Apple: Organizational Theory

Introduction

Organizational theory can be defined as approaches and methods that are used in company analysis (Hatch, 2018). The concept is important in ensuring the productivity and sustainability of business and their products. Various strategies are often examined by companies. For example, Porter’s matrix has been used to analyze the different aspects that might affect a product or an organization in its entirety.

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The mission, vision, and objectives of the company have also been used to evaluate a company’s ability to realize its goals. It is important to note that anything that affects the behaviors of staff and the productivity of a business can be linked to organizational theory. This essay analyzes some of the organizational theory challenges that Apple Inc faces. Apple is a well-known brand that has had leadership and reputation challenges over the years.

Both these challenges fall under the organizational theory concept. The essay will outline the organizational profile and provide secondary research on the various problems Apple is facing. One challenge will then be picked for further analysis in the academic research section. Finally, an action plan will be developed to try and come up with solutions that Apple can consider resolving the challenge.

Organizational Profile

As stated previously, the organization that has been selected for this assignment is Apple. Apple is one of the largest technology companies in the world. The company has a keen interest in mobile phone manufacturing and technology, computer and software manufacturing, and other personal consumer electronics (Williams, 2015).

Mission

According to Pinder (2014), Apple’s mission statement is “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad”. It is important to note that the company has changed its mission statement several times over the years. One of the main reasons for this is the change in ideology in the company due to both internal and external pressures.

Vision

The company’s vision statement underscores the importance of making the world a better place by developing innovative and life-changing products. The organization is also keen on ensuring the simplicity of its products so that they can be used by all types of consumers. It is critical to point out that the vision statement of the company has changed over the years as well (just like the mission statement).

Two arguments can be made regarding the constant change of both the mission and vision statements. The first argument is that the constant changes ensure the company is always ahead of its competitors and in touch with the ever-changing needs of its consumers. Towards this end, the changes are not only necessary but also justified. However, the second argument would suggest that the changes make the company unpredictable, therefore, regarding the consumer, unreliable. This second argument would, therefore, suggest that the variations are not necessary.

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Strategic Objectives

Pinder (2014) argues that the success of Apple is attributed to its ability to have several specific objectives. To fully understand these objectives, they will be categorized according to the marketing matrix of place, product, price, and promotion.

Place

One of Apple’s objectives regarding the place is to ensure they have stored on a global scale (Williams, 2015). This means that the company looks forward to having stores in every country in the world. The second objective is that consumers can access their favorite Apple products from different platforms such as retail and online.

Product

The product section of the marketing matrix also has two objectives. The first is to produce ground-breaking and innovative products always (Williams, 2015). One can argue that this is one of the reasons the company has been successful. The second strategic objective is that all innovations designed should also further the industry, not just the company.

Price

According to Pinder (2014), Apple’s objective about price is to create premium rates while still ensuring they capture the market. Towards this end, they also seek to increase their profit margins at all times.

Promotion

Lastly, the company also seeks to build hype about their new products (Williams, 2015). This is evident in their advertising and marketing strategies. It is also important to note that the company also tries to sustain and expand its brand (Williams, 2015).

Operating Environment

The chosen company has several external stakeholders. The most significant is the consumer as they buy the company’s product. Other than this, the company also has partners that ensure their products are of high quality. It is no secret that Apple has partnered with several Chinese companies to manufacture their electronic products. This means that a majority, if not all, of the company’s products, are assembled in China. This arrangement has in the recent past put Apple in the spotlight due to the mistreatment of the staff working on their products in China. There were cases of staff committing suicide due to poor working environments.

Organizational Structure and Management

Williams (2015) reveals that Apple has a hierarchical organizational structure. Even though the company uses a traditional approach regarding its organizational structure and management, it has a flexible functional matrix. This has allowed for inter-departmental partnerships which have ensured the success of the company. It is crucial to note that the company still has a top-down approach to management. The rigid nature of the company’s organizational structure has been scrutinized over the last few years. Critics have argued that the company has considerable employee turnover due to the top-down approach used (Williams, 2015). After the demise of Steve Jobs, one of the founders, the management has tried to incorporate a more accommodating culture.

