CASE STUDY: APPLE GLOBE UNIVERSITY
g. and that culture itself may need to change as the strategy evolves. Research shows that member perceptions of the organization's culture are associated with cognitive and affective sources of motivation and job satisfaction.Overview: As organizations adapt to be more effective in dynamic and competitive environments. Its importance lies in its ability to influence the activities of members and the functioning of the organization without the direct imposition of measures and controls. fans. Depending on how this is done and communicated to the stakeholders (e. rational aspects alone no longer dominate the management literature. the role of their organizational culture in either supporting or resisting internal changes is critical. The concept of culture is used to capture the essence of what must change or adapt within an organization for it to be more competitive in the marketplace. Leaders must be able to see.
. understand. Culture is the set of shared values. and attend to these changes to reduce the likelihood of dysfunctional stakeholder behavior. and customary ways of thinking and doing things which shape and guide the behavior of organizational members.. The organization's leadership must seek a culture that fits with new strategic demands. shared beliefs. Examining an organization's culture has become a target for organizational analysis. It is like one team changing the rules of a game during the game. Helping leaders manage culture change effectively is the focus of this case study. some parties to the game may view the changes as unfair. or even unethical. Changing a culture generally means changing some of the organization's values. beliefs. The emphasis on understanding social and symbolic processes of organizations has increased. the other team). referees. and customary ways of doing things.
For the quarter.As an example of the life cycle shift in culture can be illustrated by describing briefly the development of Apple Computer Company. Apple continued to experience early success in the industry being the first computer company to reach one billion dollars in annual sales in 1982. the Mac operating system. Over the last two decades. development. the iPod digital music player. Gross margin was 26. Ireland. Apple announced financial results for its fiscal quarter ended December 27th. As mentioned before. down from 27. Company's history. is headquartered in Cupertino.7 percent. In Jan 2004. Apple developed as a major player in the computer industry in its early years. International sales accounted for 44 percent of the quarter¶s
. and growth: Apple Computer. business and education markets. Inc.006 billion. Their products include the Macintosh line of desktop and notebook computers. Revenue for the quarter reached a four-year high of $2. the popularity of personal computers has made the computer market attractive to consumers worldwide. Apple posted a net profit of $63 million. The manufacturing facilities are located in Sacramento.6 percent in the year-ago quarter. California is a leader in the PC field for home. Apple Computers has experienced both good and bad times since it began its garage operation in 1976. These results compare to a net loss of $8 million in the year-ago quarter. it has struggled lately with keeping pace in the rapidly developing computer industry. 2003. up 36 percent from the year-ago quarter. Apple grew to a publicly traded company by 1980. the developing technology and evolving computer applications have contributed to this type of business environment. In this extremely competitive industry. Although it has been a leader in computer technology in the past. California and Cork.
000 iPod units. focusing on delivering software to cheap commodity personal computers while Apple was delivering a richly engineered. up 235% from the year-ago quarter. On January 10.
. Apple introduced a new all-in-one computer reminiscent of the Macintosh 128K: the iMac. it appeared that Apple could do no wrong. experience. The lawsuit dragged on for years before being thrown out of court. introducing fresh new products and generating increasing profits in the process. who would later design the iPod and the iPhone. 1998. Steve Jobs announced that Apple would begin producing Intelbased Mac computers in 2006. The success of the PowerBook and other products led to increasing revenue. At the Worldwide Developers Conference keynote address on June 6. Apple shipped 829. Rise and fall: Having learned several painful lessons after introducing the bulky Macintosh Portable in 1989. Apple also introduced Boot Camp to help users install Windows XP or Windows Vista on their Intel Macs alongside Mac OS X. a series of major product flops and missed deadlines destroyed Apple's reputation. but expensive. 2006. The iMac design team was led by Jonathan Ive. v.000 Macintosh units during the quarter. Inc. Apple introduced the PowerBook in 1991. Microsoft Corporation. 2005. Instead they sued Microsoft for using a graphical user interface similar to the Apple Lisa in Apple Computer. Apple relied on high profit margins and never developed a clear response. up 12% from the year-ago quarter. as well as 733. At the same time.revenue. During this quarter. The magazine MacAddict has named the period between 1989 and 1991 as the "first golden age" of the Macintosh. For some time. which established the modern form and ergonomic layout of the laptop computer. On August 15. Microsoft continued to gain market share with Windows. the new MacBook Pro and iMac became the first Apple computers to utilize Intel's Core Duo CPU.
