Apple Company's Management and Organizational Behavior | Free Essay Example

Apple Company’s Management and Organizational Behavior

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Topic: Business & Economics
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Introduction

Company Analysis

Apple is a company with worldwide popularity (Apple Inc., 2018). It “engages in the design, manufacture, and marketing of mobile communication, media devices, personal computers, and portable digital music players” (The just 100, 2017, para. 1). As of 2017, the company ranked #34 in The just 100: America’s best corporate citizens Forbes rating (2017).

Founded in 1976, it has been increasing its revenue every year. Starting from 8.2 billion U.S. dollars of total net sales in 2004, Apple finished 2015 fiscal year with global revenue of 233.72 billion dollars. About two thirds of the company’s total global revenue during this year belonged to sales of IPhone, a device that gained global popularity and is still expanding (Global revenue of Apple, 2018; Wilhelm, 2014).

Net income of Apple Inc. in the recent years was 53.39, 45.69, and 48.35 in years 2015, 2016, and 2017 correspondently (Apple’s net income, 2017). The company’s revenue and earnings per share vary during the quarters of the financial year. For example, in 2017, earnings per share were 1.666 in July and 3.358 in December (Apple Inc., 2017). According to the statistical data regarding the 25 most valuable brands in 2017, Apple is the second leading brand in the world with a brand value of about 107.14 billion U.S. dollars (Brand value, 2017). An average of 31 Macs is sold per minute globally in almost 500 Apple stores all over the world (Smith, 2017).

Company Report

Company Culture

Company culture frequently determines the company performance as it influences such individual mechanisms as job satisfaction, stress, motivation, peculiarities of learning and decision making (Colquitt et al., 2015). Schein (2010) divides organizational culture into three levels such as artifacts, espoused beliefs and values, and basic underlying assumptions.

When analyzing organizational culture, it should be kept in mind that culture and leadership are considered “to be the two sides of the same coin” (Reisyan, 2016, p. 33). At Apple, these two aspects are also interconnected because company leaders have much faith in the organizational culture and its role. Apple’s CEO states that company’s culture starts with hiring since it is necessary to select an individual who suits the company and maintains its culture (Brand value, 2017). The organization of work within groups and teams or application of conflict and negotiation policies greatly depend on the company’s organizational culture.

Work Groups and Teams

Work groups and teams are integral components of a big company. They are expected to be more dynamic and effective than individual employees (Wagner and Hollenback, 2015). Groups in a company can be formal or informal (Luthans et al., 2015). Still, they both constitute a significant component of organizational behavior. One of the leading world companies that demonstrates examples of excellent team work is Procter & Gamble. Its cross-functional research teams brought P&G products to a qualitatively new level (Wagner and Hollenback, 2015). Apple wants its products to appeal to a big group of people and believe that it can be achieved in case these products are created by a diverse team (Inclusion and diversity, 2018). One of the new trends at Apple at present is the collaboration of hardware and software teams (Yarow, 2013).

The major features of organizational culture accepted at Apple related to the culture of organization include top-notch excellence, creativity, innovation, secrecy, and moderate combativeness (Meyer, 2017b). Dudovsky (2017a) speaks about creativity and innovativeness and a high level of secrecy of Apple. He mentions that ability to work under pressure is important for Apple employees due to strict attitude to project deadlines and necessity to work extra hours for teams and groups involved in different projects. These features are also reflected in the company’s values. Hattersley (2016) also mentions the phenomenon of Apple’s secrecy that must be difficult to preserve with more than 120,000 employees. Still, high level of secrecy as a component of corporate culture is typical of work groups and teams employed by Apple.

Conflict and Negotiation

The place of conflict and negotiation is reviewed in the majority of works on organizational behavior (Scandura, 2018; Champoux, 2016; Philips and Gully, 2013). Philips and Gully (2013) define conflict as a disagreement “through which two or more parties perceive a threat to their interests, needs, or concerns (p. 359). Still, constructive conflict can bring desired results. Negotiation is a process in which “two or more parties make offers, counteroffers, and concessions in order to reach an agreement (Philips and Gully, 2013, p. 372). Both of these concepts are critical for a company.

