ORGANIZATIONAL CHANGE AND DEVELOPMENT

“THE STUDY OF ORGANIZATIONAL CHANGE AT APPLE”

PROJECT REPORT

SUBMUTTED BY:
SUMI MURUGAN P K

ROLL NO: 52

4th Trimester

SUBMITTED TO:

DR.BINDU ANTO

MBA DEPARTMENT

MES College of engineering

MALAPPURAM DT, KERALA

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 TABLE OF CONTENTS
CHAPTER TITLE PAGE NO.

1 INTRODUCTION 3

2 COMPANY PROFILE 8

3 RESERCH METHODOLOGY 10

4 FINDING, SUGGESTION &CONCLUSION 12

5 BIBLOGRAPHY 14

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 CHAPTER-1
INTRODUCTION

INTRODUCTION
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 An organizational change of innovation at the Apple Inc.
workplace began in 1997 when Steve Jobs was brought back to the company, and the change continues
until today after Jobs’ passing. After Apple ousted Steve Jobs from the company in 1985 it went into a
decline from 1989 to 1996 while looking outside the company for new software. During that time the
company’s stock price floated under $1 a share (NASDAQ, 2017). Also during that time, Steve Jobs had
founded neXT, the software that Apple would eventually buy in 1997. Since Steve Jobs returned to the
company in 1997 until his death in 2011 Apple’s stock price increased to $54 a share (Lashinsky, 2015).
Now in 2017, under new leadership that follows much of Jobs’ innovative culture, Apple’s stock price is at
$140 a share (NASDAQ, 2017). It seems like Jobs set the change successfully.

The Change Process at Apple According to Kotter’s Stages

According to Kotter’s 8 steps to incorporate change in an organization successfully (Kotter, 2012), Steve
Jobs did all stages.

First, a sense of urgency was already established from 1989 to 1996 by the incumbent leadership at Apple
during which time their company was in a decline and they were looking outside the company for new
software. Steve Jobs had also established a sense of urgency with his new company NeXT to have a release
date by the summer of 1987 because of their window of opportunity to bring something to market that no
other company was offering (Bariso, 2015). When Apple eventually bought Steve Jobs’ NeXT software and
hired him back to the company in 1997, Steve Jobs brought the same urgency. He identified the most
innovative employees and Apple came out with Microsoft Office for Mac and the Apple Online Store in the
same year, and the iMac one year later. Each new innovation thereafter came back-to-back because Jobs
infuses his employees with a similar sense of urgency.

Second, Jobs formed a powerful guiding coalition. Even before he returned to Apple, several employees
from Apple joined him when he got kicked out in 1985 and helped him found NeXT (Bariso, 2015). By
following him it showed that they trusted Jobs. Stephen Covey explains how a leader gains trust through
four principles: integrity, intentions, capabilities, and results (Covey, 2009). First, Jobs had integrity because
not only did he speak about his vision but he lived it every day. When he was kicked out of Apple he
founded a startup to continue his vision. Second, while being brusk and throwing out people’s ideas all the
time, Jobs had good intentions at heart. He wanted to innovate for students and universities who needed
affordable ways to bring a high level of study. Third, Jobs had the capabilities, knowledge, and experience
of founding Apple from its beginnings and making it successful. Last, Apple employees followed Jobs when
he was ousted because the believed that he would continue to produce results. This was clear when Apple
bought the NeXT software years later in 1997, and throughout Apple’s consequent history.

Although Jobs was hired back as an advisor to Apple, he convinced the board of directors to name him CEO
(Arlidge, 2014). Jobs found the most innovative employees and put them on top projects and into top

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positions (Katzenbach, 2012). This made him popular with the leading talent who carried Jobs’ vision to
their own teams (Dudovskiy, 2013). Jony Ives, an Apple industrial designer who Jobs promoted to Senior
Vice President of Industrial Design, described Jobs as brusque in a way essential to the strength of the
company: “Yes, he had a surgically precise opinion. Yes, it could sting. Yes, he constantly questioned. ‘Is this
good enough? Is this right?’ but he was so clever. His ideas were bold and magnificent. They could suck the
air from the room” (Arlidge, 2014).