Figure 1: The life cycle of Apple Computer Company
. the price of Apple's stock increased more than tenfold.
The Apple¶s culture can be characterized by profile 1 in the below figure.Apple's success during this period was evident in its stock price. Between early 2003 and 2006.
the freewheeling clan faced a need for controls and standard procedures. the formation of a group of pirates. intimiditating pieces of hardware that merely replaced slide rules for engineers and mathematicians. apple established one of the most successful ventures ever experienced in the industry.
The team¶s endeavors were so successful that the entire organization adopted the team culture and to look like profile 2 in figure1. The enormous success of the company led it toward a third kind of culture. and the company was flexible and freewheeling. dubbed the macintosh team. This small group of apple pirates. designed and developed the macintosh computer. Within a few years of incorporation.As is typical of most adhocracies. and low scores in the hierarchy and market quadrants produce the profile illustrated in profile 1. innovative. a highly cohesive clan. Few people would have considered using one for personal or family applications. With hundreds of thousands of computers being sold.
. The group can be described as renegades and crazies. had apple bumper stickers on their car. Policies and regulations were needed and a hierarchy orientation had to be developed(profile 3 in figure1). however. a single entrepreneurial. Until then computer were large. adhocractic culture. This team of selected employees was charged with developing a computer that people would want to purchase for use in their homes. moderate scores in the clan quadrant. Employees wore apple logos on their clothes. The high degree of emphasis in the adhocracy quadrant. distribution channels expanding worldwide. Apple¶s culture was dominated by an entrepreneurial. and spoke warmly of the apple family. charaismatic leader was setting direction. This culture profile has been produced from the organizational culture assessment instrument.
The shift to a hierarchy culture generally produces a sense of apprehension. It is not that all four types of cultures must to be emphasized equally. that founder Jobs was ousted from the company. It ceased to be the agile. mature organization under Scully. perfectly comfortable in an organization dominated by adhocracy and clan cultures. however. A new set of values and priorities reflected in a new culture made Job¶s orientation out of sync with current demands. He was not an effeciency expert and administrator and not inclined to manage a hierarchy. Scully was a master effeciency and marketing expert. Predictably. this shift created such a crisis in the organization.Appe¶s CEO was the quintessential innovator and team leader. and his skills matched more closely the shifting culture of Apple as its growth produced a new cultural orientation.and adhocracy-like attributes so that they can be more balanced organizations. of replacing family feelings with rules and policies. Rather. of abandoning core values. the culture again shifted into a fourth stage. innovative company that characterized the young group of renegades in its early life but instead was an outstanding example of effeciency and marketing savvy. In many organizations this becomes the norm. John Scully from Pepsico was hired. to manage the shift to stability and control. therefore. profile 4 in figure1. with the clan and adhocracy orientations being supplanted by a hierarchy orientation. it is that the organization must develop the capability to shift emphases when the demands of the competitive environment require it. with the clan and adhocracy cultures being minimized and the hierarchy and the market cultures being emphasized.
As Apple developed into a large. Many management consultants and leadership gurus therefore spend a great deal of energy assisting companies in developing the capability to reinstitute clan.
. The Ginza opening in Tokyo was estimated in the thousands with a line exceeding eight city blocks. At one time. young companies. seems to have negative effects on Apple¶s performance as a company until the development of the innovative iPod. supported the continuing existence of a network of Mac User Groups in most major and many minor centers of population where Mac computers are available.
According to surveys by J. It was the marketing company of the decade.One reason for the performance difficulties of the Apple is the continued emphasis in the company¶s culture on the bottom two quadrants in figure1. Market research indicates that Apple draws its customer base from an unusually artistic. avant-garde subcultures. however. with some waiting in line as much as a day before the opening or flying in from other countries for the event. but this was after the phenomenon was already firmly established. Apple has the highest brand and repurchase loyalty of any computer manufacturer. Apple appears not to have gone out of its way to create it. This pattern of culture change was less standard than that occuring in new. Apple Store openings can draw crowds of thousands.
