CHANGE MANAGEMENT IN APPLE, INC. PRESENTED BY MEMBERS OF GROUP 4
GROUP MEMBERS: Ashraf Qatarneh 21058751 Kanokwan Saengthongpinij Saengthongpinij 20265788 Monica Izarra 21030880 Said Rahim 21049852 Pavan Kumar Gunturi 21062317 Sanjoy Karmakar 21059447 Ijeoma Njoku 21050315
APPLE, INC.
1. INTRODUCTION Why the need for change? •
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The need for strategic change arises from the formulation and implementation of the strategy that underpins the direction and activity of an organisation (Senior, 2002). Alterations to the strategic direction and activity of an organisation may therefore necessitate changes to its structure, systems, culture, managerial approach and technology (Lynch, 2005)
2. AIMS AND OBJECTIVES •
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Understand how strategies were planned, implemented, performed and restructured to comply to organisational objectives. Focus on organisational changes that have occurred in APPLE INC. in the last 5 years in terms of: - Structure - Technology - Strategic approach - Leadership - Culture
3. CORPORATE BACKGROUND •
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Apple is engaged in the design, development and marketing of personal computers (PC) and related software, peripherals, network solutions, portable digital music players, and related accessories. The company’s portfolio of offerings comprises Mac computing systems, iPods, iPhones, and servers. The company’s software applications include Mac OS, iLife, iWork, and internet applications like Safari and QuickTime, among others. The company mainly operates in the US. It is head quartered in Cupertino, California and employs 32,000 employees (www.apple.com).
APPLE’s MISSION STATEMENT: APPLE, INC.
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“Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings”.
TOOLS FOR ANALYSIS ON APPLE, INC. Political Factors: •
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Apple has outsourced its components, product manufacturing, transportation and logistics management to many third-party manufactures to lower operating costs. Many of these third-party manufactures are located outside the U.S.A. For example, the final assembly of the company's products is being performed in countries such as Cork, Ireland, Korea, China and Czech Republic. The manufacturing or logistics in these countries might be interrupted by political events. Once it is delayed by such political events, Apple may not be able to deliver its products to its customers on time. Such events will damage the credit image of the company to both consumers and retailers (Buxton, 2007).
Economic Factors: •
The rise of oil and food prices has led inflation to the world economy while the consumers' income has not been much reduced. Since consumers are also facing a greater risk of being unemployed, it will push them to spend less in consuming luxuries goods, like update their current computer or to buy a new iPhone. This will have a quite big influence on Apple's retail business (Ranchhod & Gurau, 2007).
Social Factors: •
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A variety of regulations and laws may adversely affect the company's financial condition and operating results by requiring a safe disposal or recycling of Apple's products (Datamonitor report, 2009). Particularly, there are now various countries within Europe and Asia, certain Canadian provinces and certain states within the U.S adopting such regulations against companies like Apple Inc. Certain products of the company actually face health issues because of the design problem (Rogers, 2002). It is reported that the improper use of iPod may lead to hearing loss for users (Rogers, 2002).
APPLE, INC.
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Technology Factors: •
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The market for PC, portable music player, mobile phone and other consumer electronic products are subject to not only huge competition but also fast technological changes. The short product life, frequent introduction of new products and the continual improvement in product performance and design require the company to continually invest in research and development in order to stay on top of the industry (Ramaswamy & Namakumari, 2007). Apple's control over the entire production procedures of personal computer and the continual innovation on iPod and iPhone is a clear advantage over its competitors (www.apple.com).
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On the other hand, the increasing cost on R&D causes Apple to spend its capital reserve compared with its competitors. For example, Dell uses Microsoft's operating system in all of its products while Apple installs its own brand operating system (Pump up the volume, 2008).
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Environmental Factors:
Apple calculates it’s recycling according to a measurement done by Dell, it started off 2005 with 6.1%. It improved during 2006 and 2007 reaching worldwide recycling rate of 41.9% in 2008. Apple’s aim is to have a recycling rate of 50% by 2010.
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Toxic substance removal: During 2006, Apple’s MacBook pro included many materials that were not as environmental as Apple aims. Yet in 2008 all its products including iPod, iPhone and Mac were free from PVC, BFR and Lead.
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Therefore, Apple manufactured “Green Products” with less environmentally harmful substances. To do so, Apple was not waiting for any legislation that ban any of these harmful substances (Lynch, 2005).