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Transformational Process

Before its current success, Apple had a rigid business model. This had to change in an attempt to get more shares in the market. Indeed, it can be suggested that the change of the business model is the most significant transformational process of Apple. Whereas before the company focused mainly on software and hardware, the new business model proposed the use of personal consumer electronics as the company’s main product (Williams, 2015).

Secondary Research

Poor Leadership

As stated previously, one of the biggest challenges Apple faces is leadership. A bit of background is needed to fully understand why leadership is a challenge in the company. Initially, during its inception, Apple was headed by three founders, Steve Job, Steve Wozniak, and Robert Wayne. However, due to disagreements, Jobs and Wozniak left the company after a successful launch of the Macintosh (Williams, 2015).

One of the reasons why Jobs left was a power struggle between him and the then CEO of the company (Williams, 2015). One can argue that the two had different leadership styles. Whereas Jobs has been identified as one of the best managers in the world, there have been cases of him supporting only rigid reporting structures (Williams, 2015). Due to the changes and poor leadership, Apple was unable to make significant profits several years after the departure of Jobs. He came back when a new CEO joined the team. Williams (2015) argues that the return of Jobs in the company ensured that he had all the power regarding management and production.

The mentioned total power in Jobs allowed him to also dictate the structure and management style of the company. Williams (2015) notes that many employees have reported that nothing would get approved in the company without the knowledge of Jobs. Additionally, there have been cases whereby employees had to sign agreements of never discussing any work-related issues with outsiders, including their families (Williams, 2015). It is important to note that this organizational challenge not only affects the employees’ perception of the management but also the production output.

Lack of Clear Direction regarding Technology

The second challenge that Apple faces is the technology challenge (Pinder, 2014). The second problem affects the core of the business. As mentioned previously, one of the company’s objectives is to always produce innovative merchandise. However, this has become difficult in the last couple of years. Pinder (2014) confirms that the latest products by Apple have not been innovative as expected.

There are several things that one should consider when discussing technological challenges as an organizational problem. The first is the fact that technology has been changing at a very fast pace. However, in recent years, mobile phone technology has not changed at all. Players in the consumer electronics space have resorted to tweaking their products to offer better quality. However, for Apple, this is a disadvantage as it does not go together with the company’s objectives. Despite the common notion that technology is changing daily, it is only applicable in some industries

Secondly, even though Apple has diversified within the consumer electronics space, it has not invested in other areas of technology. For example, whereas Samsung, one of Apple’s biggest competitors has the same products as Apple, it has also invested in smart TVs, fridges, and washing machines among other products. Towards this end, Samsung does not rely on the growth of technology within one sector to still make a profit. The same cannot be said of Apple who has mainly focused on phones, computers, and iPads only. Pinder (2014) emphasizes the importance of diversifying in areas that are completely different from the company’s core business but still relate in one way or the other.

Lack of Safe Working Environment

Pinder (2014) notes that one of the reasons employees quit their jobs is due to poor working conditions. Apple has been voted among some of the best companies to work for in the world. Pinder (2014) argues that employees are often treated well with flexible working hours, a good rewarding system, and a generally happy working environment. Due to the leadership changes, the organizational culture has often changed in the company but much of the principles used to engage with employees have remained the same.

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Despite this, partners who work with Apple have on many occasions mentioned mistreatment by the organization. Whereas there have been no direct accusations of the company’s management, there have been many cases of employee mistreatment by third parties who are working for and in partnership with Apple.

As mentioned earlier, the third parties that have been linked to Apple are based in China, where the company outsources employees to assemble their products. Whereas Apple does not hire these employees directly, critics believe they are still the responsibility of the company. Therefore, if the employees are mistreated by the company hired by Apple, then one can still argue that Apple is also mistreating them.