The company¶s culture changed in response to new environmental and competitive pressures. In an industry faced in the late 1990s with the need to innovate constantly with very rapid cycle times. which may explain the platform¶s visibility within certain youthful. a few Mac fans took the opportunity of the setting to propose marriage. Apple has. D. instead of a shift back up to the adhocracy quadrant. but Apple was a marketing company. creative. Apple evangelist Guy Kawasaki has called the brand fanaticism "something that was stumbled upon". and well-educated population. The New York City Fifth Avenue "Cube" store had a line as long as half a mile. Power. Apple evangelists were actively engaged by the company. People talk about technology. While this brand loyalty is considered unusual for any product.
He added value to the Mac software. Apple Computer. they have become a household name within the computer industry. He was an important character in transforming the cultural change Apple has undergone. decided to pursue a strategy to competitively position their product. Not only has he founded Apple Computers. but he also saved it from the brink of disaster when he returned as CEO in 1997.
Early in the industry¶s life cycle. and a technician. Inc. Steve Jobs has done an amazing job revitalizing Apple Computers. With Job¶s deep understanding of the computer market as a pioneer in two businesses. Because of this early strategy. consists of variables that are within the organization itself.Company's internal strengths and weaknesses: The internal environment of Apple Computer. Apple holds a significant niche in the graphics industry. and simplified the product chart. Apple Computer has become a strong presence in the education markets. Their hardware and software have a strong graphics platform. Inc. Strengths and weaknesses are the variables that form the context in which work is done.
Steve Jobs is considered to be the most important person in Apple¶s history and the company¶s present. he implemented many of the strategies Apple should have done in the beginning. the name is also synonymous with a product interface that is easy to use. They decided to focus on a specific market segment and promoted their product within the educational community.
Strengths: Because Apple has been around for so long. customized the products to a target market. Not only does Apple have name recognition within the industry. As long as Jobs can maintain Apple¶s
its results of operations may be materially adversely affected by its operating costs structure. The rapid advancement of technology and business processes creates an atmosphere of high competition in which Apple must be dynamic to survive.
Many of Apple¶s products are manufactured in whole or in part by third-party manufacturers. Inc. While outsourcing arrangements may lower the fixed cost of operations.
Apple has become unable to effectively penetrate the business market.
These key strengths form a set of core competencies that Apple Computer. Apple has been able to effectively do this with the introduction of commercially strong products and services. the familiarity of the Apple software is not there. they also reduce the company¶s direct control over production and distribution. With regards to the personal computer industry.
If Apple is unable to continue to develop and sell innovative new products with attractive gross margins. Taking advantage of Apple¶s current opportunities could mean the difference between strategic success and failure.
. Apple has also been lacking in their business marketing strategies and distribution networks.competitive advantage and sustain it. can use to gain competitive advantage. increasing market share should not be too much of a problem.
Risk of obsolescence is a major concern in their industry.
A great opportunity for Apple can be found in the growing population of older individuals. then a share of the market is lost. Making use of the internet and retail outlets.Analyzing the external environment:
In the past. Apple has recently adopted Dell Computers¶ procedure of using the Internet to sell their product. The benefit of selling a product through the internet is it reaches a far wider market and reduces inventory costs. Apple can grasp this opportunity by targeting older individual with their integrated and easy to use computer system that allows for less hassle and more enjoyment. it might have been harder to locate an Apple dealer in contrast to a PC dealer. a once top of the line computer can become out-of-date.
Threats: Apple operates in a highly competitive market that is constantly making major advancements. Within two years. Apple is in direct competition with companies such as Dell
. Apple has strived to make that change. If they are unable to keep pace with these changes. Apple¶s products and services are designed for education customers and failure to increase or maintain market share in the education market may have an adverse impact on the company¶s operating results and financial condition. Computers are an important tool to help schools maximize their investment in student technology.