Not only were the top performing employees that Jobs singled out highly praiseworthy of him, but Jobs’
innovative spirit infected the rest of the employees who he may have been verbally abusive to but who
viewed him as a visionary leader anyway (Broughton, 2011; Katzenbach, 2012). However, Jobs’ lack of
acknowledgment of B players may have undermined their emotional commitment and caused some of
them to leave (Katzenbach, 2012).

Third, Jobs came built-in with a vision. With NeXT he wanted to bring computing to an affordable level so
that universities and students could benefit from simulated lab environments, as the advanced lab
hardware were unaffordable (Bariso, 2015). He brought this vision to Apple and he worked with each
department to develop successful strategies for achieving his vision.

Fourth, Jobs communicated his vision continually so that his employees remained on track. He explained,
“There needs to be someone who is the keeper and reiterator of the vision … it really helps if there’s
someone there saying ‘Well we’re one step closer…. The goal definitely exists; it’s not just a mirage out
there’” (Bariso, 2015). Also, Jobs encouraged risk taking and nontraditional ideas that were far beyond the
current market offerings (Katzenbach, 2012). This is necessary for organizational change because processes
must be taken out of the routine in order to form new ones.

Fifth, Jobs removed obstacles to a new vision. Jobs identified high performers and out-of-the-box thinkers
and placed them at top positions. Jobs bought high-end lab equipment for his designers (Waugh, 2011).
Jobs’ behavior of innovation permeated the company (Dudovskiy, 2013). Throughout this time, Apple
products stayed at the top of market trends and Apple’s stock price and cash reserve increased (Lashinsky,
2015).

Sixth, Jobs systematically planned for and created short-term wins. He began a culture of starting
improvements to Apple models as soon as the last was released. He rewarded employees by working with
the most talented; the majority of employees felt satisfaction in working at a company whose innovations
continually swept the marketplace (Broughton, 2011).

Seventh, Jobs did not declare victory too soon. He consolidated improvements and produced still more
change throughout the 14 years he worked at Apple after his return and up until his death.

Eighth, Jobs institutionalized Apple’s culture of innovation by anchoring changes into the corporation’s
culture. Jobs promoted the most creative and competent. However, while Jobs’ spoke-and-wheel power
structure may have been beneficial for Apple during his tenure as he was so innovative, Apple’s future
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leadership may not be set up for the same role; they would most likely be facilitators of innovation but not
innovators themselves (Dudovskiy, 2013; Meyer, 2017). Still, Jobs knew that Tim Cook valued Apple’s
culture of innovation and would direct the company’s efforts toward long-term growth with maintaining
the culture of innovation as a top priority.

Since Jobs promoted Tim Cook to Chief Operating Officer in 2005, Apple’s stock price had gone into a
continual increase (Lashinsky, 2015). Now as CEO, Cook continues to update less popular products like the
Apple Watch because it drives sales of the iPhone; similar to how iTunes drove sales of the iPod and
ultimately the Mac (Lashinsky, 2015). Tim Cook also continues Apple’s investments in driving the next
generation of technology, and Apple continues to acquire technology companies and hire experts in
augmented realities in order to lead the future with its products. Cook also promoted Jony Ive - who
created the MacBook Pro, iMac, MacBook Air, Mac Mini, iPod, iPod Touch, iPhone, iPad, iPad Mini, Apple
Watch, and iOS - to lead Human Interface (HI) in addition to leading industrial design.

Employee Reactions to Organizational Change

Employee reactions to the change were mixed but overall positive. Jobs was a tyrannical leader who was
less than politic when dealing with people’s feelings (Katzenbach, 2012). Many of his employees began
going to therapists because of Jobs’ interpersonal abuse. However, his culture of innovation pushed
employees to their creative limits, and the verbally abused employees took pride in the company
(Broughton, 2011).