The lack of a safe working environment for these staff has led to depression and even death. Pinder (2014) confirms that there have been numerous cases of suicides at workplaces. Because this organizational problem affects both the productivity of the company and its reputation, it has been selected for further discussion in the next sections of the paper.

Academic Research

The chosen organizational theory challenge that will be discussed further is the lack of a safe working environment for associate employees of Apple. One of the reasons why this challenge was chosen is the fact that it affects both productivity and reputation. One can propose that there are two main reasons why Apple uses associate employees to assemble its products. The first is that labor in China is affordable. This means that the company saves on operating costs.

Secondly, and to some extent, having associate employees relieves the pressure of ensuring the same employees are well taken care of regarding their employment. It is this second reason that has made it easier for Apple to ignore some of the complaints of their associate employees working in China. This section of the essay will discuss the causes, effects, and solutions of this organizational problem.

Causes

It can be claimed that there are very many things that can cause a lack of a proper working environment in any organization. In the case of Apple, as mentioned earlier, the lack of a safe working setting is attributed mainly to the use of third-party employees (Chaidaroon, 2014). Because Apple does not have a manufacturing branch in China, it has opted to use several companies that offer affordable rates for the assembly and production of its merchandise. The source quoted (Chaidaroon, 2014), is an academic conference paper that was used due to its detailed overview of the working environments of the associate staff. The source also provides some of the actions that were taken after the suicides by both Apple and their partners.

Whereas these companies do not advise or change the design of the Apple products, they are mandated to ensure that the said products are well assembled and packaged. Chaidaroon (2014) notes that Apple does not have a manufacturing license in China, thus, these employees are by law under their respective companies despite the close association with Apple.

Another cause of the lack of a safe working environment is organizational culture. It is crucial to note that organizational culture goes hand-in-hand with the general culture of the place business is located. Thus, the organizational culture of Apple is mainly affected by the common way of living of people in the US. To enhance their marketing strategy, Apple has used this organizational culture to claim that their products are better than their competitors as they also help their employees and associates live better lives (Tsay, 2013). However, the same culture is not applicable in China where employees live on minimum wage.

Effects

One of the effects of an ineffective working setting is that employees get demotivated. Arguably, the most productive employees are the ones who enjoy both their work and workstations. The associate employees in China, however, do not enjoy their work either do they like where they work. This is evidenced by Chan (2013) who notes that several associate employees in China have committed suicide due to depression.

The chosen source is an academic journal entry that was submitted to the New Technology, Work, and Employment journal. It was selected because the author provides a clear picture of working environments in China, in general as well. Chan (2013) goes further to note that a visit to the assembling plants revealed staff working in dark, damp, and depressing environments. Not only were the employees demotivated but they were also hopeless. The fact that they were paid minimum wage per phone assembled also made the situation worse (Tsay, 2013).

Another effect of the organizational theory challenge selected is a poor reputation. Apple is proud of its reputation. Many of the company’s products are costly and the brand name is associated with class and prestige. On the same note, the company has been at the forefront of advocating for the rights of employees (Lee, Lau & Cheng, 2013). The article is an academic journal entry submitted and published by the Journal of Business Research.

The authors sought to find out the different perspectives of people regarding different brands. Apple was among the brands people stated was high-end and classy. The source was selected as it confirms the company’s objectives of always getting a profit and having premium rates for their products. Employee rights protection and financial performance. In fact, as Tsay (2013) notes, Apple employees are not only well paid but they work in a flexible and friendly space within their offices. Additionally, these employees receive constant recognition and awards for their work. This is the expected image or reputation of the company.

However, the fact that the associate employees are mistreated in China shows that Apple is not concerned about all its employees. The source is an academic journal that was published by the Information and Operations Management Journal. Tsay (2013) offers a clear overview of how Apple ideally treats its employees based in the developed world. This source proves useful as it gives a comparison between the Apple employees and their associate staff in China. Luse, Townsend, and Mennecke (2018) confirm that the company has been accused of bias and discrimination of different types of employees.