Although Apple has lost market share in the education market it is still an opportunity for them to gain that market share back.
they need to focus on expanding their current R&D efforts. The iPod has been a tremendous success for the company. In an industry where competition is fierce and the chance that a product may become obsolete is great. Apple can no longer cut their research and development budget. Dell has an advantage over Apple with the low prices they offer.and Gateway. but are now compatible with all software. Apple currently is the only company in the PC market whose systems do not run a
Demand for Apple¶s products has been negatively impacted by worsening global economic conditions. The company¶s success depends heavily on the ability to produce new and innovative products and technology. Another suggestion that Apple Inc. Dell has been able to gain a large share of the market by selling customized computers directly to the customer. An average Apple computer costs over $2. These two firms have captured a major share of the computer market. where as a fully loaded Dell computer can be purchased for under $1. Apple is known for developing innovative products and bringing them to the market first.
Evaluating the SWOT Analysis: Since one of the company¶s weaknesses is absence of effective research and development. Without the proper R&D these products will become out-dated and quickly become overshadowed by a competitor¶s product. partly because the hardware is compatible with all operating systems.000. should take advantage of is to better position them selves in the market. Apple still currently controls the multimedia area of computers. Some of the company¶s education customers appear to be delaying technology purchases due to concerns about the overall impact of the weaker economy on their available funding. However.500. It is important for the company to develop hardware products that bear the Apple brand name.
the company stood in opposition to staid competitors like IBM more or less by default. This would greatly reduce costs but still allow customers to experience their products. each with his own idea of what Apple should be.). as Dell has done. Ninety six percent of the market knows how to operate windows and not Mac OS X. As the company has grown and been led by a series of chief executives.com. By the time of the "1984" TV ad. and Wholesalers to distribute higher end products. They allow the customer to test and use Apple products. etc. The Macintosh would be more attractive for their customers but it could also pull potential customer over the barrier of purchasing an Apple computer. The solution to this problem would be to align with stores such as Circuit City. Analyzing corporate-level: Apple was one of several highly successful companies founded in the 1970s that bucked the traditional notions of what a corporate culture should look like in terms of organizational hierarchy (flat versus tall. Best Buy.Microsoft operating system.com and netscape. Microsoft dominates the market. Apple should improve its distribution channels by promoting internet and telephone sales. Apple distribution centers are few and far between. this trait had become a key way the company attempts differentiated itself from its competitors. Originally. The current retail stores are costly but are an asset to the company. casual versus formal attire. They make an operating to run with their systems. It is our recommendation that they adopt the Microsoft Operating Systems. but Apple still has a reputation for fostering individuality and excellence that reliably draws talented
. The ³war´ for the operating system was lost long ago. Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company. some of its original character has arguably been lost. Posting advertisements on websites such as yahoo.
Two questions emerge for those using culture as a construct for driving change:
(a) To what extent does culture. Its uses have ranged from assessing 'gaps' between an existing and future desired state of affairs to helping top management articulate strategic and structural changes for the organization. as an index of the norms. each with a different climate. Apple has undergone a lot of cultural change.
Analyzing structure and control systems:
During the change of CEO in 1997. especially after Jobs' return. To recognize the best of its employees. have the power to guide change.
. their motivation. Culture measures have been used in his leadership to change situations.people into its employ. Apple created the Apple Fellows program. and beliefs of organizational members. and yield competitive success?
(b) To what extent are there ethical issues involved in endeavors intended to change the organization's culture?
There is a significant evidence in Apple company that suggests culture is a determinant of employee attitudes. They succeeded in creating very different organizations in which the quality and quantity of the output and the employee attitudes and motivation were very different. values. This cultural change could not be handled by Steven Jobs in the beginning. Early evidence comes from research reported by Jobs in which they simulated three companies. Apple Fellows are those who have made extraordinary technical or leadership contributions to personal computing while at the company. and subsequent organizational performance.
and are affected by. Apple needs to identify ways to improve their operations to gain this competitive advantage.Relatively little has been reported that shows how the leaders of Apple organization have actively influenced culture or leveraged it to attain competitive advantage. and environment. processes. and Apple has plenty of room for improvement. the organization's culture. structure.
The business strategy literature has steadfastly maintained that for Apple company to attain and sustain a competitive advantage it must have a fit between its strategy. consistent with the environment. Since the organizational structures and processes significantly affect. they should not be satisfied with being average in this highly competitive business environment. Every company¶s main goal is to establish a competitive advantage over other firms.
Although Apple is having some success in controlling their internal operations relative to responding to their weakness. it is critical for the Apple¶s culture to be compatible with its strategy. and support its intended competitive advantage.