Management’s Actions to Lead the Change

Steve Jobs created a culture of innovation through a power structure that rotated around him as the sole
decision maker (Dudovskiy, 2013). This power structure under Jobs let Apple focus on every detail of their
products. Steve Jobs was a brilliant innovator and his ideology of thinking outside-the-box created a culture
of innovation in the company (Dudovskiy, 2013). The core features of Apple’s products under Jobs started
the company’s legacy of success.

The Success of Apple’s Organizational Change

The change was ultimately successful because it shows long-term results. Apple rose as a market leader
with Steve Jobs at the head and a $54 stock price (Lashinsky, 2015). With subsequent leadership, the
company continues successful product innovations in new market technologies that align to their legacy of
creating functional, appealing, and simple technology. The current stock price has been rising exponentially
and currently stands at $140 (NASDAQ, 2017).

Problems in the Change Process, and Recommendations

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 One problem in the change process may have to do with Kotter’s eighth step to
incorporating change in organizations successfully: not anchoring changes into the corporation’s culture.
This involves two things: putting the right people into the right positions and restructuring the organization
for long-term change (Kotter, 2009). Jobs did the former but it is hard to defend him for doing the latter.
Apple's organizational structure was of a power culture during Jobs' tenure which let him find highly
innovative workers but they all had to be found and make decisions through him. Jobs put the right people
in place for long-term organizational change, but the organizational structure itself was beneficial only for
him and would need to be changed by subsequent leadership.

It may not be sufficient for the long term to solidify company culture by putting the
right people in place. The structural foundation of the company itself must be solidified in a way that
enables it to perform when key people suddenly leave the organization. The power structure may work for
a highly effective innovator like Steve Jobs, but the next leaders may revert the company culture back to its
less successful years if the wrong people take the job: new leaders may be better at facilitating innovation
rather than innovating themselves.

At the same time, it is difficult to point fingers at the organizational structure

under Jobs not only because of Apple’s success during his tenure, but also beyond. Apple remains a top
competitor in the marketplace, and it is apparent that Jobs did things right for long-term change. Since Tim
Cook has taken over, Apple has come out with important innovations that customers delight in, buy, and
recommend to others. Apple’s stock price continues to increase and went from $54 at the time of Jobs’
death (Lashinsky, 2015) to $139 under Tim Cook (NASDAQ, 2017).One recommendation to predictably
ensure long-term organizational change is that Jobs should had moved the organizational structure from a
power culture revolving around himself to a task-oriented culture revolving around teams. Tim Cook had to
nudge Jobs' power culture so that all decisions did not have to go through Cook before they could move
forward (Imran, 2011; Lashinsky, 2015). But since Jobs put many of the right people into relevant positions
before his death, including Tim Cook at the head of the company and Jony Ive at the head of design, Jobs
let these people influence a structural change for Apple's long-term growth under leadership change.

Another problem in the change process may have to do with Kotter’s fourth step to
incorporating change in organizations successfully: under-communicating the vision. Jobs led through the
Telling and Supporting leadership styles, where he either gave detailed instruction or else had to oversee
all performance and make every decision. Jobs incorporated less the Involving and Delegating leadership
styles. Employees were less empowered to make decisions, and B players, who were the majority of
employees, felt less acknowledged for their contributions (Katzenbach, 2012). This may lead to a drop in
motivation that continues after leadership change. According to Greenberg (2011, p 497), a leader should
use all empowerment and delegation styles at the appropriate times, Supporting and Involving styles being
used most often. To further entrench his culture of innovation into the company for the long-term, Jobs
should have used the Involving and Delegating styles more often so that employees felt empowered
innovate without Jobs around, and more motivated.

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 CHAPTER-2
COMPANY PROFILE

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 COMPANY PROFILE

Apple was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Apple
started off selling Apple I, II, and III’s until the successful Macintosh in 1984. In 1985 Jobs was kicked out of
Apple because of disagreements in leadership. From 1985 until 1996 Jobs founded NeXT and worked on
computer software that Apple would buy in 1997. During the interim when Jobs was at NeXT, Apple did
poorly in the marketplace and was attempting to outsource for software. In 1997 Apple signed with NeXT
and let Jobs back into the company. Within the same year, Jobs was made CEO, and the success of Apple is
legendary until his death in 2011. Earlier in 2011 Jobs made Tim Cook, Apple’s former Chief Operations
Officer, the new CEO, and Apple remains successful to this day.

