the company worse off in many alliances until the decision was challenged by the comeback of Steve Jobs (DE WIT and MEYER, 2010).
Return of Steve Jobs in Apple Inc
After recording negative profits, the board of management decided to look for a C.E.O to change turn around things. It was clear that there was a deficit in proper leadership. Steve Job was seen as the manager to be called on board to change the company’s deteriorating state. After the manager return, Apple was compelled to acquire NeXT Software Company, which provided the company with software compatible with Window 95, named Copland.
The move to have Steve on board again is seen as the start-point of the company’s comeback. Steve Job became the company’s acting C.E.O. in 1997; and full C.E.O. in 2000; he is credited to have used his knowledge, experience and creativity to turn the company’s performance around. He took the company when its share price was as low as $3.30, and had a net loss of $580million.
Jobs management strategy made the company came out strong and more focused to customers needs. Other than embarking on internal processes improvement, Steve Jobs looked into all stakeholders; he asked for a salary of $1 Peelen, E., 2006).
Steve journey at Apples Inc
After the 1996 come back of Steve, the first decision that he challenged was previous alliances; he termed the alliance termed as an international growth and cost cutting strategy, with little focus on internal expansion and business growth.
The immediate challenge that faced his management was the invention of Window 95, which Apple PCs could not handle; this made the company’s profits to deepen further by 3% (Wheelen and Hunger, 1998). Steve after the depression in profits embarked on active research and developments to ensure that he will have a successful business outcome in the future (Sadler, 2003).
Apple has been able to develop and maintain strong brand identity; a portion of electronic market has developed confidence and loyalty to the brand. In 2008, the company made a profit of $1.61 Billion, which was beyond the budgeted returns for the year.
In the same year, it paid 98% dividend payout to its shareholders and became the leading company in shareholders returns payout according to Fortune 500, 2009. In 2006 to 2008 consequently, it was voted as the most innovative company; it also doubled as the most admired company in the United States of America.
The recent past good performance of the company can be attributed to the good leadership of Steve Jobs. He is seen as the architect of the company who is able to combine available human and physical resources for the benefit of the company. Internationally, the company has been respected for its innovativeness and its name in the world domain has increased; in 2008, the company was voted the 24th most favoured company; this was an improvement from 33rd position as reported in 2007.
I the success of a company has a direct connection with the decisions that management make; the philosophy applies to Apple where the management are given credit of its success. Many are the times that companies have collapsed because of bad leadership; leadership spans far from the person involved to include other parties like how he manages his teams and delegates power. Steve is seen to have mastered the game plan at apple and thus there is need to have a manager who can meet his standards (Peelen, 2006).
The way forward
The company has lost reliable charismatic leaders who have seen the company through thick and thin; his health has definitely affected the performance of the company, there is need to have another manager who can fit or surpass the performance of the Steve Job. Other than following the normal recruitment process, there are some vital characters that the company should be interested in the new manager; they include:
The computer world is undergoing an increased innovation with new products being introduced in the market. Apple Inc is well known of its innovativeness; for three consecutive years, 2006-2008, Fortune 500 has voted the company as the world’s most innovative company.
Computers, Software, consumer electronics like I-pod and I-phones, MP3 player, and mobile phone, which are the company’s products are being produced by other international bodies and thus for the company’s products to stand out in the market, then innovativeness should be adopted.
The new manager should aim at deriving the company to new heights through his innovations and inventions. A past record of successful innovations in previous company should be looked into. As it is the company’s culture, the new manager should adopt a customer-based approach so that the company products can satisfy the needs of customers and remain competitive.
Other than focusing on the products to sell, the manager should have a strong drive for good marketing and advertising strategies. Apple Inc does not rely on one market base; it keeps developing other markets through its changing products.
Every company requires strategies to face its competitions, Jobs success made timely strategies and effective strategies to focus the company. In modern computer world, strategic alliance may not be avoided, however before the company settles for an alliance, the company to venture with should be well vetted.
Although a manager does not have to make all decisions in the company, but the role that the new manager should play is to ensure that the employees are given an enabling environment to give their idea on what they think can be undertaken in the company for its success (Fred, 2008).
The manager to be taken on boards has an international mind and development strategy; the electronic industry is on an international level where the manager should understand factors affecting other nations in regards to the industry. This is in marketing, advertising and pricing strategies.