Apple Inc. has been involved in several negotiations and conflicts that became topics for case studies in business. For example, Staff (2017) describes the conflict between Apple and Samsung in which “Apple argued that it had lost significant profits in the smartphone market to its most significant competitor, Samsung, due to blatantly copied features” (para. 3). This case provides an example of negotiations that help to resolve business disputes. Another case that should be mentioned is Apple’s apology for warranty policies in China (Shonk, 2017). It is an excellent example of overcoming cultural barriers in business and communication. It can be concluded that the ability to acknowledge mistakes and be flexible is a component of Apple’s corporate culture which is closely related to conflict and negotiation policies of the company.

Applying Schein’s model of organizational culture to Apple that includes three inter-related levels of culture, the following parallels can be drawn. Anonymous employee speaks of the Apple campus with an amazing cafeteria and nice territory (Edwards, 2013). These aspects can be treated as related to artifacts. For values level, the value of employees can be mentioned. Former employees assure that Apple is a company that really cares of its workers (Love, 2013). Moreover, the values level is related to the aspects of work groups and teams that were mentioned above. Since employees make the greatest value for the company, the best possible work conditions and resources for groups and teams are integral to the company’s organizational culture. As for assumptions level, it comprises company culture as a phenomenon that is taken for granted by new employees. They come to work for a famous company and they pass a training to know what to expect and what the company expects from them. In the process of work, they become components of a complicated and perfectly working mechanism. This aspect of company culture is closely connected with conflict and negotiation styles accepted by the company and taken for granted by the new employees.

Structure of the Organization

When Steve Jobs was in charge of Apple, he controlled the whole organization. After Tim Cook took the position of CEO, the company’s structure started changing to a more collaborative one (Yarow, 2013). Generally speaking, organizational structure of Apple a traditional hierarchy involving some constituents of other structures (Meyer, 2017a). Dudovsky (2017b) describes Apple organizational structure as consisting of CEO, seven senior vice presidents, 7 vice presidents, chief design officer, and chief operating officer, each responsible for a limited set of duties.

History

Apple is a company that demonstrates sustainable development and high performance. Still, as a big player in the market, it will be influenced by economic, political, and social events. One of the recent phenomena that can have a significant impact on the history of the company is Brexit. Many companies tend to reassess their investments in Britain (How ‘Brexit’ could change business in Britain, 2017). At the beginning of 2017, Apple reacted to Brexit vote by increasing prices for UK App Store by 25% to address depreciation of the British pound (Hern, 2017). Already in 2016, Apple predicted a decrease of sales in Britain due to the fall of the pound that followed Brexit vote (Dilger, 2016). Still, there remained a perspective of building new discount retail stores and offices in the UK.

Change

One of the change aspects at Apple deals with teams that work for the company. As a part of inclusion and diversity value, Apple reports that they constantly increase representation of women in their teams because they believe that diverse teams empower innovation. Thus, as of 2017, there were 36% female employees under 30 at Apple compared to 31% in 2014 (Inclusion and diversity, 2018). About one third of leaders at Apple are women as well. Leading innovation and change in the sphere of security, Apple provides its customers with diverse safety measures such as passcodes, Touch ID or Face ID.

Another aspect that is constantly changing to better is privacy and security. The company supports privacy as a fundamental human right and empowers change to keep personal data of customers safe (Privacy, 2018). One more change happening at Apple is that in organizational culture. Steve Jobs was known for his combative approach to leadership, and current CEO Tim Cook prefers a less combative style that is more social (Shaughnessy, 2013; Meyer, 2017a). Also, Heracleos (2013) speaks of quantum strategy of Apple that is likely to improve the company’s performance.

Mass Technology

To bring technology to broad masses, Apple follows the value of accessibility (Accessibility, 2018). The company states they “don’t design products for some people or even most people,” but develop products “for every single person” (Accessibility, 2018, para. 2). Another significant aspect is that Apple pays attention to making their technology work for everyone, including people with disabilities.

Hierarchy Theories Applicable to Apple

One of the hierarchy theories that can be applied to Apple today is the Theory of Needs by Maslow (Meyer, 2015). In fact, the theory determines the direction of the company’s development. As a brand, Apple has been interested in self-actualization processes that are the higher level of Maslow’s pyramid. The exclusive character of its products, commercials that inspire customers “think different,” and other marketing strategies of Apple contribute to self-actualization of a person who purchases its goods.