Currently, Apple has an online store available in 39 countries (Apple, 2017a) and 478
retail stores in 17 countries (Rossignol, 2016). Apple headquarters is in Cupertino, California (Lashinsky,
2015). All senior executives have specialized knowledge and cover the range of Apple’s products and
functions. The executives live in Cupertino and work closely with each other, leading Apple’s decision
making in a flat structure and power culture (Broughton, 2011). Before Tim Cook’s takeover, Jobs made all
decisions for the company, in a spoke-and-wheel organizational structure (Dudovskiy, 2013; Meyer, 2017).
Lower down in the hierarchy are Apple’s full time employees, mostly working in marketing and sales.
Outsourced across Asia are contract manufacturing employees (Broughton, 2011). The leadership style of
the top executives is Telling and Supporting so that they are informed of all decisions going on in the
company (Broughton, 2011; Greenberg, 2011, p 497). Managers of full time employees lower down in the
rungs tend to use more of the Involving leadership style, giving employees more freedom to make
decisions and develop their potential (Greenberg, 2011, p 497; Glassdoor, 2017).

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 CHAPTER 3
RESEARCH METHODOLOGY

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RESEARCH
Research means a search for facts- answer to questions and solutions to problem .It is a purposive
investigation. A research can be defined as a scientific and systematic search for pertinent information on
specified topic

RESEARCH METHODOLOGY
This study is done by conducting research about organizational change at apple

OBJECTIVES OF THE STUDY

 To know the organizational change at apple

SOURCE OF DATA COLLECTION

SECONDARY DATA
Secondary data will be collected from various books, journals, and internet

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 CHAPTER 4
FINDINGS, SUGGESTION AND CONCLUSION

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FINDINGS
 Employee reactions to the change were mixed but overall positive.
 With subsequent leadership, the company continues successful product innovations in new market
technologies

SUGGESTIONS
1. Pricing:
Apple delivers the best user experience, but their products are getting increasingly expensive in
emerging/developing economies. It's not possible for everyone to afford such products.
Wouldn't hurt to cut down on the pricing a little.
2. Distribution of Cash:
A number of hedge fund managers, activist investors, board members, shareholders have been
urging Apple to distribute a portion of the amount they're holding in cash (which btw, is
something around 150 billion dollars as far as I remembers). They're not very active on the
Acquisitions front, so it makes sense to distribute some of the cash reserves.
3. International Warranty:
Their "International Warranty" should be applicable everywhere. Instead, if you look at the
Indian market, if I buy an iPhone from say, Singapore, I cannot send it for repair in the Indian
office.
Not sure if this is the case in some other countries too, or just India specific.
4. Enter different markets:
Wireless headphones, maybe? When is the Apple TV going to be a reality? Rumours have been
going on forever! And once again, the price shouldn't be berserk.
With the experience and expertise they have in their industry, they shouldn't limit themselves to
certain products.

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 CONCLUSION

Thus Apple.inc has developed rich organisation change which is nothing

but the set of assumptions, beliefs, values and norms that are shared by organisations members. Apple can
keep on fuelling innovations by urging representative's to go out on lot of representatives and consider
unheard of options, by encouraging a more adhocracy style culture and change. Thus organisation change
is the main reason for its success. Apple can keep on offering their advantages bundle, ingrain trust in their
workers to utilize those advantages, and make the projects offered inside the bundle all the more broadly
accessible for people in general. Apple is world renowned company acts as a model for other companies. It
plays a vital role in employee development schemes and in promoting company culture. It created benefit
packages for many full time employees for the satisfaction of employees.

BIBLOGRAPHY
 https://sites.google.com/view/tycontent/topics/business-strategy/apple-inc-motivation-and-
organizational-change
 https://en.wikipedia.org/wiki/Apple_Inc.
 https://www.cram.com/essay/Apple-Inc-Organization-Culture-and-Change/P3CLFE6KXJ

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