Legal Factors: •
In many countries such as South Africa, Greece, Singapore, Slovakia, and Italy; Apple iPhone is sold unlocked because of rules and regulations in the country itself that is against Apple’s laws of providing locked phones through certain carriers and mobile providers.
5. PRODUCTS’ TRANSFORMATIONAL CHANGES: iPOD: Strategy changes in terms of:
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Design evolution
Technological advances APPLE, INC.
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Marketing and advertisement
iPHONE: Strategy changes in terms of:
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Design evolution
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Technological advances
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Marketing and advertisement
APPLE NEW TABLET: New product introduced by APPLE, INC. in 2009. 6. ONGOING CHANGES Transformation Evolution
- Apple always thinks ahead over competitors Scale Type 2: Incremental adjustment
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Expanding sales territory
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Improved production process technology
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Shifting the emphasis among products
7. STRATEGIC APPROACH Miles & Snow (1984)
Mintzberg et al (1998) •
Design
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Planning
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Positioning
8. TRANSFORMATIONAL LEADERSHIP
APPLE, INC.
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Brown & Eisenhart (1995) identified 3 key characteristics of successful managers: •
Provide clear responsibility and priorities with extensive communication and freedom to improvise.
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Enhance learning of future possibilities by experimenting with ideas.
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Link current projects to the future with predictable intervals.
Change management literature emphasizes the importance of the leader in enacting change. In organizations where change occurs frequently, the leadership style that will produce the best results is one that can motivate followers to identify with the leader’s vision of the future and to sacrifice selfinterests for the benefit of the organization as a whole. Known as transformational leadership, the leader may also be charismatic and somebody whom the workforce trusts and whom it emotionally identifies. Transformational leaders engage in a process that includes recognizing the need for change, creating a new vision and then institutionalizing the change. Therefore by creating a vision and properly communicating group goals, effective leaders can change the basic values, beliefs and attitudes of followers, so that they become willing to perform beyond the minimum levels required by the organization. When applied to an organization operating in an industry of continuous change, charisma and the ability to provide intellectual stimulation to the workforce become very important. Whether this approach is successful and accepted throughout the organization will depend upon the abilities of each individual leader. It is believed that organizations will be more receptive to transformational leadership approaches when adaptation as opposed to efficiency is the goal. Change champions
Transformational leaders can successfully change how things are done in an organization by displaying appropriate behaviours at each stage along the way. When there is a realization that old ways of operating are no longer going to work, a good leader will be able to develop a new and appealing vision of the future, and this vision will be able to provide a strategic and motivational focus. Providing a clear statement about the purpose of the organization can inspire workers and lead to greater commitment. Leaders may provide a vision of the future that is attractive and engaging rather than simply disagreeing with what has been done in the past (for example, Steve Jobs’ vision of the Apple Mac PC). Specialists in this area suggest that the leader must be a “change champion” who can assemble and motivate a group in order to “pull” followers towards a new vision. Once the vision is developed, the implementation of change can be done by the setting of challenging goals for employees.
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The leader must work at getting large numbers of people involved in the process of change in order to avoid resistance. The skill becomes the creation of a system or organizational culture that is neither too rigid (over-control) nor too chaotic (lack of strong leadership). There is no doubt that the importance of successfully enacting change is a critical issue facing today’s managers. The Steve Jobs example illustrates how, as time moves on, ideals and approaches that were once frowned upon can become the catalysts that save an organization. In his book The Second Coming of Steve Jobs , Alan Deutschman highlights how many colleagues and co-workers see Jobs as a “role model” and “icon.” One colleague even described Jobs as one of the most charismatic people in the computer industry. These facts go a long way to support the idea that a particular leadership style can be one of the most important factors in successfully motivating followers and turning round the fortunes of an organization. 9. CULTURE:
10. IMPACT CHANGE •
New brand image.
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Quick response to customer demands
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Helps to align existing resources within the organization
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It allows for organisational assessment
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Change can be implemented without negatively effecting the day to day running of business
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Organizational effectiveness and efficiency
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Time management
12. CONCLUSIONS
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Does Apple, Inc. have a succession plan?
11. RECOMMENDATIONS
Apple's history of innovation and its motto of "thinking differently" will be the key advantages for keeping current Apple users and for enticing new consumers. Originality has been a hallmark for Apple from the very beginning, and it is that sense of style that enables Apple to prosper in this ever growing and changing market. Apple's recent successes and expansion have led Apple's CEO Steve Jobs to predict that Apple's market share will double from 5 percent to 95 percent in the near future (www.apple.com).
APPLE, INC.
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