This has, in turn, affected the company’s reputation and public image negatively. The academic journal article by Luse et al. (2018) was selected due to their in-depth analysis of preconceived bias. The academic journal was published by the Decision Support Systems journal. This is the type of bias that is shown due to a previously held belief. An understanding of preconceived bias is essential in understanding the status and class that is associated with Apple’s products.

Solutions

It is important to reiterate that the employees in question are not directly hired by Apple. Despite this, the backlash that the company has received due to its involvement with the associate employees has made it essential to come up with solutions to the problem. Whereas Apple cannot and is under no legal mandate to help the employees in China, it has an ethical and moral obligation to ensure it deals with companies that treat their employees well (Lee et al., 2013).

The best solution to the problem is the careful selection of partners to work within China. Indeed, Apple still must cut operating costs to maintain profits. Thus, the organization will still have to seek partners in China. Even though Apple cannot dictate how the employees are treated in general, they have a legal right to demand that all employees working on their products be treated well. Such agreements should be included in the working contracts with the partners. Apple should further allow for inspection visits to the warehouses and manufacturing sites to ensure that the employees are being treated appropriately.

Action Plan

There are several things that Apple should do to ensure that the organizational theory problem identified is resolved once and for all. This section of the paper gives an action plan that the company should take alongside the relevant timelines. A summary table of the action plan will also be provided after the discussion. The first action the company has to take is the evaluation of all its partners in China. This evaluation should include the understanding of how the partners work with their employees, their working culture and environment, and their remuneration packages.

It is critical to point out that even though labor in China is more affordable, Apple still pays Chinese companies a huge sum of money to assemble and package their products. A strict approach on how employees are treated based on the experiences of Apple should be adopted from the non-profit sector. Pinder (2014) explains that the non-profit sector allows for parties to indicate how they treat their employees according to their association with either a donor or a local partner.

It can be stated that the business sector is different from the non-profit one, which is true. However, Apple still has the upper hand and can use the same laws and excuses the third-party companies are using to mistreat employees. Research shows that many of the Chinese workers in the Apple factories are mistreated due to the high level of unemployment in the region. Additionally, many companies need large contracts from multinational companies such as Apple to keep afloat. Apple can use these economic factors to ensure that all employees working on their products are treated well.

Apart from evaluation, the company should also train its partners on employee rights and viable organizational culture. This mandate falls on Apple because they have more to lose if the employees are treated badly. The training can be done every year to ensure that any new employees are also knowledgeable of their rights. One might argue that the mandate should fall on the third-party companies and not Apple.

However, as mentioned, Apple’s reputation will be affected if they do not work towards ensuring that their partners treat their employees well. Scholar A explains that the complexity of the situation is enhanced by the different organizational cultures that the two countries have (the US and China). Whereas the US upholds the rights of the employees highly, China does not. Apple should indeed be careful to ensure they do not overstep in the host country as this could lead to the withdrawal of political goodwill.

Thirdly, the company should incorporate specific needs and agreements into their contracts with third-party companies. There are two things that these contracts can indicate. First, the contracts can state that Apple has no obligation to interfere with the way the partner companies treat their employees. Whereas this agreement will remove any legal liabilities regarding employee rights from Apple, it will still be considered a poor action by the company.

In turn, it could continue to damage the company’s public image. The second agreement that can be made is that any company that is to be considered as a party to assemble and package any Apple product should agree to treat its employees in a certain manner. This policy will ensure that the companies that seek partnership with Apple already understand the requirements needed and should adhere to those stated requirements.

Another aspect of the action plan is the development of a monitoring and evaluation plan for this specific purpose. It is not enough for Apple to inform the partners that they would prefer employees working on Apple products to behave in a certain way. The company also has to ensure that the companies are adhering to the agreement. This can only be done through proper monitoring and evaluation exercises. These evaluations should be done randomly and unexpectedly to get the best results. Some of the strategies the company can use for such evaluations include observation and talking with the staff. The table below offers a summary of the action plan proposed.