- Should appreciate role played by research and development teams
Information technology changing fast: Apple needs to undertake massive research and developments of its products. The success of the company can be attributed to research and development programs. Electronic industry is change-oriented; thus the new CE.O. Should offer support to the department.
When Steve came back to Apple, he took his time to understand the trend of the industry so as he could make strategic decisions. Research and development department advises a company on products and process changes. It ensures the company understands the society and external environment so as it can make timely and relevant decision. Hardware’s’ are composed of high tech software that makes them unique and has increase the utility customers derive from them.
In 2005, the research and development department played a major role in strategically placing the company to enjoy from change in business trend of IBM. IBM, which was a leader in computer hardware production, sold its PC Company to a Chinese company called Lenovo; the company aimed at concentrating on software and operating system. After the decision was made, Apple was faced with the challenge of devising ways to position itself in the market with specialisation.
With the change of line of business by IBM, the company PC competition was on high competition where specialisation took centre stage. Some companies like Lenovo concentrated on hard wares while IBM and Microsoft concentrated on software, to over come this, Apple embarked on massive investments in research and development that has seen it to current situation. It is with the same spirit that the company have embarked on I-pods and I-phones production (Oster, 1994).
To get the new manager, the company should follow the following steps:
The company should advertise the post in international and national labour markets; this will offer the company a chance to get applicants with difference experiences. It may do this individually or contract a reputable recruiting company to undertake the exercise. In the advert, there should be a full analysis of what it is expected of the new manager in terms of education, work experience and the performance in the company.
Employing a person with a proven record of accomplishment is crucial for the organisation as they will have a rather guarantee that he can perform as expected. It may become important to have some of the employees who were working with Steve Jobs to take up the role left; as much as this is an option, it should be undertaken with a great deal of caution to have a fully qualified person undertake the tasks (Haberbeg and Rieple, 2001)
Orientation and introduction to organisational culture
In case the person so recruited is not an employee of the company, the company has the role of orienting the C.E.O. in the company. This stage is important since in case delayed and take a long time, and then the company may be left dragging behind in the changing computer technology world.
Apple has a strong organisational culture which is seen in the way it has innovated different products; the manager must be introduced to the policies and mechanisms that have been put I place to ensure that the manager appreciates the organisational culture and probably make it better (Oster, 1994).
It is difficult for a manager to venture into business that had a well performing manager and start to increase the profits and operations, he needs to take his time and know the teams, which were previously part of the large success, so as he can put his strategies right. Therefore, the company should give an allowance of sometime to adjust for the manager.
Future remedy processes
Apple seems to be at a dead rock since the role played by Steve Jobs seems to be un-interchangeable; an approach that the company should aim at changing. As much as the company has a strong knowledge management policy, there are deficits in delegations and managers preparations.
In the teams working with Steve, there lacks a person who have been mentored and prepared to take leadership in case of an in-eventuality.
This approach is not health for an international company; it should be changed. Preparing of managers to take future leadership positions is a policy of human resources and deliberate measure by those people in power and the lead people. In the world, there are in eventualities that people have little control over thus a company with a bright future should incorporate such cases in their plans.
Apple is an international electronic company with a strong brand name in national and international arena. The problem currently facing the company is looking for a chief executive officer who meets and probably surpasses the standards set by former C.E.O., Steve Jobs.
Steve is suffering from cancerous tumour in his pancreas; he has resigned from day-to-day operations in the company. Apple Inc being an international company requires a manager who can come-up with strategies to become and remain competitive in the fast changing technology world.
A manager of such a class can be recruited after appropriate vetting of his/her past performances and putting on mechanisms to facilitate recognition of his potential. Other than considering academic qualification, the company should be concerned on personality traits of the manager.
Apple Inc. (2010). Apple Computers Inc. Retrieved from https://www.apple.com/
DE WIT, B., & MEYER, R. (2010). Strategy Process, Content, Context: An International Perspective. South Western: Cengage Learning.
Fred, D.(2008). Strategic Management: Concepts and Cases. New Jersey: Pearson Education.
Haberbeg, A., & Rieple, A.(2001).The Strategic Management of Organisations. Prentice Hall: London.
Oster, M. (1994). Modern Competitive Analysis. New York: Oxford University.
Peelen, E.(2006).Customer Relationship Management. Amsterdam: Pearson Education.
Sadler, P. (2003). Strategic Management. Binghamton: New Down Press.
Wheelen, L., & Hunger, J.(1998). Strategic Management and Business Policy: Entering 21st Century Global Society. Massachusetts: Addison Wesley.