Process Technology

Apple does not produce all the necessary parts for assembly of its products. Suppliers make up an important component of the company functioning (Apple Inc., 2014). One of the company values is supplier responsibility (Supplier responsibility, 2018). The company is concerned about protection of rights of all supply chain members and makes efforts to form close long-lasting partnerships for sustainable progress.

Push or Pull

Apple applies both push and pull strategies for its products. Pushing products means their placement within the stores they are in. A typical strategy of Apple is to choose premium locations for their products. It is aimed at attracting the attention of customers and proves to be efficient. Together with this, pull strategy represented by advertising is used. Advertisement has been used since Apple was created and it still works. A specific feature of the company’s commercials is the focus on product and absence of comparisons with competitors.

Environment of the Company

The company environment is a significant aspect of its development and place in the market. Marmol (2015) suggests PESTLE analysis for better understanding and planning for the business environment. PESTEL model comprises six categories of macroeconomic variables such as political, economic, socio-cultural, technological, legal, and environmental.

Political analysis of Apple reveals the following details about the company environment. The company used to be traditionally politically neutral because Steve Jobs was famous for being not involved in politics and his beliefs influenced the policy of the company. At present Apple is more waded into the politics, not always voluntarily (Stewart, 2016). For example, the company name appeared in Trump’s election debates. At that time a Republican nominee, Trump claimed that Apple demonstrates an example of poor corporate behavior due to its production of goods outside the US. Still, the company is not directly involved in politics not having even a political action committee (Stewart, 2016). Furthermore, the company avoids any donations to individual political candidates or parties as many of their competitors do. Still, current Apple CEO Tim Cook believes that it is important for companies to be involved in politics (Kessler, 2017). Hussey (2016) states that “Apple has become a political juggernaut that is actively steering discourse in the United States” due to its politically charged CEO (para. 4).

As for the legal aspect, the company is experiencing certain domestic stress (Khan et al., 2015). During 2014, the company managed to restore imports of some parts necessary for iPhone production which were previously banned by legal acts of the American government. Labor laws that are rather tough in the United States, create more challenges for the survival of the company in the conditions of highly competitive environment (Dutton, 2014; Edwards, 2014).

Economic environment of the company depends on the global economic situation. During 2013, Apple company, similarly to other companies around the world, had to recover from global recession (Khan et al., 2015). Also, stringing dollars make a problem for the company because they influence Apple product prices internationally (Nair, 2014).

Social analysis of Apple Inc. proves that the company pays much attention to satisfy the expectations of its customers. It stimulates company to make constant changes to improve its products, make them unique and desired by customers in conditions of substantial competition. Socio-cultural dimension of Apple environment is connected with its inclusion and diversity value (Inclusion and diversity, 2018). The company employs people disregarding gender, age or nationality achieving the necessary diversity. Attention of Apple to the issue of human rights should be also mentioned here (Backer, 2013). Social aspect is also linked to technology. Technological aspect of Apple is closely related to information technology. In this sphere, innovative companies tend to profit more than the competitors that neglect constant innovation. Apple is considered to be a company that sets trend in consumer electronics business (Khan et al., 2015). Moreover, it is frequently treated as having an aggressive philosophy on innovation. Apart from positive aspects of innovation, there are some risk factors that Apple can face. For example, despite the unique designs that Apple provides, consumers can give preference to products of competitors that have bigger screens (Apple Inc., 2013).

Environmental aspect is also significant for the company. It may not have a direct economic impact, but is substantially contributes to company’s image and reputation which, in their turn, influence the attitude of customers. Environment is another value of the company. The motto of Apple is “To ask less of the planet, we ask more of ourselves” (Environment, 2018, para. 2). The company provides annual Environmental responsibility report (2017) that traditionally focuses on aspects of renewable energy, recycling, and climate change issues.

Conclusion

On the whole, the report reveals the significance of diverse components of organizational behavior and their practical implementation on the example of Apple Inc. Apple Inc. as a leading hardware company with significant experience in business, has passed diverse development stages before it achieved sufficient success and global recognition. It experienced several change periods including change of high management, but customers were not influenced negatively. At any time, they were receiving excellent customer service that resulted in millions of loyal customers all over the world and provides high rates of customer satisfaction. Apple applies contemporary business strategies to provide its sustainable development and preserve its position in the market. The company focuses on innovation, human resource management, and environment sustainability thus not only providing perfect service and products of high quality, but creating a positive image.

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