Table 1: Action Plan.

Problem Action Responsibility Liaison Duration Units of Measurement
Lack of a safe working environment in third-party associate companies in China Evaluation of all current partners Apple Inc Partner representatives Yearly Their organizational culture
Their employee turnover rates
Employee job remuneration packages
The General outlook of the working stations
Training and capacity building on employee rights Apple Inc Partner representatives Yearly Tests on the training materials
Application of the concepts learned in the workplace
Revision of contract agreements Apple Inc and Partner Representatives Apple Inc and partner representatives Yearly Policies
Adherence by both parties to the guidelines and agreements made

It is crucial to mention that despite all that is expected of Apple Inc in regards to ensuring the proper treatment of employees working on their products, the company can only be given an ethical and moral responsibility and not a legal one. This is because, as mentioned previously, Apple is not a registered company under the Chinese government. It is this very reason that forces Apple to work with third-party companies in the area. The management of the organization has been keen on communicating openly about their disapproval of the mistreatment of employees at any organization. These action plans will show their commitment to ensuring that no employee associated with the Apple brand is mistreated.

Conclusion

In conclusion, Apple is one of the largest technology companies in the world. The company has been keen on innovation and advanced technology to gain access to a specific clientele in the market. Many instances can be described as “transformational” in the history of Apple. However, a key moment in the company was the change of the business model. Initially, the company only focused on computer hardware and software.

However, after a re-analysis of the market, the management was convinced that a more deliberate and defined focus on consumer electronics was necessary to ensure profits. It is interesting to note that whereas many other competitors in the same field have focused on producing affordable merchandise, Apple focuses on premium products that offer innovative technological advances.

Research shows that one of the company’s main organizational theory challenges is the lack of a safe working environment for employees contracted by third-party companies to assemble and package Apple products in China. This has led to high employee turnover and even death by suicide. These challenges have put Apple in the limelight for all the wrong reasons. The company has been accused of bias, racism, and not taking care of all its employees. It is crucial to note that the accusations made against Apple, by their clients, are mainly ethical. This is because Apple does not have the said staff on its payroll.

They are only associated with them through third-party companies. To ensure that Apple’s reputation is not ruined, the management has to come up with a strategy of engaging with these third-party companies in China. It is suggested that the management ensure that all their partners treat their employees well. This should be part of the contractual agreement signed by all parties. It would be prudent for Apple to monitor the treatment of the employees as well.

References

Chaidaroon, S. (2014). Discourse analysis of Apple-Foxxcon case of employees’ suicide in China. Allied Academies International Conference: Proceedings of the Academy for Studies in International Business (ASIB), 14(1), 13–14.

Chan, J. (2013). A suicide survivor: The life of a Chinese worker. New Technology, Work & Employment, 28(2), 84–99.

Hatch, J. M. (2018). Organization theory: Modern, symbolic, and postmodern perspectives (2nd ed.). Oxford, UK: Oxford University Press.

Lee, P. K. C., Lau, A. K. W., & Cheng, T. C. E. (2013). Employee rights protection and financial performance. Journal of Business Research, 66(10), 1861–1869.

Luse, A., Townsend, A. M., & Mennecke, B. E. (2018). The blocking effect of preconceived bias. Decision Support Systems, 108, 25–33.

Pinder, C. C. (2014). Work motivation in organizational behavior (2nd ed.). New York, NY: Psychology Press.

Tsay, A. A. (2013). Chapter 2: Motivating case studies: Boeing’s 787 Dreamliner: toysrus.com and amazon: Factory labor headaches for Apple and Foxconn. Foundations & Trends in Technology, Information & Operations Management, 7(1/2), 18–20.

Williams, C. (2015). MGMT8 (8th ed.). New York, NY: Cengage.

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